Amazon pushes its Fulfillment by Amazon (FBA) service heavily on every Amazon seller who has established themselves on the platform. You’ve got to use it to get your Prime badge, and that is often a compelling element for people to join FBA.
However, you may quickly find that the Prime carrot comes with a much larger stick than you anticipated. FBA has very detailed and specific requirements for sending them your goods and label products, the sales numbers you need to maintain, customer service requirements, and adherence to Amazon’s inventory storage limits with related costs.
If you’re looking at the variety of costs or find that Amazon doesn’t make sense for your products — common for heavy items as well as large or bulky goods — then it could be time for an alternative to FBA. Not only can you better control and manage costs in many of these cases, but you might also be able to offer speedy shipping to rival Prime on anything you sell on Amazon, your website, social media, and more.
1. Fulfilled by Merchant
Amazon’s Fulfilled by Merchant (FBM) is a fulfillment method where you, the company selling something on Amazon, are responsible for shipping orders to customers after buying from you on Amazon. The FBM service operates just like running your own warehouse and requires that you manage the entire process and meet high levels of accuracy, on-time delivery, and customer service.
If you’re new to Amazon selling, you’ve got to use the FBM program – you need a strong reputation to move into FBA – but the good news is that you can use FBM with your operations or outsource it to a 3PL like Red Stag Fulfillment.
Amazon doesn’t generally care how you do the actual shipping process as long as you’re meeting its service and demand metrics. The great news is that you can work with us or do it yourself while getting lower fees compared to FBA, you don’t have to meet FBA’s demanding requirements, and you have broader control over your business.
You won’t get the Prime badge for your products, which can be a cause for concern. However, if you have a fast team or reliable partner, you can still ship to customers in that same two-day window and minimize any losses.
2. Seller-Fulfilled Prime
You may have heard about Seller-Fulfilled Prime (SFP), a service where Amazon lets you ship your own goods and still get the Prime label.
That’s great if you already have access to SFP. We can even help you ensure you meet those qualifications as you grow.
The downside is that Amazon hasn’t been letting new companies use SFP. Reports suggest that Amazon turned this into a permanent waitlist starting in March 2019. It’s possible Amazon has realized how lucrative forcing companies to use FBA can be if they want the Prime badge for products. It’s also a way to control how your operations are run and the overall experience customers shopping on Amazon have.
3. Do-It-Yourself Fulfillment
If you’re considering FBM or not an Amazon seller, there’s still a do-it-yourself option that applies to other stores and sales channels. The DIY model of fulfillment, also called in-house order fulfillment or self-fulfillment, happens when you control the fulfillment yourself with your own team. You might do this in a garage or office space, or when you scale up and need a full warehouse of your own.
Self-fulfillment is often where eCommerce stores start because you only need warehouse labor when there is an order. So, people often have a standard role, and then everyone helps out in times of large demand.
To do it right, you need your own location and space, team, management, equipment and packaging materials, and order management tools.
You also need to secure new types of insurance and liability coverage for your staff. That’s important whenever you add any task that can be harmful, especially when equipment like a boxcutter or forklift is involved.
You control the process but also have to pay for everything. It can be manageable at first but often challenging to scale. If you need to expand your warehouse, consider looking at third-party services before breaking ground on a new site. 3PLs and others can often be a great interim solution to help you control costs and focus on continued business revenue growth.
4. 3PL Fulfillment
Third-party fulfillment is when you use a 3PL like Red Stag Fulfillment to handle all of the shipping and logistics of your business for you. We work with you and your suppliers to have your products brought to our warehouse locations, unload the inventory, and get it prepped for order fulfillment. When an order arrives at your Amazon page or any other channel where you sell, the order goes to the 3PL’s system where they pick it, pack it, and get it off to the customer right away.
Most businesses look to 3PLs as they grow because we have extra space and teams to handle any inventory expansion. Plus, a 3PL will have the tech needed to integrate your order platforms, expertise to quickly fill orders, and the volume to get shipping discounts from carriers. And it can come with the same two-day window.
Red Stag Fulfillment works with many Amazon sellers, including those in the Seller-Fulfilled Prime category, because we have a proven track record of getting goods to people on-time and accurately. We work to ensure your customers are happy, allowing you to meet the service and satisfaction requirements that Amazon puts in place.
Ultimately, you get world-class shipping and fulfillment operations without the headache of running a warehouse, managing that staff, or facing unexpected price increases when you need to scale up or down.
If you don’t own your inventory or want to test out a new product category without sinking a lot of cash into inventory, dropshipping might be a smart option for your eCommerce fulfillment needs.
Dropshipping is a fulfillment strategy where you never need to touch a product. Your business operates sales and customer service channels, and then your dropshipping supplier sends it directly to the customer. You buy from these third-party services at a reduced rate and then sell the item for full price, but you only buy something once you have an order for it.
The good news is that there are many, many products available and most major eCommerce platforms support dropshipping. You can test market interest in a product or category, expand your offers, and focus on sales and marketing above all else. The downside is that your margins will be low and – in almost every case – any other company can sell the same products you offer.
It’s a terrific way to get your feet wet and grow a business that eventually becomes more profitable by transitioning to more standard eCommerce but with an existing customer base.
Don’t Forget to Try Multiple Methods
One thing we at Red Stag Fulfillment encourage companies like yours to do is to try out multiple shipping options and opportunities. You might fill some orders yourself but can test a 3PL for large products like furniture where their carrier discounts can make a substantial difference. Or you might want a partner just for Amazon purchases to ensure on-time delivery while your website only features products that you dropship.
There are plenty of opportunities to mix and match fulfillment, allowing you to test and see where you get the best value. Find partners who are willing to work for you and encourage your business. That’s especially true during times like COVID-19 when you might have a disruption at your facility but still need to get orders out. A 3PL backup partner could then be mobilized to handle all orders, and you won’t face revenue disruption.There are lots to consider. If you’ve got questions, reach out to us here for a no-obligation conversation about your current fulfillment, if you need Amazon support, and if you could save with us or another 3PL.