Amazon is the business magnate of ecommerce that has become synonymous with online shopping. Starting its journey as an online bookseller, Amazon has come a long way with over 2.45 billion visits on a monthly basis and over 300 million active customer accounts.
Selling on Amazon has its perks, such as ecommerce sellers can tap into the largest customer base and boost their revenue. However, when it comes to fulfilling Amazon orders, ecommerce sellers often have to deal with high fulfilment costs that can cut down profits dramatically.
In this blog, you’ll learn what is ecommerce order fulfilment, what are your options for Amazon fulfilment, why you need better order fulfilment for Amazon, and how you can fulfil your Amazon orders more efficiently with a 3PL provider like Eshopbox.
Ecommerce order fulfilment includes all the processes—from storing inventory, picking and packing products, to shipping orders to your customers. And sometimes, it also includes handling order returns.
Similarly, when you are selling your products on Amazon, you need order fulfilment for your Amazon orders.
Amazon offers three order fulfilment options to its sellers:
The three options for Amazon fulfilment offer distinctive pros and cons. So finding an option that offers most flexibility, efficiency, and cost savings is crucial. Let's dive into each one of them.
Fulfilment by Amazon (FBA) may seem like the best option to fulfil your Amazon order as it offers various benefits to a seller like access to Amazon's network of fulfilment centres, Prime badge on listed products, and returns management. However, FBA has several drawbacks as well such as high storage and fulfilment fees, lack of inventory control, complex fee structure, and more. This means, Amazon does give you extensive customer reach but if you avail FBA, its high fees cuts deep into your revenue—minimising your profits significantly.
In Easy Ship (ES), Amazon only takes care of shipping of your Amazon orders. You still have to store your inventory in a secure storage facility, pick and pack your orders according to Amazon’s guidelines. Moreover, Amazon has various penalties pertaining to its stringent packaging and labelling guidelines.
The Self-Ship option may look like the only viable option to cut costs where you take care of storing, picking, packing, and shipping your orders. However, it is usually a bad idea— there are multiple hidden costs in self-fulfilment that significantly increase your overall order fulfilment cost. Self-fulfilment is usually suitable for small businesses that are just starting out or in the initial stage with low daily order volume.
On the brighter side, there’s still a way to carry out order fulfilment for your Amazon orders efficiently. Outsourcing order fulfilment to a 3PL (third-party logistics) provider can enable you maintain seamless order fulfilment for Amazon. It is the most-efficient and cost-effective way of Amazon order fulfilment as they bring considerable expertise and knowledge to the table with numerous benefits. You don’t have to worry about meeting the strict SLAs (service level agreements) of Amazon, as tech-enabled 3PL providers are compliant with all the policies and guidelines. This means, you can just focus on your core business and the rest is taken care for you by the 3PL provider.
According to a study, 70% of shippers say that a 3PL saved them money. While 83% of shippers say that 3PLs improved their customer service.
Amazon has a complex fee structure with fixed, variable and situational fees. Apart from a seller fee, Amazon charges fulfilment fees and inventory storage fees. Moreover, Amazon fees can vary based on seasonality and product category. For instance, Amazon's storage fees become more expensive during the holiday season and charges an extra fee for fashion category.
In contrast, 3PL providers like Eshopbox provide simple pricing with two primary components:
Eshopbox has a distributed network of fulfilment centres spread across India which enables you to split your inventory and store it closer to your customers. This allows you to reduce shipping costs by enabling you to offer ground shipping instead of expedited shipping by air.
Amazon is known for its delivery speed and expects all its sellers to meet this fundamental requirement with 2-day delivery. However, offering 2-day delivery can take a huge toll on your margins. Eshopbox meets Amazon's stringent requirements so that your product listings are Prime enabled and you can offer lightning-fast shipping speed like 2-day delivery, affordably.
Eshopbox allows ecommerce sellers to centralise their inventory, this means you can sell on Amazon as well as other sales channels (including marketplaces and your own website) from one point-of-control, while maintaining the Prime badge. This means, you can use the same inventory pool to fulfil your orders for other sales channels without committing inventory to Amazon alone. Thus, allowing you to leverage multichannel ecommerce, accelerate your sales velocity and boost your revenue.
Eshopbox can help you fulfil your Amazon orders as efficiently as possible, helping you on your journey to becoming an Amazon premium seller. This means, you can improve your performance and meet the inspection criteria standardised by them:
Criteria 1: Total cancellation rate
Criteria 2: Total late dispatch rate
Criteria 3: Seller controllable return rate
Criteria 4: Out of stock rate
Criteria 5: Prime listing customer views %
Criteria 6: Regional in-stock %
Criteria 7: Net sales volume or net sales unit
Eshopbox enables you to excel at the above criteria by helping you:
If you’re still fulfilling your Amazon orders with FBA, you must reconsider your options and look for an alternative. Amazon can help tap into a customer base of crores because that’s what it is made for- helping you sell your products online. However, when it comes to order fulfilment, you must leave it to an expert—a tech-enabled 3PL provider. A 3PL can help you maximise your profit margins and deliver your Amazon orders efficiently to your customers.