9 Order Fulfillment Methods For Amazon Sellers In 2023

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As an Amazon seller, choosing the right order fulfillment strategy can make or break your business. With the rise of e-commerce and consumers’ changing shopping habits, it is essential to stay ahead of the competition and provide the best possible customer experience. This blog post will go through some of the best order fulfillment strategies in 2023, their pros and cons, and our take on each.

Fulfillment by Amazon (FBA)

FBA is a popular order fulfillment strategy where Amazon takes care of the entire fulfillment process, from storage to shipping to customer service. Sellers ship their products to Amazon’s fulfillment centers, and when an order is placed, Amazon picks, packs, and ships the product directly to the customer. Here are the pros and cons of using FBA:

Pros:

• Amazon Prime eligibility: FBA products are eligible for Prime, which means faster shipping times and increased visibility for your products.
• Customer service: Amazon handles all customer service issues, such as returns and refunds.
• Storage: FBA provides sellers with storage space in Amazon’s warehouses, which can save money and reduce storage-related headaches.

Cons:

• Cost: FBA fees can be high, especially for large or heavy products. Additionally, FBA charges storage fees based on the time of year and the amount of space used.
• Lack of control: Since Amazon handles the fulfillment process, sellers have less control over the customer experience.

Our Take:

If you have a large product catalog, FBA can be a good option since it reduces the amount of time and money spent on fulfillment. However, if your products are large or heavy, the fees may outweigh the benefits of FBA.

Fulfillment by Merchant (FBM)

FBM is an order fulfillment strategy where the seller handles the entire fulfillment process, from storage to shipping to customer service. When an order is placed, the seller picks, packs, and ships the product directly to the customer. Here are the pros and cons of using FBM:

Pros:

• Control: Sellers have full control over the fulfillment process and can customize the customer experience.
• Cost: FBM can be more cost-effective than FBA, especially for smaller sellers with lower sales volume.
• Flexibility: Since the seller is in charge of fulfillment, they can make changes to their shipping policies and processes as needed.

Cons:

• Shipping times: Since the seller is responsible for shipping, the shipping times may be longer than FBA.
• Customer service: Sellers handle customer service issues, such as returns and refunds.
• No Prime eligibility: FBM products are not eligible for Prime, which can reduce visibility and sales.

Our Take:

FBM can be a good option for smaller sellers who want more control over the fulfillment process and are willing to put in the extra work. However, it is important to have a solid shipping strategy in place to ensure timely deliveries and happy customers.

Multi-Channel Fulfillment (MCF)

MCF is a service provided by Amazon where sellers can fulfill orders from their own e-commerce store or other sales channels using Amazon’s fulfillment network. Here are the pros and cons of using MCF:

Pros:

• Expanded reach: MCF allows sellers to reach customers on other sales channels, such as their own e-commerce store, while still using Amazon’s fulfillment network.
• Cost: MCF fees can be more cost-effective than FBA for multi-channel sellers.
• Prime eligibility: MCF products are eligible for Prime, which can increase visibility and sales.

Cons:

• Limited control: Since Amazon is handling the fulfillment process, sellers have less control over the customer experience.
• Fees: MCF fees can add up, especially for sellers with a high volume of orders.

Our Take:

MCF can be a good option for sellers who want to continue with the trusted services of Amazon with reduced dependence on them.

Dropshipping

Dropshipping is a popular order fulfillment strategy allowing you to sell products without holding inventory. When a customer places an order, the order is sent directly to the supplier, who ships the product to the customer. This strategy can help you save money on inventory costs and reduce the risk of holding unsold products. However, dropshipping can also result in lower profit margins due to the cost of goods sold is higher.

Pros:

• Low start-up costs as you don’t need to hold inventory
• No need to invest in warehousing or shipping infrastructure
• Reduced risk of holding unsold inventory

Cons:

• Lower profit margins due to higher cost of goods sold
• Less control over product quality and shipping times
• Greater reliance on supplier reliability

Our Take:

Choose a reliable supplier with a good reputation and track record for timely and accurate shipments. Also, ensure that you have clear communication with the supplier to avoid any delays or issues that may arise.

Print on Demand

Print on Demand (POD) is a fulfillment strategy that allows you to offer custom products to customers without holding inventory. With POD, you can create designs for products like t-shirts, phone cases, and more, and then have them printed and shipped to the customer on demand. This strategy can help you save on inventory costs and offer a unique selection of products to your customers.

Pros:

• Low start-up costs as you don’t need to hold inventory
• No need to invest in warehousing or shipping infrastructure
• Can offer unique and custom products

Cons:

• Higher cost of goods sold
• Limited product selection
• Less control over production and shipping times

Our Take:

Focus on creating unique designs that resonate with your target audience. Work with a reputable POD supplier who can produce high-quality products and ensure timely delivery to your customers.

3PL

Third-Party Logistics (3PL) is a fulfillment strategy that involves outsourcing your warehousing, shipping, and order fulfillment to a third-party logistics provider. With 3PL, you can focus on other aspects of your business while the provider takes care of your inventory and orders. This strategy can help you save on labor costs and improve efficiency, as the provider is experienced in handling inventory and orders.

Pros:

• No need to invest in warehousing or shipping infrastructure
• Experienced and reliable service providers
• Improved efficiency and reduced labor costs

Cons:

• Less control over inventory and shipping
• Higher costs compared to self-fulfillment
• Greater reliance on 3PL provider reliability

Our Take:

Choose a 3PL provider that has experience in your industry and offers reliable and timely shipping. Also, ensure that the provider offers real-time inventory tracking so you can keep track of your stock levels and restock as needed.

Mixed Fulfillment

In this order fulfillment strategy, multiple fulfillment methods are combined to achieve the best possible results for a business. For example, a seller may use a combination of FBA and self-fulfillment to optimize their inventory and shipping costs. This strategy can help sellers maximize their efficiency and cost-effectiveness by using a mix of different fulfillment options.

Pros:

• Optimizes costs and efficiency by combining multiple fulfillment strategies
• Provides flexibility to adjust to changes in demand or inventory levels
• Enables sellers to offer different shipping options and prices to customers

Cons:

• Can be complex to manage and may require additional resources to implement effectively
• May require additional investment in infrastructure or software

Our Take:

Use a data-driven approach to determine the optimal mix of fulfillment options based on your sales and inventory data. It’s important to closely monitor your costs and efficiency and adjust your strategy as needed.

Crowdfunding

Crowdfunding is a strategy that involves using a platform like Kickstarter or Indiegogo to raise funds for a product or project before it is launched. This strategy can help sellers gauge interest in a product and secure pre-orders before investing in inventory or production. However, it may be less suitable for sellers with established products or a large customer base.

Pros:

• Reduces risk by allowing sellers to gauge interest and secure pre-orders before investing in inventory or production
• Provides a platform to build a community and engage with potential customers
• Can help generate buzz and media attention for a new product or project

Cons:

• May require additional investment in marketing and advertising to reach a large enough audience
• Can be time-consuming to plan and execute effectively
• Success is not guaranteed, and campaigns may fail to reach their funding goals

Our Take:

Plan and execute your campaign carefully, including developing a compelling pitch, setting realistic funding goals, and building a community of potential customers before launching your campaign. Consider working with a crowdfunding consultant or agency to help you achieve success.

Local Delivery

Local delivery is a strategy that involves delivering products to customers within a local area. This strategy can be particularly effective for sellers with a brick-and-mortar presence, as they can leverage their physical location to offer fast and convenient delivery to nearby customers. It may be less suitable for sellers with a wider customer base or those without a physical location.

Pros:

• Provides fast and convenient delivery to nearby customers
• Can help build a loyal customer base and strengthen brand recognition in the local community
• May reduce shipping costs and transit times compared to other fulfillment strategies

Cons:

• Maybe less suitable for sellers with a wider customer base or those without a physical location
• Requires additional investment in delivery infrastructure and personnel
• May require additional marketing and advertising efforts to reach local customers

Our Take:

Develop a robust delivery infrastructure, including vehicles, personnel, and software to manage orders and track deliveries. Leverage your physical location to build a solid local customer base and promote your local delivery service through targeted marketing and advertising efforts.

In conclusion, there are many different order fulfillment strategies available to Shopify-Amazon sellers in 2023. By exploring various options and considering their pros and cons, sellers can choose the best approach for their business and achieve long-term success.