For over two decades Amazon has given consumers the ability to purchase everything they need at the lowest price and have it shipped to their doorstep. At the same time consumers aren’t the only beneficiaries of the e-commerce giant, sellers across the world have been able to take advantage of Amazon’s infrastructure as well their fulfillment centers to create their own empire. I had the unique fortune to speak with Mark Mitchke, VP of Fulfillment by Amazon to get first hand details on how FBA works. Here’s what we discussed:
Jay: Before we get into Fulfillment by Amazon, let’s first talk about why the businesses that sell on Amazon are so important to Amazon and its customers?
Mark: As you may have seen in our 2015 shareholder letter, Jeff Bezos refers to Amazon Marketplace as one of the three pillars of the Amazon business. Sellers on Amazon, many of which are small businesses, are important for many reasons, but most importantly because they bring a vast and unique selection of products to Amazon customers around the world. These businesses represent nearly 50 percent of total units sold on Amazon and provide hundreds of millions of items that Amazon customers search for and purchase every day.
Jay: How does Amazon help these sellers and small businesses grow their business?
Mark: Amazon provides sellers and small businesses with instant access to a global customer base by opening up our virtual shelf space and letting these businesses sell right next to us on our detail pages. We are focused on helping small businesses succeed by inventing on their behalf and making our technology available to them through unique seller services, including Fulfillment by Amazon (FBA), Amazon Payments and Sponsored Products.
Jay: What is Fulfillment by Amazon and how does it work?
Mark: Fulfillment by Amazon (FBA) is a service that allows small businesses and sellers on Amazon to store products in Amazon’s fulfillment centers so that Amazon can pack, ship and provide customer service for products they sell. Essentially, it allows them to outsource their logistics network and customer service to us, allowing them to spend more time focusing on growing their business.
Jay: Heading an operation that impacts both customers and sellers is a tremendous undertaking, and the responsibility to bring value to both sides of a sale must be a tremendous challenge. What’s that like?
Mark: Fulfillment by Amazon (FBA) pretty brings value to both customers and sellers. When customers buy something on Amazon they expect a certain experience – fast delivery, quick and easy returns and helpful customer service. FBA helps ensure that customers get this same experience whether they buy directly from Amazon or from a business selling on Amazon. Sellers and small businesses selling on Amazon don’t have to worry about managing returns, stocking inventory or handling customer support. By being part of FBA, they can ensure that their customers will have a worry free experience, while freeing up their own time to focus on their business. It’s really a win-win.
Jay: Definitely a system with tremendous value for the sellers and the consumers without a doubt. What’s it like on your end? What type of volume do you handle on a daily basis?
Mark: To give you a few number, in 2015 FBA delivered more than 1 billion products to customers worldwide, and active sellers using FBA grew by more than 50 percent compared to the previous year. We are constantly innovating to ensure that both sellers and customers have the absolute best experience, which will encourage more people to use Amazon for their buying and selling needs.
Jay: Those numbers are shocking and extremely impressive. However, if I’m a small business owner and want to start selling on Amazon I’d be concerned by the fact that there are so many sellers already. How can I make myself stand out?
Mark: Great point, Jay. On the seller side, we often talk about product uniqueness. Take a look at one small business seller we’re particularly proud of – Cielo Pill holders. They created a pill holder that you can wear as a necklace or key chain that keeps the pills you need at your side wherever you go. They’re waterproof, stylish and most of all discreet. The product was developed by an entrepreneur here in Seattle that uses the Amazon Exclusives program and FBA to help scale and grow her business. She found a need and created a unique product that has helped millions of people. The beauty of Fulfilled by Amazon is that is works for both small and large sellers.
Jay: I am an avid Amazon user so I certainly know from experience how Amazon has helped consumers, but hearing how Amazon has helped so many small businesses grow is amazing. What have you seen that has enabled Amazon to reach such success and what do you see coming down the road?
Mark: First off, thanks for being an Amazon customer – we appreciate it! Jeff Bezos often and famously says “it’s still day one” when talking about Amazon. It’s an incredible mindset, and when combined with our commitment to always start with the customer, it makes Amazon a really exciting place to work. The world is changing at a rapid pace and it’s our responsibility to continue to innovate on behalf of both of our customers – sellers and consumers – to deliver the best possible experience.