What Is An Amazon Fulfillment Center?

Virginia Miller

May 25, 2024

In this article

You've probably heard of Amazon fulfillment centers if you're in the eCommerce business. But what are they exactly, and how do they work?

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What Are Amazon Fulfillment Centers and How Do They Work?

Amazon fulfillment centers are large warehouses where Amazon stores inventory for their ecommerce business. When an order is placed on Amazon, products are picked from the fulfillment center shelves and shipped to the customer. These facilities enable Amazon to store products until they are purchased and provide quick delivery times.

Key Features of Amazon Fulfillment Centers

Amazon operates over 175 fulfillment centers globally that are designed for efficiency. Here are some of their key features:

Receive and store inventory from third-party Marketplace sellers
Fulfill orders placed by customers on Amazon.com
Use advanced technology and workflows to rapidly pick, pack and ship orders
Strategically located near major transportation hubs and population centers

Benefits of Using Amazon Fulfillment Centers

Storing inventory in Amazon fulfillment centers and using their logistics network provides several advantages:

Fast Shipping: Products are closer to end customers, enabling quick delivery
Reduced Costs: Amazon's scale means lower storage, labor and shipping expenses
Expanded Reach: Sell to millions of Amazon customers across the world
Better Customer Service: Amazon handles returns and provides customer support

Cost Considerations

While using Fulfillment by Amazon (FBA) can reduce overall costs, there are fees to consider:

Monthly inventory storage fees
Fees for picking and packing orders
Outbound shipping costs to customers
Other variable fees based on product size, weight, etc.

Understanding all the costs allows you to accurately determine the profitability of selling on Amazon.

Tips for Choosing a Fulfillment Provider

When evaluating fulfillment solutions, consider these key factors:

Location relative to your suppliers and end markets
Breadth of services offered
Storage capacity and scalability
Experience, capabilities and technology
Cost competitiveness
Reliability and accuracy

Choosing the right fulfillment partner allows you to cost-effectively scale your ecommerce business.

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FAQs

What are Amazon fulfillment centers?

Amazon fulfillment centers are giant warehouses that store millions of products. They serve as the foundation of Amazon's logistics network, optimized for efficiency and speed.

What happens after an order is placed?

After a customer order is received, workers pick the purchased items from fulfillment center shelves. The order is packed, sealed, and shipped via Amazon's large network of shipping partners.

How many fulfillment centers does Amazon have?

As of 2022, Amazon has over 450 active fulfillment and sortation centers globally. These facilities have a total storage footprint exceeding 150 million square feet.

Why are fulfillment centers important for Amazon?

By handling inventory storage, order processing and shipping themselves, Amazon can deliver products faster and more cost-effectively. This enables competitive pricing and convenience.

What are the benefits of Fulfillment by Amazon (FBA)?

FBA allows third-party sellers to store products in Amazon fulfillment centers. Key benefits include fast Prime shipping, reduced logistics costs and access to Amazon's customer base.

What fees are charged for FBA services?

Amazon charges FBA fees including monthly inventory storage fees, order fulfillment fees and outbound shipping fees. There may also be other variable fees depending on the product.

How does Amazon ship items so quickly?

Strategic fulfillment center locations, advanced inventory and order management technology, and integrated transportation enable Amazon to often ship products within 1-2 days domestically.

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