📦 What is Amazon FBA?

Amazon FBA stands for Fulfilment by Amazon. In simple terms, you send your products to Amazon’s warehouse and they handle everything else — storage, packing, shipping to the customer, and even customer service and returns.

How Does It Work?

1. You find a product to sell (more on this in the Sourcing Models guide)
2. You buy that product at a lower price than it sells for on Amazon
3. You send it to Amazon’s warehouse (either yourself or via a prep centre)
4. Amazon stores it, and when a customer orders it, they pick, pack, and ship it
5. You get paid — Amazon deposits the sale price minus their fees into your bank account

That’s it. You’re essentially a middleman, but Amazon does the heavy lifting of fulfilment.

Why Use FBA Instead of Selling Yourself?

• Prime badge — your products get the Prime delivery badge, which massively increases sales. Customers trust Prime and filter for it
• Amazon handles customer service — returns, refunds, complaints, all handled by Amazon
• Scalability — you’re not packing boxes in your bedroom at midnight. Amazon’s warehouses can handle 10 orders or 10,000
• Buy Box advantage — FBA sellers are far more likely to win the Buy Box (the main “Add to Basket” button), which is where 80%+ of sales happen

What Are the Fees?

Amazon charges two main types of fees:

Important: Always calculate your fees BEFORE buying stock. The Amazon Revenue Calculator (free tool) lets you plug in an ASIN and see the exact fee breakdown. If you don’t do this, you’ll buy stock that looks profitable but actually loses money after fees.

FBA vs FBM

You’ll also see FBM — Fulfilment by Merchant. This means YOU ship the product directly to the customer. Some sellers use FBM for oversized items where FBA fees would eat the profit, or when they want more control. But for beginners, FBA is the way to go — the Prime badge alone is worth it.

How Much Money Do You Need to Start?

There’s no single answer, but here’s a realistic breakdown:

• Amazon Seller Account: £25/month (Professional plan — worth it from day one)
• Initial Stock: £200-500 is a solid starting budget for OA/RA
• Tools: £15-50/month for scanning/research tools (optional but recommended)

You can start smaller, but having at least £300-500 for stock gives you enough room to diversify and not rely on a single product.

UK vs US Amazon

This guide focuses on Amazon UK (amazon.co.uk) since that’s where most of our community sells. The principles are the same for Amazon US, but fees, categories, and ungating requirements differ. Start with your home marketplace before expanding internationally.

Key Terms You’ll See

• ASIN — Amazon Standard Identification Number. Every product on Amazon has one
• Buy Box — the main “Add to Basket” button. Multiple sellers compete for it
• ROI — Return on Investment. If you buy for £10 and sell for £20 (after fees), your ROI is 100%
• BSR — Best Sellers Rank. Lower number = sells faster. A product ranked #5,000 in a category sells much more frequently than one ranked #500,000
• FNSKU — the barcode Amazon uses to identify YOUR specific unit in their warehouse
• Prep — preparing your products to meet Amazon’s packaging requirements before sending them in