If you are in the ecommerce business, chances are you have heard of FBA, or Fulfillment by Amazon. With FBA, you store your products in Amazon's fulfillment centers, and they pick, pack, ship, and provide customer service for these products. Multi-Channel Fulfillment (MCF) goes a step further and allows you to use Amazon to pack and ship your products that are sold on your own site and other ecommerce sites.
In order to participate in Multi-Channel Fulfillment, you must already be enrolled in FBA. Working with Amazon helps you to scale your business and reach more customers. It makes shipping and handling cheaper and less-time consuming, while promoting your products to a wider range of customers.
The process is quite simple. Once you have set up your FBA or MCF account, you create your product listings one at a time, in bulk, or by integrating your inventory management software with Amazon's API. Products are listed, prepared and shipped to Amazon’s warehouses. When customers order your products, Amazon picks, packs and ships them. Amazon also deals with returns and customer service on your products.
In return for fulfilling the order, the Amazon FBA fees include warehouse space, picking, packing, and shipping. For a three pound item, you’d pay about $2.50 per order for shipping and handling when the product is ordered through Amazon. If it is being sold through a third party ecommerce site, the fee comes out to about $3.80 per three pound order. This price still could be significantly less than the price of doing this in-house, which is one of the benefits of working with Amazon.
Another pro to Amazon MCF is their warehouse space and packing and shipping abilities. You could choose to sell hundreds or even thousands of products, without a concern of running out of space. And instead of spending hours organizing packing, shipping, returns, and customer service, Amazon takes care of all that for you. This frees you up to spend more time on other elements of your business.
One con, however, of the enormous storage capabilities, is the difficulty in keeping track of inventory. One of the most commonly overlooked problems for Amazon sellers is stale inventory, that is, paying to store products that aren’t selling. It can be difficult to evaluate your inventory when everything is automated and online if you don’t have a system in place. Keep an eye on products that aren’t selling, and make sure you’re continuing to restock best sellers to help eliminate this problem.
One of the greatest benefits to working with Amazon MCF is tapping into their Prime Shipping customers. Prime subscribers are not only loyal, but they tend to purchase more expensive items and buy 150 percent more than non-Prime customers. Even if you are selling your items on third-party sites, you and your customers can still be confident in Amazon’s reliable shipping services. With Multi-Channel Fulfillment’s cost-effective one-day and two-day delivery options, you can offer both alternatives to your customers, partially or fully charging them for the shipping option they choose. As a shipping giant, Amazon can be trusted to meet their shipping deadlines, greatly increasing customer trust in your business.
Not every product is eligible for Amazon FBA, however. They are very strict with which products are deemed hazardous and strictly prohibited from their fulfillment centers, including flammable liquids, flammable solids, and aerosols. And even products that are eligible are not cost-effective with Amazon FBA. Items with low volume and low margins will not be a profitable sell, nor will be heavy and inexpensive and heavy items with higher storage fees.
Multi-Channel Fulfillment also lets you easily scale and manage a peak in delivery at busy times of the year while managing your operational costs. You own the inventory, and can ask Amazon to return it to you at any time.
You may still be wondering, “is Amazon FBA worth it?” And this is a valid question, and something each individual business owner must ask themselves. MCF allows you to fulfill orders from any site while lowering costs and freeing resources to help you focus on growing your business.
But, to make it even simpler, Jazva helps sellers manage their FBA multi-channel sales. Jazva’s auto Amazon MCF feature helps you publish to FBA, view and manage FBA warehouse inventory and shipments, pricing, and keep all your channels organized. Interested? Contact us for a demo of our enterprise-level ecommerce solutions.