We’re going to look into a subject that can be very challenging for new sellers. You are a merchant/seller and have been fulfilling your orders through your own warehouse – FBM (fulfilled by merchant.) You’re wondering what is involved in selling your product on Amazon and fulfilling through FBA (Fulfilled by Amazon.) FBA sellers from Amazon can use the FBA program and pay Amazon’s fulfillment centers to warehouse and ship their products, and/or they can warehouse and ship their own products – FBM – but what about another order fulfillment method?
A third option is to do both, but that can be complicated and costly. Our question is, what would be gained if the company utilizes a 3PL (3rd party logistics) company to do both FBA and FBM? Below we cover FBA vs FBM and how you can mix both strategies to get the best of both.
What Would a 3PL do?
Many Amazon sellers find that their strategy is neither 100 percent FBM nor FBA, but a mix of both. There are pros and cons for each order fulfillment method, specifically the costs associated with them. When a company sells through FBA and FBM a 3rd party fulfillment company (3PL) can take the complexity out of the picture and save money for the merchant.
Your 3PL should be able to manage all order fulfillment tasks, sending bulk orders for fulfillment by Amazon (FBA), fulfill drop-shipping via Merchant Fulfilled Network (MFN) / Fulfillment by Merchant (FBM), and most importantly, Seller Fulfilled Prime (SFP). Your fulfillment company must be adept at managing the routing and compliance complexities that go along with utilizing several sales channels, such as Amazon, traditional wholesale channels, brick-and-mortar retailers, the client’s shopping cart, and E-tailers such as Walmart, Kohls, Nordstrom, and many more.
Your 3PL order fulfillment company should be prepared to support the direction your company wants to go. A good fulfillment company will be able to control the high-impact storage costs that are associated with Amazon FBA, especially when the product doesn’t sell promptly. Another cost saving from using a 3PL will come with competitive shipping options including expedited methods that are often necessary to comply with Seller Fulfilled Prime’s requirements.
This means that when a 3PL is fulfilling Amazon FBM orders the company is no longer paying the FBA fulfillment fees, storage, order processing, and more. Those that are using Seller Fulfilled Prime (SFP) can use the 3PL rates that are typically lower than Amazon.
Another advantage of a 3PL is branding and premium “unboxing” that customers can enjoy which is not an option with Amazon FBA. Premium brands can be sold directly on Amazon, be fulfilled by your 3PL, and maintain the unboxing experience.
Choosing AMS Fulfillment
Our knowledge of how to utilize the Amazon sales channel is gained from many years of experience. What can you gain from AMS?
- Exposure to Amazon customers while AMS fulfills the orders.
- Ability to fulfill offline and online orders from the same warehouse.
- Fulfillment of orders from different online portals, not just Amazon.
- More packaging control with your branding.
- Ability to utilize Seller Fulfilled Prime (SFP) program.
- More inventory control and no hefty storage fees for slow-moving inventory.
- Better profit margins
- More overall control of your business and your customer’s experience.
We hope you’ll consider AMS Fulfillment if you’re thinking about how a 3PL can help with FBA vs FBM decisions. Contact Us today!