FBA or its alternatives? Which model is best for you?

Thanks to Amazon prime, 2-day shipping has been become one of the primary factors why so many customers choose Amazon as their first place when shopping online. As for sellers, shipping always is the challenging and cannot be underestimated aspect for their bottom line. And since Amazon dominates the ecommerce landscape, it seems as though every seller has to follow Amazon’s example –offering 2-day shipping- to meet buyers’ expectation and that’s why so many retailers feel pressured to choose Fulfilled By Amazon (FBA) to fulfill their Amazon orders. I’m not saying 2-day shipping isn’t important, it actually matters, but before you choose FBA as your shipping method, there are something you should dive into to work out the best fulfillment option for your business, because whether choose FBA or not is significantly influenced by your business scale and products, etc.

What’s FBA?

FBA (Fulfilled By Amazon) is a fulfillment service Amazon offers to sellers. FBA allows sellers to store inventory in Amazon’s fulfillment centers and ships their orders on sellers’ behalf that meet Amazon Prime shipping standards. Besides, Amazon is also responsible for the customer services for products with FBA.

Although, with FBA, sellers have access to Amazon’s remarkable logistics network and it will be easier for them to win the buy box by providing the Prime shipping service, it isn’t without its downsides.

Why you need an alternative to FBA?

As any FBA seller will tell you, the primary disadvantage is its cost. Since Amazon is responsible for all inventory management works, it can charge what it deems reasonable for its services.

Amazon will charge a monthly fee for per cubic foot warehouse space. Besides, Amazon will charge sellers with low inventory turnover or whose inventory is still in storage past a certain point in time, especially during the busy holiday season, which is intended to prevent sellers from taking up their valuable storage space by shipping the unsalable products to Amazon FBA shipping centers. For sellers who are selling long tail products, this makes the storage cost significantly high.

In addition, Amazon also charges for procurement, packaging, shipping and process, customer service and return shipping, which is based on product dimension and weight.

What’s more important, sellers have to follow the stringent packaging, FBA prep and labelling guidelines.

Now that you have knew FBA isn’t the best choice for any ecommerce brands because of its fees and limitations, here are some things you can do with Amazon alternatives that you can’t with FBA:

Control your inventory

Amazon’s fulfillment centers are not intended to be inventory storage facilities or long-term warehouses. Amazon penalizes sellers with low inventory turnover or whose inventory is still in storage past a certain point in time, especially during the busy holiday season. Inventory management is an important piece of your Amazon selling and shipping strategy, so being able to control and have insight into your inventory is crucial.

Avoid extra fees

In addition to a seller fee, Amazon charge two main types of FBA fees: warehousing fee and fulfillment fee.

The FBA warehousing fees include storing your inventory in Amazon fulfillment centers.

The FBA fulfillment fees include the entire picking, packing, shipping and returning (if any) process for each order shipped.

In a word, FBA fees can be complex and variable. They also charge you if you don’t meet their stringent prep standards, plus, extra fees may occur when there are seasonal factors and special product categories.

Using your own branding

Another distinct advantage of using a FBA alternative is sellers can make sure that the packaging is best suitable for their products. They can also apply their own brand and marketing inserts which may direct the customers to their own ecommerce websites for future purchase.

Working with a third-party logistics (3PL) provider as an alternative to Amazon FBA

By working with a third-party logistics provider, seller can enjoy plenty of benefits that FBA provides with reduced overheads. While different 3PL companies have different capabilities, all of them provide solution for managing inventory, picking, packing and shipping orders.

2-day shipping

3PLs usually cooperate with the majority of couriers companies to fulfill customers’ orders, and they have the steady order volume to negotiate a discounted shipping rate with courier companies, so sellers can leverage 3PL to have a reduced shipping cost to offer affordable 2-day shipping.

Distributed inventory

If you work with a 3PL with several warehouse locations, you can distribute your inventory across fulfillment centers to ship each order out from the one closest to your customer. This puts your inventory closer to more shipping destinations, meaning you can offer two-day shipping with much cheaper expenditure.

Inventory management

As mentioned above, inventory control is crucial for selling and shipping, and inventory management involves much more than just warehousing products, you need full insights into what is available to ship to your customers at any given time, so you can proactively reorder inventory to avoid stockouts. 3PL usually allows you to have access to you inventory in real-time through their software or web, which makes sure your inventory is under well control.

Order management

Having the order shipped accurately can contribute to higher account performance and customer loyalty. 3PL’s order management system streamlines the whole order process which offer automated order import and status tracking with improved accuracy.

Custom packaging

As mentioned above, Amazon FBA has stringent packaging rules and puts Amazon’s brand front and center. Working with 3PL you have the opportunity to create a brand experience through custom packaging and marketing inserts.

Multichannel fulfillment

3PL provider usually has integration with popular ecommerce platforms or marketplaces, meaning if you sell on different platforms or marketplaces, you can manage your inventory and order with just in one place, making it easy to manage multichannel sales.

SFC’s Amazon fulfillment service

If you are selling on Amazon and looking for a FBA alternative, SFC can be your reliable partner. With 18-years experiences of fulfilling Amazon and other leading ecommerce platforms’ orders, we have the confidence to provide sellers with simple, affordable and fast shipping fulfillment service.

Click here to know more about our service.

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