Fulfillment by Amazon (Amazon FBA) is an e-commerce service in which third-party vendors store their products in Amazon’s fulfillment centers and the e-commerce giant picks, sorts, packs, ships, tracks and handles returns and refunds for these products. In addition to accounting for a huge portion of Amazon’s revenue, FBA enables Amazon to offer other vendors’ products alongside its own.

FBA gives smaller vendors access to Amazon’s web-to-warehouse picking and sorting system and other logistics services, freeing the vendor to focus more on other aspects of their business. Amazon charges merchants for storage space and a fee for orders it fulfills. Shipping costs and 24/7 customer service are included in vendor fees.

How Fulfillment by Amazon (FBA) works

To sign up for FBA, merchants in the United States, Canada and Mexico need a Selling on Amazon account. Merchants can add products to the Amazon catalog one at a time, in bulk or by integrating their inventory management software with Amazon, using Amazon’s application program interface (API). Listings on the Amazon website are shown with the Amazon Prime logo. There is no additional charge for Amazon Prime free two-day shipping, and there is free shipping on eligible orders. FBA can also be integrated into vendors’ websites so that customers can do their shopping through Amazon without leaving the third-party’s website.

Amazon advises merchants that use its e-commerce service to ensure their products are “e-commerce-ready” so they can be safely and securely transported to customers. Amazon makes polybags, boxes, stretch wrap, bubble pack and other shipping materials easily available to Selling on Amazon vendors. Some fees for Selling on Amazon and optional services may be applicable.