Table of Contents
- Introduction
- Selling on Amazon
- Selling to Amazon
- Using Amazon for Multi-Channel Fulfillment / 3PL
- Using Amazon as a Carrier
- Conclusion
- FAQ
Introduction
How many times have you found a brown cardboard box with the iconic smile logo at your doorstep, unsure of what you ordered? The prevalence of this experience, dubbed "Amazonesia," highlights Amazon's vast reach and the ease with which consumers can purchase items from the platform. Amazon's rapid delivery and comprehensive marketplace make it an indispensable platform for both consumers and merchants. This blog post will explore how merchants can leverage Amazon in various ways, whether it’s selling on the platform, using Amazon’s logistics, or utilizing Amazon as a carrier service. By the end of this post, you’ll have a detailed understanding of the myriad opportunities Amazon presents to merchants and how best to utilize these services.
Selling on Amazon
Selling on Amazon is one of the most common and accessible ways for merchants to reach a broad audience. Here, we’ll delve into different selling methods, each offering varied levels of control and benefits.
Seller Fulfilled Prime (SFP)
The Seller Fulfilled Prime (SFP) program is ideal for sellers who wish to ship directly from their warehouse to domestic Prime customers. This program is particularly beneficial for merchants dealing with high-value, slow-moving items, seasonal products, or inventory that requires special handling.
Advantages of SFP:
- Boosts seller reputation with the Prime badge
- Provides access to 24/7 customer service
- Allows for increased inventory control
Conditions for SFP:
- An on-time delivery rate of at least 93.5%
- Adherence to strict Amazon requirements
Platforms like ShipHawk can facilitate these processes by managing booking, picking, packing, labeling, and shipping tasks, all integrated seamlessly with Amazon Buy Shipping.
Fulfilled by Amazon (FBA) vs Fulfilled by Merchant (FBM)
FBA and FBM offer different fulfillment processes tailored to merchants' varying needs.
Fulfilled by Amazon (FBA):
- Merchants send products to Amazon’s warehouses.
- Amazon handles all logistics, including storage, packing, shipping, customer service, and returns.
- Products are eligible for Amazon Prime, enhancing visibility and sales.
Fulfilled by Merchant (FBM):
- Amazon lists the items, but the merchant handles storage, picking, packing, and shipping.
- Offers more control over the customer experience.
- Potentially higher profit margins due to lower fulfillment costs.
ShipHawk can aid merchants using FBM by automating fulfillment processes, ensuring seamless integration with Amazon’s system while maintaining control over inventory and packaging.
Selling to Amazon
Merchants also have the option to sell products directly to Amazon, which then takes ownership and can rebrand them under labels such as AmazonBasics or Amazon Essentials. Two primary methods are used in this approach:
Amazon Transportation Services (ATS)
Amazon Transportation Services (ATS) involves using a network of service providers contracted by Amazon for logistics and transportation tasks. Merchants ship their products to Amazon warehouses using specified carriers. ShipHawk’s integration with ATS streamlines the process by creating shipping orders, generating labels, and ensuring timely delivery to Amazon Fulfilled Centers.
Amazon Direct Fulfillment
Amazon Direct Fulfillment allows Vendor Central sellers to fulfill orders directly from their warehouses if Amazon runs out of stock. However, merchants must use ATS for shipping, facilitated by platforms like ShipHawk that book and manage shipping services, ensuring the products reach the end customer efficiently.
Using Amazon for Multi-Channel Fulfillment / 3PL
Amazon’s Multi-Channel Fulfillment (MCF) service acts as a third-party logistics provider, enabling businesses to consolidate their shipping needs across multiple eCommerce channels.
Key Features of Amazon MCF:
- Storage of merchant’s items in Amazon warehouses
- Fulfillment of orders across different platforms from one centralized system
- Seamless integration with tools like ShipHawk for managing shipping and rating information
This solution is ideal for businesses looking to try out new services like FBA while maintaining a streamlined logistics approach.
Using Amazon as a Carrier
Lastly, Amazon can act as a carrier service, facilitating shipping for products sold on Amazon, as well as those sold on other eCommerce platforms.
Amazon Shipping Service:
- Merchants sell items on their websites or other platforms.
- They purchase a shipping label and schedule a pick-up with Amazon Shipping.
- Amazon collects and delivers the items, providing tracking information throughout.
ShipHawk supports this process by handling booking, picking, packing, and shipping tasks, fully integrated with Amazon Seller Central to ensure smooth operations.
Conclusion
Understanding and leveraging Amazon’s diverse services can hugely benefit merchants by expanding their market reach and streamlining logistics operations. Whether it’s through seller programs like SFP, FBA, or FBM, leveraging Amazon Transportation Services, or using Amazon as a multi-channel fulfillment provider or carrier, the opportunities are vast. Platforms like ShipHawk can augment these services to further automate and integrate these processes, enhancing efficiency and profitability.
FAQ
What are the main benefits of using Seller Fulfilled Prime (SFP)?
SFP boosts a seller's reputation with a Prime badge, provides access to Amazon's 24/7 customer service, and allows for better inventory control. However, it requires adherence to strict performance metrics such as a high on-time delivery rate.
How do Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM) differ?
FBA involves sending products to Amazon's warehouses, where Amazon handles all logistics and customer service, making products Prime-eligible. FBM involves the merchant managing the entire fulfillment process, offering more control and potentially higher profit margins due to lower fulfillment costs.
What is Amazon Direct Fulfillment?
Amazon Direct Fulfillment enables Vendor Central sellers to ship orders directly from their warehouses to customers when Amazon runs out of stock, using Amazon Transportation Services for shipping.
How does Amazon Multi-Channel Fulfillment (MCF) benefit merchants?
MCF allows businesses to consolidate shipping needs from multiple eCommerce channels, using Amazon’s infrastructure for storage and fulfillment, integrating easily with platforms for seamless logistics management.
Can Amazon be used as a shipping carrier for non-Amazon sales?
Yes, Amazon Shipping can be used for products sold outside the Amazon platform. Merchants purchase shipping labels and schedule pickups with Amazon, who then handles the delivery, providing tracking information throughout the process.
Leveraging Amazon's multifaceted services can position your business for better market reach, efficient logistics, and ultimately, higher profits. Consider how these programs can be integrated into your current operations for streamlined success in eCommerce.
