Blog 002 – What is FBA?

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So today I stumbled upon a stat that I wanted to share with everyone. As of the second fiscal quarter of 2016, Amazon posted its profits at $857 million with a revenue of $30.1 billion! That's crazy. This number has only grown since that quarter with year over year profit up 832 percent.

"Cool stat bro...so where you going with this?". Where I am going with this is that Amazon is taking over the world!!! At least that's what it seems like, especially with them now getting into the grocery business with their acquisition of Health Foods. We may soon have drones dropping groceries off at the front door...hmm.

Amazon had posted some interesting statistics I wanted to share with you before we dive into what is FBA. I feel these stats will help solidify why we are going to kick ass selling through Amazon!  As of the beginning of the year (2017) there are over 300 million Amazon.com users. 30 million average monthly mobile app users and 44% of web shoppers are going directly to Amazon for product searching.

"30 million average monthly mobile app users and 44% of web shoppers are going directly to Amazon for product searching."

These stats summed up mean that people are buying a shit load of their items through Amazon. I know I do. Maybe its a subconscious thing but whenever I want something I go to Amazon first to check it out and read reviews. If I am at the store and see something that looks like its priced to high, I go to Amazon and get it cheaper.

I imagine others do the same thing. We are all glued to our phones constantly anyways. Its just easy to quickly sift through the app and find what we are looking for. Enough rambling from me lets jump into the question of what is FBA. You Ready?

FBA is the acronym for Fulfilled by Amazon. In its simplest definition its products that are sold by you and I and then packed up and sent to the customer through Amazon. Meaning Amazon does all of the heavy lifting and handles getting it to the customer. Think of it as being laissez-faire (hands off for those who slept through government class). *slowly raises hand.

Let's dive a little deeper. We will be ordering a product from a supplier overseas called Alibaba (think of it as the Chinese Amazon with everything being wholesale). They are huge and absolute Goliath's in the e-commerce world. Why order from them? They are able to produce bulk quantities of almost any item you can think of for extremely cheap prices aka wholesale.

Most of the items that you see around your house have I high probability of being made in China. (Go ahead and look for that little Made in China sticker...i'll wait). The reason for this is simple. They are able to manufacture items of large quantity for cheaper then what we can make it in the United States. Plus they have thousands of factories to get it done.

Once we select a product which is typically the trickiest part of this whole Amazon adventure the journey gets a lot smoother. We will create a listing on Amazon and make it look visually satisfying. Then we'll ship our small/medium/large order of products we selected to Amazon. (Don't worry i'll be breaking all of this down individually in the coming blogs) .

Once Amazon receives our product that we shipped to one of their warehouses throughout the United States we will get a notification that are listing can now be activated to start selling. Now the fun part!

Once somebody goes to your Amazon listing and adds the product to the cart and buys it, Amazon takes care of everything "everything you say?". Take a look at the picture below. Pretty dizzifying how big those warehouses are huh? (Is that a real word?)

Image result for amazon fba

Amazon has their employees pick our product from the shelf, places it in the Amazon box, packs it up, and gets it ready to be shipped out to the customer. They even handle the customer service to help manage customer inquires, refunds, and returns for all of your orders 24-7 (there's that laissez-faire again).

At this point its simply rinse and repeat. Fall asleep watching a boring baseball game on TV? Doesn't matter sales are still rolling in. Realize you forgot to pickup your kid at soccer practice? Doesn't matter sales are rolling in. Want to go to bed at 8pm cause you had a long day? Doesn't matter...well you get the point.

In a nut shell and from a 3000 foot overview that's what we will be working with. I am going to break down everything step by step on the direction and path we need to follow so we can work together to achieve that financial freedom!

As I mentioned, the trickiest part about this whole adventure is selecting the right product and once that is done we simply order more once the stock gets low. Selecting the product will be a major component and foundation of this blog and I will make sure it is all laid out for us.

Stay tuned for the next blog and we'll jump into getting a Amazon Seller Account setup. I will make sure to lay this out step by step. Thank you again for joining the journey!

Warm Regards,

Cody

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