What is Amazon FBA?

Amazon FBA
Amazon FBA is an abbreviation for Amazon Fulfillment By Amazon. Beneath this unassuming acronym lies a powerful machine under the Amazon brand, the heart of which is a network of warehouses spread across the globe. It is from these warehouses that shipments are made of both Amazon products and those of sellers. However, FBA is not just about warehouses – it is also a sales model that allows your products to be delivered within 24 hours to millions of customers worldwide, as well as a cutting-edge logistics technology. This solution has revolutionised e-commerce and is available to every Amazon seller.

Amazon FBA Warehouses
You have surely seen one of the enormous Amazon warehouses located in the suburbs of some Polish or European city. In Poland, Amazon FBA warehouses are located in Wrocław (2 warehouses), Poznań, Kołbaskowo, and centres are currently being built in Gliwice and most likely in Okmiany in Lower Silesia.

FBA warehouses are vast – the centres in Wrocław alone have a total area of 95 thousand m². Under their roofs, products for Amazon customers as well as your customers are stored and packaged.

Products can belong to Amazon or to sellers who entrust their goods to FBA for processing. The location of the warehouses arises from geographic accessibility and logistics costs – ensuring that shipments can be made within 48 hours, 24 hours, or even on a same-day basis.

The warehouses are divided into bulk and oversized/pallet-sized. Some also have special functions, such as Print on demand Cell (print-on-demand book services) or clothing personalization.

How do FBA warehouses operate?
FBA warehouses perform typical logistics centre functions: receiving products, storing, order picking, packaging, and shipping.

The seller chooses the FBA option, prepares the products, and ships them to the warehouse according to the shipping plan (Shipping Plan in Amazon Seller Central).

Upon receiving the products, Amazon may distribute the goods across various warehouses – in the FBA or PAN FBA model – the decision is made by Amazon.

When an order comes in, the warehouse picks, packs, and sends the product to the customer. Returns also go to FBA. Furthermore, customer service in a given language is conducted by Amazon employees, while the seller is only involved if Amazon cannot answer a buyer's question.

What are the costs of FBA?
The costs associated with FBA depend on the size, specifics, and storage time of the products. They mainly consist of:

1. Product dimensions – that is, the volume occupied in the warehouse (billed monthly).

2. Shipping costs – depending on the weight, dimensions, and type of packaging.

3. Special requirements – e.g., additional packaging or special storage.

FBA or not FBA – that is the question?
Advantages of FBA:

• Access to Prime customers = increased sales.

• No need for your own warehouse, equipment, and staff.

• Return handling by Amazon – without the need for a local address.

• Customer service in the language of the sales market.

• Negative reviews related to shipping and service are automatically removed by Amazon.

Challenges of FBA:

• The need to register and pay VAT in the country where the goods are stored.

• Unit costs may be higher than in the FBM model (depending on the product).

• The need for good inventory management – storage over 6 months incurs significant additional fees.

Do you still have doubts about whether FBA is right for you? Get in touch with us or let us know in the comments or in our Facebook group. We will respond and help – perhaps this knowledge will be useful to someone else. Join the Go2Market Community.

Best regards,
Go2Market Crew