Amazon FBA: what it is and how it works. A guide to costs and selling strategy

What is the Amazon FBA service and why does it attract so many sellers?

The acronym FBA stands for Fulfillment by Amazon and indicates a model where the marketplace manages storage, shipping, and customer service on behalf of the seller.

Although the service offers immediate visibility, it is essential to ask whether Amazon FBA truly works as the sole business pillar. It is often presented as the only way to succeed online, but this approach hides a critical pitfall: the loss of control over business ownership and the relationship with the consumer.

For example, a cosmetics manufacturer that relies exclusively on FBA delegates every interaction to Amazon: the customer receives the product in anonymous packaging and, in case of problems, contacts the marketplace support instead of the brand. In this scenario, the brand does not obtain the email address for future promotions, nor can it include a free sample to encourage a repeat purchase on its own site, transforming a potential loyal customer into an anonymous Amazon buyer.

Do you need a VAT number to start Amazon FBA?

One of the primary barriers to entry relates to regulatory compliance. To operate professionally and on a continuous basis, the answer is yes. A VAT number is mandatory for Amazon FBA. Selling goods as an organised entity constitutes a business activity, necessitating a robust tax structure. Many brands seeking to understand the onboarding process for Amazon FBA face complex initial requirements:

• Registering a tax position and enrolling with the Chamber of Commerce

• Brand Registry to safeguard intellectual property

• Navigating the Amazon FBA enrolment and Seller Central account configuration

• Ensuring compliance with European product conformity regulations

T-Data facilitates this transition by streamlining the marketplace launch. We support brands in managing the operations required for Amazon FBA in Italy through a structured approach, mitigating the administrative burden for managers.

Cost Analysis: how much does Amazon take from sales?

A common mistake is underestimating the impact of fees on the final margin. When evaluating the start-up costs for Amazon FBA, a tiered fee structure must be considered:

1. Referral fees: a percentage of the selling price (usually between 8% and 15%)

2. Fulfilment fees: the cost for picking, packing, and shipping

3. Storage costs: monthly fees based on the volume occupied in warehouses, which increase significantly during peak periods or for long-term inventory

Analysing Amazon FBA costs reveals that rigid storage fees can erode profits if stock turnover is not optimal.

T-Data offers a more flexible alternative: a multi-channel management system where a single centralised stock serves both the proprietary website and various marketplaces. This optimises start-up costs and ensures more transparent margin management, less constrained by the marketplace's fee fluctuations.

Who owns the customer with Amazon FBA?

The data dilemma The primary limitation of the FBA model is consumer anonymity. If you use Amazon exclusively, the customer belongs to the platform, not to your brand. Understanding how to profit from Amazon FBA in the long term requires a vision that goes beyond the individual sale, focusing on the customer’s Lifetime Value.

T-Data subverts this logic. Even if you choose to maintain a presence on the marketplace, integration with our infrastructure allows you to retain control of the data. Strategically, it is essential to consider Amazon FBA as an acquisition channel rather than a mere warehouse. Selling through a hybrid model allows you to:

• Collect valuable data for direct marketing activities

• Build customer loyalty through a personalised shopping experience on the proprietary website

• Implement effective retargeting strategies

T-Data logistics goes beyond the anonymous parcel

Operating with Amazon FBA means dealing with strict logistical standards. With FNSKU regulations, specific labelling, and standardised packaging, the result is an anonymous parcel that fails to communicate brand identity.

When evaluating how to sell products on Amazon FBA, differentiation becomes a complex challenge, as the unboxing experience is identical to that of thousands of other sellers. T-Data offers the operational freedom that the marketplace denies:

• Branded packaging: shipments that speak about your brand

• Customisation: inclusion of flyers, discount coupons, or free samples

• Dedicated customer care: direct support that resolves issues without automated responses

In crowded categories, attention to logistical detail is what distinguishes a quality product from a cheap commodity.

The Omnichannel strategy with T-Data

In a mature market, the choice should not be between Amazon and your own e-commerce, but in the ability to maintain a presence on both with consistency. Many ask how much you actually earn with Amazon FBA. The answer depends on brand protection. Earnings increase when dependency on a single channel is reduced.

Knowing how to work with Amazon FBA means using it as a global storefront, while simultaneously leveraging T-Data as the logistical engine and guardian of the customer relationship.

T-Data frees brands from operational complexity, allowing marketing teams to focus on the product while we manage the entire infrastructure, from checkout to final delivery.