Amazon’s Fulfillment by Amazon (FBA) program has revolutionized the way entrepreneurs launch and grow e-commerce businesses. With over 300 million active customers, Amazon provides sellers with a vast marketplace and the infrastructure to handle storage, shipping, and customer service. The Amazon store serves as the primary platform for small and medium-sized businesses to reach customers, fulfill orders, and grow their online business. But starting an FBA business—and scaling it successfully—requires more than just listing products.
This comprehensive guide is designed to walk new and growing Amazon sellers through every step of the FBA journey, from setup to scale. Whether you’re starting from scratch or looking to grow your existing Amazon business, this guide is your playbook.
Amazon FBA, or Fulfillment by Amazon, is a powerful service that enables sellers to streamline the way they sell products online. With Amazon FBA, sellers can store their inventory in Amazon’s warehouses, allowing Amazon to take care of the entire fulfillment process—from picking and packing to shipping and customer service. This means that when a customer places an order, Amazon handles the logistics, ensuring fast and reliable delivery.
By leveraging Fulfillment by Amazon, sellers can focus on growing their business and increasing sales, rather than getting bogged down by the complexities of order fulfillment. The FBA service is designed to help sellers of all sizes—whether you’re just starting out or looking to scale—by providing access to Amazon’s world-class fulfillment network and customer service. This not only simplifies the selling process but also helps sellers build a reputation for reliability and efficiency, which is crucial for long-term success in e-commerce.
In short, Amazon FBA allows sellers to sell products more efficiently, reach more customers, and take advantage of Amazon’s expertise in fulfillment and customer care, making it an essential tool for anyone looking to build a successful online business.
Many sellers choose Amazon FBA as their preferred fulfillment method because it offers a range of advantages that can help boost sales and streamline operations. One of the biggest draws is the ability to offer Prime shipping, which is highly attractive to customers and can significantly increase conversion rates. By using Amazon FBA, sellers can tap into Amazon’s extensive fulfillment network, which includes numerous fulfillment centers strategically located to ensure fast and reliable shipping to customers across the globe.
This access to Amazon’s fulfillment centers means that sellers can get their products to customers quickly, leading to more positive reviews and higher customer satisfaction. For small businesses and individual sellers, FBA is especially valuable because Amazon takes care of customer service, handling inquiries, returns, and any issues that may arise. This allows sellers to focus on growing their business and developing new products, rather than spending time on logistics and support.
Another key benefit is the ability to avoid long-term storage fees by managing inventory levels efficiently within Amazon’s system. The cost savings, combined with the convenience of having Amazon handle fulfillment and customer service, make FBA a cost-effective solution for many sellers. Overall, the combination of Prime shipping, access to a global fulfillment network, and the ability to scale without the burden of logistics is why so many sellers choose Amazon FBA to sell products and grow their business.
Fulfillment by Amazon (FBA) is a service where Amazon stores your products in their fulfillment centers, handles packaging and shipping, and takes care of customer service and returns. You focus on sourcing and selling; Amazon handles the rest. Amazon FBA work for the third-party seller involves sending your products to Amazon, which then manages storage, packing, and shipping, allowing sellers to focus on growing their business.
Sellers using FBA are generally more likely to win the Buy Box on Amazon. FBA offers several advantages that Amazon’s algorithm favors, including Prime eligibility and faster shipping times, both of which significantly increase a seller’s chances of being selected for the Buy Box. FBA work streamlines the selling process by having Amazon handle logistics, so sellers can focus on sourcing and selling.
The FBA process is relatively straightforward but incredibly efficient:
This streamlined system frees up your time and allows you to focus on sourcing, branding, and marketing.
A major reason for FBA’s success is the seamless experience it offers to customers. Most shoppers aren’t even aware that the products they’re buying often come from third-party sellers, not Amazon itself. But from the seller’s perspective, just how simple is it to start with FBA? In a word: very.
If you’re already selling on Amazon, you can enable FBA directly from your existing account. For new sellers, the process begins by signing up for a Professional selling plan. (Individual sellers can also use FBA, but they won’t have access to advanced features like advertising or bulk listing tools.)
Here’s how to get started:
Once your inventory arrives at the FBA warehouse, your listings go live for purchase. From there, Amazon takes over: handling order fulfillment, customer service, and returns. Sellers are paid bi-weekly, with Amazon automatically deducting applicable FBA fees. It's important to understand FBA cost, including storage and fulfillment fees, so you can accurately calculate the total price and assess your profitability.
If you’re currently fulfilling customer orders yourself (Fulfilled by Merchant), switching to FBA is easy. Just go to the Manage Orders page in Seller Central, click on the Actions drop-down menu, and select "Change to Fulfilled by Amazon."
With just a few adjustments and some initial setup, you can tap into Amazon’s powerful fulfillment network and deliver a Prime-quality shopping experience—without the overhead.
Here is a step-by-step guide on how to get started on Amazon FBA from account setup to product research, sourcing, and shipping. Choosing to sell with Amazon gives you access to a trusted platform, dedicated support, and powerful tools that help you grow your business.
Go to Seller Central and sign up. You’ll choose between:
During account setup, you must provide accurate tax information to configure your seller profile and comply with legal requirements.
Research products with high demand and low competition. Successful sellers focus on products that generate consistent purchases and sales, maximizing their revenue potential.
Use tools like Amazon's Product Opportunity Explorer or SmartScout to evaluate product opportunities. Key criteria:
Options include:
After receiving your products:
Generally speaking, most FBA sellers can achieve profitability if they manage costs and follow best practices. In fact, around 76% of FBA sellers report turning a profit, with many achieving success within their first year. What makes the FBA fulfillment method so attractive is its ability to simplify many of the complexities involved in order fulfillment—Amazon takes care of storage, packing, shipping, and customer service.
Pro Tip: Analyze your true profit by SKU, with your cost of goods automatically imported from QuickBooks or Xero.
Amazon FBA fees cover a variety of fulfillment costs, including order fulfillment, inventory storage, and special surcharges for aged or improperly managed inventory. In addition to these, sellers also pay a referral fee for each item sold on Amazon.
Below is a breakdown of the most common FBA-related fees you may encounter:
A per-unit charge applied when Amazon picks, packs, and ships your order. Rates vary depending on the product’s category, size tier, and weight.
Always refer to the latest U.S. FBA Fulfillment Fee Schedule for the most up-to-date rates and tier structures.
A monthly charge based on the average daily volume (in cubic feet) your inventory occupies in Amazon’s fulfillment centers. The base fee depends on:
Additional charges may include:
Applies to standard-size products that consistently maintain less than 28 days of inventory based on both short-term (30 days) and long-term (90 days) supply metrics. This fee is calculated at the parent ASIN level.
Formerly known as the long-term storage fee, this monthly surcharge is assessed on the 15th of each month for inventory stored 181 days or longer. Exceptions apply to certain categories like apparel, shoes, bags, jewelry, and watches in the U.S.
Charged for items with higher-than-average return rates, excluding shoes and apparel. The fee is calculated based on the item’s size tier and shipping weight.
Incurred when you request that Amazon removes or disposes of your inventory from fulfillment centers. Fees are charged per unit.
Introduced in 2024, this fee applies when Amazon splits your shipment to route inventory to multiple fulfillment centers. The Amazon placement fee is calculated based on:
Products priced under $10 automatically qualify for discounted FBA fulfillment rates, which are $0.77 less than standard rates.
Charged when your inbound shipment:
Amazon may refuse, reroute, or reprocess your inventory, and the fee covers the additional cost.
Certain product categories are subject to special fee structures. For example:
Tip: Use Amazon’s FBA Revenue Calculator or more advanced tools like ConnectBooks to estimate your true costs and ensure your profit margins stay healthy.
To run a sustainable and profitable FBA business, it’s crucial to stay compliant with Amazon’s policies. Following these policies not only protects your account but also helps attract customers by building trust and ensuring a high-quality buying experience. Violations—whether intentional or accidental—can result in account suspensions, listing removals, or permanent bans.
Amazon requires that all products meet local laws and safety regulations. Key requirements include:
Before sourcing a product, consult Amazon’s Restricted Products List and check for category-specific requirements.
You must:
Manipulating listings or keywords (e.g., stuffing unrelated terms or creating duplicate listings) can lead to suspension.
Amazon controls most of the customer relationship, but you’re allowed limited contact under strict rules:
Use tools like Amazon’s Buyer-Seller Messaging Service or automated feedback tools like FeedbackWhiz, ensuring they comply with Amazon’s Communication Guidelines.
When shipping to Amazon fulfillment centers:
Violations may result in inventory being rejected or disposed of at your cost.
Amazon has zero tolerance for manipulating reviews. Do NOT:
Amazon uses AI and human review to detect violations, and penalties can be severe.
Maintain strong seller metrics to stay in good standing:
Even for FBA sellers, customer complaints, returns, and negative reviews affect account health.
Amazon regularly updates its policies. Sellers should:
Proactive compliance protects your business and ensures long-term growth on the platform.
Running out of stock kills momentum and sales. Overstocking, on the other hand, inflates your storage costs. Effective inventory management is key.
No matter how great your product is, you need visibility. Amazon is a search engine—and mastering it is essential.
Optimize your listing with relevant, high-volume keywords:
Use keyword research tools like Helium 10’s Cerebro or Jungle Scout’s Keyword Scout.
Amazon PPC helps you appear at the top of search results. Start with:
Test, analyze, and optimize over time to reduce ACoS (Advertising Cost of Sales).
Driving traffic from outside Amazon boosts sales and organic rank.
Use Amazon Attribution to track external traffic performance.
Mastering FBA involves more than just choosing a winning product—it requires strategic planning, marketing savvy, and continuous improvement. Once your business gains traction, it’s time to scale. Growth depends on systems, automation, and strategic expansion.
As you grow your FBA business and begin building a recognizable brand, protecting your intellectual property and enhancing your presence on Amazon becomes increasingly important. That’s where the Amazon Brand Registry program comes in. It’s not just about protection—it’s about brand-building power. If you plan to scale your Amazon business long-term, enrolling in Brand Registry is a must.
Many FBA sellers make the same costly mistakes. Here’s how to avoid them:
Building a successful Amazon FBA business is completely achievable—with the right mindset, tools, and strategies. Start with research, commit to providing value, and keep reinvesting in your growth. While competition is rising, the opportunity is still immense for those willing to research, test, and optimize.
Remember: FBA isn’t a “get rich quick” scheme. It’s a powerful platform that rewards consistency, optimization, and customer focus. If you treat it like a real business, the rewards can be significant.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
Ready to level up? Start making smarter, data-driven decisions every step of the way. Try ConnectBooks Free Today or Schedule a Demo
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