Amazon is extremely powerful, but it can be a complicated marketplace for sellers. There\u2019s a lot to navigate (particularly around rules and regulations) and many options to weigh up.<\/p>\n\n\n\n
Some online retailers use Fulfilled by Merchant (FBM) to stay in charge of the fulfilment process by shipping orders from their own warehouse \u2013 others opt for FBA whereby Amazon takes on that responsibility. And of course others outsource everything to a\u00a03PL as a FBA alternative<\/a>.<\/p>\n\n\n\n Whichever fulfilment route is taken, this crucial decision can have a major impact on business operations, the delivery experience and ultimately, brand reputation.<\/p>\n\n\n\n As an Amazon seller, you gain valuable access to Amazon\u2019s humongous customer base and logistics infrastructure. Everyone knows Amazon \u2013 it\u2019s a household name synonymous with online shopping.<\/p>\n\n\n\n It\u2019s a valuable source of revenue and an effective route for new, growing brands to gain visibility without the expense of mass advertising. When you sign up to FBA, you\u2019re placing the responsibility of fulfilling customer orders in the hands of Amazon.<\/p>\n\n\n\n While this all sounds wonderful, there are a few known FBA sticking points that may hamper your brand growth effort.<\/p>\n\n\n\n Amazon. eCommerce giant. Access to more than 197 million potential customers around the world, every month. That\u2019s why you\u2019re all for using FBA.<\/p>\n\n\n\n But, competing with Amazon itself is inevitable for many merchants. In fact, half of sellers<\/a> say Amazon sells products that directly compete with their products, and two-thirds are concerned that this increased competition is driving prices down.<\/p>\n\n\n\n Plus, product placement fluctuations on Amazon\u2019s algorithmically generated search and product listing pages adds another layer of competition complexity \u2013 so too does the \u2018Buy Box\u2019 which displays lower-priced offers from different FBA \u2018me too\u2019 sellers.<\/p>\n\n\n\n Then there\u2019s the pandemic which led to an increase in online shopping, companies upping their eCommerce game and a surge in Amazon product listings\/FBA sellers.<\/p>\n\n\n\n Co-mingle: to mix together things of different types<\/em><\/p>\n\n\n\n If you decide to use FBA, you\u2019ve the option of sending your products to Amazon\u2019s warehouses without having to provide product SKU-level stickers on every unit.<\/p>\n\n\n\n Sounds much easier, right?<\/p>\n\n\n\n Not if your stickerless inventory gets mixed in with the inventory of other FBA sellers of the same SKU.<\/p>\n\n\n\n When a customer places an order from one FBA merchant, Amazon picks the most convenient inventory \u2013 even if that isn\u2019t the inventory the seller sent in to FBA. This ensures the customer delivery promise is honoured.<\/p>\n\n\n\n Where it gets even \u2018stickier\u2019 is when a seller sends in a used product, or even a counterfeit product, and you \u2013 as a new FBA seller \u2013 get in trouble with Amazon for selling a \u2018questionable\u2019 product to a customer, even if it wasn\u2019t the product you supplied. At which point you might need to do a lot of work to prove your stock is genuine.<\/p>\n\n\n\n It comes as no surprise then that \u2018Protecting against \u2018black hat\u2019 tactics, counterfeiters and other risks\u2019 is one of the cited key challenges in this particular 2021 Amazon Seller Report<\/a>.<\/p>\n\n\n\n Amazon\u2019s big on compliance, rightly so, but bear in mind that any policies you\u2019ve set previously go out the window with FBA. What you sell on Amazon must comply with their exacting requirements for shipping and returns.<\/p>\n\n\n\n And if you don\u2019t comply? Your Amazon store could be closed with little or no warning. Sellers even talk of having their stores removed due to late shipping or bad weather (factors that were out of their control). Yes, really.<\/p>\n\n\n\n Amazon offers sellers the ability to advertise on the platform, and as with any type of advertising, competitors paying for it will push your products lower down the list. Then it becomes a visibility war.<\/p>\n\n\n\n All of those customer ad clicks equate to key intel for Amazon; what products customers are searching for, what they actually \u2018add to basket\u2019, how much they buy and at what price, and so on. Amazon can use that intel to its advantage, especially for its own brands, and so as an FBA seller, your products\/sales can become somewhat cannibalised.<\/p>\n\n\n\n The decision to use FBA boils down to control and what works best for your business.<\/p>\n\n\n\n How much trust do you place in the hands of Amazon to take care of your inventory and eCommerce delivery experience?<\/p>\n\n\n\n Using FBA can be a great way to scale a start-up business, but when you see a flood of sales, you\u2019ll also see an enormous amount of admin. You might, in some ways, feel you\u2019re working for Amazon rather than yourself, and that FBA just isn\u2019t the right fit for your fulfilment operations.<\/p>\n\n\n\n Frau Green, an independent online craft shop based in Manchester, UK, moved away from using FBA to regain control of its brands.<\/p>\n\n\n\n One of the reasons why we switched from FBA to a 3PL was that we needed to have control over the branding on the packaging and invoices. James and James created a bespoke invoice template that perfectly suited our requirements, as well as creating two brands so we could dispatch items under different branding. We also needed a fulfilment option that could dispatch orders quickly.<\/strong>– Sophie Green, Co-founder and Director – Frau Green<\/p>\n<\/blockquote>\n\n\n\n Sophie, Co-founder and Director of Frau Green said, \u201cJames and James\u2019s excellent on-time fulfilment rates are invaluable to us. The system makes it clear what stage each order is in the fulfilment process, and also flags any orders which have errors in the address so we can confirm with the customer before despatch.<\/p>\n\n\n\n \u201cOne key feature of 3PL over FBA, specifically with James and James, is the ability to view which orders contain items which are out of stock. We order many items on a \u2018Just In Time\u2019 basis, and so to see which orders require more stock is important. We use this to keep track of any customers with back ordered items and to be sure these orders are processed in a timely manner.<\/p>\n\n\n\n \u201cWith James and James, we\u2019re saving tons of time on processing orders and booking in stock. Now that we\u2019re not physically packing each order and receiving and storing inventory, we have more time to grow our business. Our CRM rates have improved too as we have an electronic record of tracking numbers and courier tracking links which we can immediately send to the customer.\u201d<\/p>\n\n\n\n J&J is an industry-leading 3PL provider<\/a> with global fulfilment centres<\/a>. We combine great processes with great technology, resulting in fast, accurate, and cost-effective shipping to customers across the world.<\/p>\n\n\n\nWhat are the pros of using FBA?<\/h2>\n\n\n\n
In the most simplistic form, here\u2019s how FBA works\u2026<\/h4>\n\n\n\n
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The pitfalls of FBA<\/h2>\n\n\n\n
Fierce competition<\/h4>\n\n\n\n
Co-mingled stickerless SKUs<\/h4>\n\n\n\n
Comply or close<\/h4>\n\n\n\n
Amazon ad space<\/h4>\n\n\n\n
So, is FBA really that fulfilling?<\/h2>\n\n\n\n
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Unlock your eCommerce potential with J&J<\/h3>\n\n\n\n