Fulfillment By Amazon (FBA) has become the Etail community’s “fast food” for fulfillment solutions. The convenience factor is very strong with FBA, but is it the healthiest choice?
There are about 37,000 McDonald’s restaurants in the world serving 68 million people daily. People flock to these and other fast food eateries for one primary reason: they are fast and easy. Despite the reams of data on the negative health impacts of fast food, for busy people the lure of “easy” is very powerful.
Ask Etailers why they use FBA to fulfill Amazon and non-Amazon orders and the answer will be similar: it’s fast and easy. These extremely busy entrepreneurs prefer to focus their time and energy on company growth. Pushing the FBA button is seen as a safe and easy way to check the fulfillment solution box.
Let’s be clear: FBA is an amazingly large and efficient machine. But, like fast food, is the convenience worth the downside?
Is FBA’s Convenience Worth It?
When you drive up to a fast food restaurant, you order from a set menu of pre-prepared items, receive them quickly, and you’re on your way. You can tweak your order to a small extent but, in general, the items are what they are. It’s a process that’s high on convenience, and low on customization.
FBA is kind of the same. The model demands process consistency, therefore custom packaging, branding and special requests are off limits. There’s little opportunity to tailor FBA operations to fit your specific business needs.
Along with this lack of customization, there are other FBA “cons” which may negate the “pro” of its convenience – several of which are covered in detail in our eBook, Amazon: Great Sales Channel, Poor Fulfillment Strategy.
Let’s look at costs, for instance. There are subscription, fulfillment, and storage fees associated with FBA that can add up and eat at your profit margin – especially for smaller, lower-cost items. Storage fees, in particular, are important to examine because they rise dramatically during Q4. There are also ‘long-term storage fees’ for items in Amazon storage 6 months or more. Those long-terms fees double at the 12-month mark.
As for your branding, your product will be shipped in Amazon packaging with Amazon’s branding.
A simple online search will reveal other limiting aspects of FBA as seen by current and former Amazon sellers. These include issues related to lack of customer service for small sellers, lack of multi-channel fulfillment capability, and an inability to control product quality.
So, just as the convenience of fast food may not be worth the detrimental impact on your health, the perceived ease of implementing FBA for fulfillment solutions may not be worth the high cost and operational limitations.
Fulfillment Solutions That Offer Convenience Without the Cons
Are there options out there that offer the convenience of FBA without the downsides? Who can handle your fulfillment and free you up to run your business, worry free?
Enter the third party logistics company (3PL).
These fulfillment specialists handle all the services of FBA and then some. They house your product, manage inventory, receive orders, pick/pack/scan/label/ship the product, and handle returns. But, it’s what they don’t do that’s may be most important.
3PLs do not strip the uniqueness from your brand and force you to fit inside a rigid fulfillment program template. A 3PL that understands B2C fulfillment (not all do) knows that every Etailer looks, thinks, and operates differently. The 3PL’s value is in taking that individuality, supporting it with a robust logistics infrastructure, and then managing your supply chain smoothly and efficiently.
With a 3PL, your operations can be almost endlessly customized; your branding is allowed to shine; you receive personal support every step of the way by actual people; and your customers are delighted by fast and efficient service.
And, as for convenience, a 3PL process may not have the same “plug-and-play” approach of FBA but, in many ways, it's more convenient. First of all, with a 3PL an actual live person will be there to take your call if there are issues. A 3PL will also customize every aspect of a fulfillment project, down to details like selecting packaging materials and choosing the best time of day to ship. In short, leading 3PLs have the infrastructure to get you up and moving quickly like FBA, but have the added advantage of individualized attention every step of the way.
3PLs Address Three Key Concerns: Cost, Customization and Convenience
There is a reason most Amazon sellers choose to fulfill through FBA. Amazon has built an incredible infrastructure for rapid fulfillment solutions. Business owners choose it for the same reason busy people eat fast food; it’s a quick, easy and safe choice. But before you pull up to that FBA fast-food window, know that there are healthier options out there that are just as convenient, and can also provide cost-effective fulfillment with near unlimited customization.