Providing customers with fast, low-cost, reliable delivery has been a core part of Amazon’s value proposition for over 20 years. We’ve invested $100 billion in our fulfillment and delivery network to support that value, and in 2006, we opened the network to independent sellers by creating Fulfillment by Amazon (FBA). This program lets sellers outsource their fulfillment, delivery, customer service, and returns to Amazon. It also lowers their operational costs and provides sellers with more time to focus on inventing amazing products and driving business growth. Today, FBA continues to provide incredible value to sellers and customers.
How Amazon’s fulfillment network provides fast, low-cost, and reliable delivery
Amazon’s network now includes hundreds of fulfillment centers worldwide, each often employing more than 1,000 full-time associates. We also have developed cutting-edge fulfillment automation and robotics, advanced supply chain optimization capabilities, and sophisticated forecasting and placement algorithms that get billions of products closer to customers.
Our ongoing investment in infrastructure and technology is what allows Amazon to deliver the products customers want—reliably and at faster speeds than many alternatives. Today, the Amazon fulfillment network delivers hundreds of millions of items to customers in two days, and it delivers tens of millions of the most popular items in one day or less. Our network also reduces the overall cost of fulfilling an order, which drives down prices and lowers shipping fees for customers.
We’ve built our network and improved delivery speeds for customers while working towards sustainable solutions. We’ve committed to bring 100,000 Rivian electric delivery vehicles to the road all around the world by 2030 and are on a path to power our operations with 100% renewable energy by 2025—five years ahead of our original goal. To date, 90% of electricity consumed by Amazon was attributable to renewable energy sources.
We’re proud that Amazon is at the forefront of fulfillment and delivery. We plan to continue making investments and developing technologies that benefit Amazon customers.
Why we opened our network to independent sellers
Fulfillment by Amazon (FBA) is a program through which we offer the benefits of our infrastructure to small and medium-sized businesses that sell in our store. After choosing FBA, sellers can send their products into our fulfillment network. We take care of distributing those products to the most optimal fulfillment centers across our network using our regional forecasting and placement algorithms. When a customer places an order, we use a combination of technology and expertise to pick items from the fulfillment center, pack them for transport, and deliver them to customers. We also leverage our customer service and reverse logistics capabilities to support those FBA products if customers need help with an FBA item or want to return it.
By creating FBA and opening our logistics network to independent sellers, we’ve been able to deliver even more products to customers at faster speeds. This increased selection is great for customers, who now have more products to choose from and more opportunities to discover and support small businesses. FBA also has made fulfillment easier, faster, and less expensive for many independent sellers, who can use the infrastructure and innovation built into the program to outsource their operations, lower costs, and spend more time inventing new products and driving business growth.
Why independent sellers choose FBA
Independent sellers have many options when it comes to how they ship their products. They can send packages to customers directly or choose from a variety of fulfillment providers. Many independent sellers who choose FBA do so for four main reasons: 1) FBA provides a service that is often significantly faster, more reliable, and less expensive than alternatives, 2) FBA makes it easier to operate a product-based business by outsourcing these tasks to Amazon so that small businesses can spend more time inventing amazing products and delighting customers, 3) the speed and reliability of Amazon’s fulfillment can increase sales, and 4) it allows independent sellers to continue to benefit from Amazon’s innovation.
Cost
FBA is a great value for independent sellers. Shipping with FBA costs 30% less per unit than standard shipping options offered by major U.S. carriers and 70% less per unit than premium options comparable to FBA. By investing in infrastructure, we’re able to place products closer to more customers, which means shorter distances and lower costs for delivery. By innovating continuously, we’re able to offer highly automated processes, which means fewer manual touchpoints and fewer costly mistakes. Our lower costs help alleviate a significant operational burden encountered by many small and medium-sized businesses and provide independent sellers with opportunities to invest in other areas that help them grow.
“I was sending sauce all over the country, and I thought, why can't we use Amazon as a way to get in touch with our customers? We started looking into packaging, and we realized shipping is expensive. FBA makes it so easy because we pack up the sauce [in bulk] and we just [send it to Amazon]. Anyone can do it.” —Nadia Liu Spellman, founder and CEO, Dumpling Daughter
Ease
Not only is FBA cheaper, it makes it much easier for independent sellers to operate and grow their businesses. Choosing to use FBA means sellers don’t have to spend time processing orders, handling customer inquiries, or managing returns for the products they’ve enrolled in the program. Sellers can spend more time focused on inventing products and driving customer delight, and less time dealing with complex logistics, warehousing, fulfillment, customer service, or other operationally time-consuming aspects of running a business. Using the infrastructure, technology, and expertise of FBA also enables sellers to avoid having to make costly upfront investments in warehousing, and it helps them expand their sales into new countries without having to become experts in international logistics. This all saves them time, effort, and money. Many sellers also take advantage of specialty fulfillment programs like FBA Subscribe & Save to secure repeat sales in the Amazon store. Or they use FBA’s Multi-Channel Fulfillment to use Amazon’s fulfillment network to service customer orders they receive from their other sales channels, including their own websites and social media channels.
“I think FBA allows us to really focus on growth … and merchandising the product so that it's approachable to the customer, and we can really tell the brand story, instead of spending all of our time shipping product across the country.” —Madeline Dillashaw, senior global manager, Fellow
Sales
Our fulfillment network allows us to deliver a fast and reliable service that has earned the trust of customers. On average, products that appear in the Amazon store with 2-day delivery have a meaningfully higher conversion rate than products that appear with slower delivery speeds. Customers also appreciate that when they buy from an independent seller who uses FBA, they can get tracking updates, delivery photos, and hassle-free returns. Choosing FBA to deliver products quickly and reliably can help sellers delight customers, which can make it easier to increase sales and grow their businesses.
“We started fulfilling through FBA, and that's when our sales quadrupled. FBA enables us to focus on product development, customer service, and sales, and other channels.” —Rob Gilfeather, founder and CEO, Fuel for Fire
Innovation
Amazon continues to drive innovation in the world of fulfillment on behalf of customers and sellers. We’re investing billions of dollars to improve the capabilities we offer independent sellers through FBA. We build new technologies to further enhance product distribution, delivery speed, and accuracy, and we continue to create and refine specialty programs that help sellers take full advantage of FBA across all their sales channels. Independent sellers now can offer Amazon’s checkout experience and Prime delivery promise from their own websites through Buy with Prime, which allows them to benefit from our infrastructure and technology while they build their own direct-to-consumer websites.
Beyond FBA
We’re also developing new tools and programs to support independent sellers who choose to fulfill customer orders themselves. Through our Buy Shipping service, we help sellers connect with other fulfillment providers and obtain discounted shipping rates that we have pre-negotiated for them. We also offer access to a wide variety of third-party fulfillment apps that can help sellers automate and optimize fulfillment operations.
We recognize that independent sellers have many options when it comes to fulfillment. Our goal is to provide sellers with a broad set of fulfillment options so they can choose what works best for their businesses. That’s why we continue to enhance and integrate the various parts of our global fulfillment network, providing a wider selection of products at faster speeds to more parts of the globe. It’s also why we’ll continue to find new ways to support independent businesses as they sell across various channels, offering new options that support their needs and give them the opportunity to reach more customers.
