Amazon FBA (Fulfillment by Amazon) has been the backbone for many small-to medium-sized businesses (SMBs) in managing their fulfillment of orders. By storing products in Amazon’s fulfillment centers, sellers can leverage the retail giant’s vast logistics network for storage, packing, and shipping their orders, often harnessing the coveted Prime shipping badge to entice customers.
However, many sellers are actively seeking alternatives to Amazon FBA. The reasons for this shift include:
- Rising Costs: As Amazon adjusts its fee structure, sellers face higher costs that cut into their margins.
- Policy Changes: Frequent modifications in Amazon’s policies create uncertainty and can disrupt inventory management and shipping processes.
- Marketplace Control: Sellers strive for greater command over the customer experience and branding opportunities.
- Flexibility Needs: Businesses require more adaptable solutions as they scale up or diversify their sales channels beyond Amazon.
These factors compel sellers to explore various options that align with their operational needs and fortify their resilience against market changes. Switching to alternatives allows them to regain control over critical aspects of their business while effectively fulfilling customer expectations.
What is Amazon FBA?
Amazon is the top ecommerce destination in the world. When asked about where online consumers start shopping, 61% said they start their search for products on Amazon. Amazon has 6.4 million total sellers worldwide and is the largest online retailer in the world.
One of the reasons consumers prefer Amazon is because Prime offers fast, free shipping. In this digital day and age, consumers have come to expect near-instantaneous results. Unfortunately, as an SMB it can be difficult to process orders with the speed and efficiency of a global shipping empire. When left to your own devices, facing the pressure of a time crunch to get products out the door within the two-day window can be intimidating. It can also hit your profits when you’re absorbing the shipping costs.
For these reasons, the Fulfillment by Amazon (FBA) option available to sellers seems like a lifesaver. Sellers ship their products to one of Amazon’s 185 global fulfillment centers. From there, the Amazon warehouse employees handle the rest of the shipping process for you, including packing items, shipping them to consumers, tracking the order, and handling the return & refund processes as well.
One advantage of Amazon FBA – products are automatically eligible for Prime two-day shipping. It sounds like a dream come true for SMBs since it mitigates the need to handle your own shipping procedures.
Understanding the Impact of Amazon FBA Changes on SMBs
Amazon FBA is constantly changing and it’s complicated and expensive for many SMBs. These changes, which often come as a surprise, can bring many difficulties and uncertainties.
Challenges Introduced by Amazon FBA Changes
Here are some of the challenges that sellers may face due to these changes:
- Disruptions caused by policy updates: Sudden changes in inventory management rules and shipping processes can lead to problems such as delays or incorrect shipments, resulting in unhappy customers. In some cases, these disruptions may even lead to account suspensions.
- Financial impact: Sellers are also concerned about the financial implications of these changes. This includes increased fees, storage costs, or changes in the criteria for Prime eligibility. For example, in July 2020, Amazon introduced a new policy limiting the number of units sellers could send to their fulfillment centers for certain products. This change had a significant financial impact on businesses that heavily relied on Amazon’s fulfillment services.
These changes highlight the importance of adapting and bouncing back in today’s ecommerce world. However, constantly adjusting to new circumstances requires valuable resources like time, money, and effort – things that many SMBs simply cannot afford to spare.
Exploring Alternatives to Amazon FBA
So what happens when the cost of adapting becomes too high? Sellers have started looking into other options besides Amazon FBA – solutions that provide stability, transparency, and control over their own business operations.
The Role of COVID-19 in Shaping the Need for Amazon FBA Alternatives
COVID-19 caused a massive increase in online shopping, which led to a higher demand for ecommerce fulfillment services like Amazon FBA. This situation tested how well fulfillment networks could handle such a sudden and large increase in orders.
While many sellers prefer using Amazon FBA, it faced its own set of challenges during the pandemic. The sudden surge in orders caused significant disruptions in their services. As a result, there were delays in processing and delivering orders, directly impacting customer satisfaction and the likelihood of customers making future purchases.
Decrease in Active Sellers on Amazon
During this time, there was also a decrease in the number of active sellers on the Amazon marketplace. Two main factors influenced this change:
- Increased Competition: With more people shopping online, businesses saw an opportunity to reach a larger audience and moved their operations online as well. This led to more sellers competing for customers’ attention and sales.
- A shift in Consumer Behavior: The pandemic caused changes in consumer behavior, with more people relying on ecommerce for their shopping needs. This shift meant that businesses needed to adapt quickly to meet the growing demand for online purchases.
These uncertainties around managing inventory and meeting delivery deadlines added to the existing challenges sellers face on Amazon. As a result, many of these sellers started looking for alternatives that would give them more control over their business operations while still ensuring customer satisfaction.
Alternatives to Consider for Your Ecommerce Business
1. Fulfillment by Merchant (FBM)
Fulfillment by Merchant, often abbreviated as FBM, is a method that allows sellers to be in charge of their storage, packaging, and shipping processes. A significant advantage of this approach is the level of control it provides over the entire fulfillment process.
Advantages of FBM:
- Greater Control Over the Fulfillment Process: Sellers can directly oversee every aspect of order fulfillment by handling everything in-house or with a 3PL. This includes managing inventory levels, controlling packaging quality, and deciding on the best shipping methods.
- Personalized Branding in Packages: Another key advantage of FBM is the opportunity to include personalized branding in packages. Custom inserts, branded packaging materials, and personalized thank-you notes can all add a unique touch to your customer’s unboxing experience and help foster brand loyalty.
Drawbacks of FBM:
- Higher Shipping Costs: Unlike Amazon FBA, which leverages Amazon’s vast logistics network for cost-effective shipping rates, sellers using FBM might face higher costs due to individual parcel shipping.
- Increased Operational Workload: Managing inventory, processing orders, packing products, organizing shipments – these tasks all add up. For small businesses without a dedicated operations team, this could lead to an overwhelming workload.
2. Seller Fulfilled Prime (SFP)
For those familiar with Fulfillment by Merchant (FBM) but seeking a competitive edge, Seller Fulfilled Prime (SFP) is an alternative that merits serious consideration. This program empowers sellers to offer Prime-eligible listings while managing order fulfillment from their own facilities.
To become eligible for SFP, sellers must meet certain performance metrics, including on-time delivery and order cancellation rates. Once part of SFP, a crucial benefit emerges:
Benefits of SFP:
- Lower Fulfillment Costs Compared to Amazon FBA: As sellers handle storage and order fulfillment, the costs associated with using Amazon’s fulfillment centers are eliminated.
- Potential for Faster Delivery to Customers in Certain Regions: If your warehouse is close to your main customer base, you might be able to offer faster delivery compared to Amazon FBA. This can result in improved customer satisfaction and potentially higher sales.
Challenges of SFP:
On the flip side, however, SFP does come with its set of challenges:
- Efficient inventory management: SFP demands efficient inventory management systems to ensure accurate stock levels and prevent overselling.
- Order processing speed: Meeting Prime service level agreements requires fast order processing and shipment preparation.
- Infrastructure and resources: SFP may require additional resources such as warehouse space, staff, and shipping carriers to handle increased order volume.
Key Features of Seller Fulfilled Prime (SFP)
A key distinction of SFP is its eligibility criteria. Sellers looking to join this program must demonstrate a track record of high performance and reliability. So, if you’re considering SFP as your Amazon FBA alternative, you’ll need to meet Amazon’s stringent requirements, which includes:
- A Late Shipment Rate below 4%
- An On-Time Delivery Rate above 97%
- An Order Cancellation Rate of less than 2.5%
- The ability to ship over 99% of your orders using Amazon Buy Shipping Services
- A return policy that equals Amazon’s
3. Partnering with a Third-party Logistics Provider (3PL)
Every ecommerce business has its own unique needs, and sellers need flexible and scalable solutions to fulfill their orders. One such solution is partnering with a Third-party Logistics Provider (3PL).
A 3PL is an outsourced service that handles all logistics-related operations, including inventory storage, order fulfillment, and shipping. This allows ecommerce businesses to focus on their core competencies, like product development and marketing, while leaving the logistics to experts.
Leveraging a 3PL: The Benefits
- Scalability: A 3PL can handle fluctuations in order volume and inventory levels throughout different seasons or promotional periods. This flexibility prevents overstocking or understocking issues and ensures smooth operations during peak sales times.
- Multiple Sales Channels Integration: Most 3PLs have integrations with various marketplaces and ecommerce platforms – not just Amazon. They can manage orders from multiple channels, providing a unified view of your business.
- Cost Savings: By pooling resources with other businesses using the same 3PL, you can take advantage of bulk shipping rates and lower storage costs.
- Expertise: 3PLs are experts in logistics and can navigate complex shipping regulations or international trade laws on your behalf.
Despite these advantages, it’s important to note that not all 3PLs are created equal. Some may specialize in certain product types or have better platform integrations. Therefore, when considering a 3PL partner for your ecommerce business, research, and review case studies to ensure they align with your specific needs and goals.
Whether your business chooses Fulfillment by Merchant (FBM), Seller Fulfilled Prime (SFP), or decides to partner with a Third-party Logistics Provider (3PL), finding the right fit depends on your business model, volume, product type, and long-term strategy.
Introducing One World Direct (OWD) – A Comprehensive Amazon FBA Alternative
One World Direct (OWD) is an order fulfillment company that can match Amazon’s fast shipping rates without exorbitant fees. We offer comprehensive fulfillment services for B2B and DTC businesses looking to offer two-day and even same-day shipping.
1. OWD Fulfillment Services
One of the main reasons why OWD stands out is its comprehensive fulfillment services. Our services cover everything from selecting and packing orders to product personalization using our proprietary personalized-to-consumer fulfillment.
Here’s what you can expect from OWD’s fulfillment services:
- Order picking: Accurate and efficient order picking keeps customers happy. OWD uses advanced technology and skilled workers to ensure orders are always picked correctly.
- Packing: OWD takes special care in packaging your products securely for transit. Using our robust order management technology, we’ll optimize shipping costs while still ensuring items are well-protected.
- Shipping: With three fulfillment centers strategically located throughout the United States, we offer 2-day shipping via ground methods nationwide. You pick the shipping method and we offer same-day fulfillment.
- Returns: We’ll handle all your reverse logistics needs. This includes pre-printed return labels and a variety of à la carte services, such as cleaning, apparel steaming and lint rolling, retagging, and electronics testing.
2. OWD International Shipping
One World Direct is a top ecommerce fulfillment solutions provider specializing in international logistics. As the global market continues to expand, it’s essential for sellers to partner with a fulfillment service that understands the complexities of cross-border ecommerce. OWD excels in this area, offering sellers the opportunity to reach customers around the world.
Benefits of OWD International Shipping
As an alternative to Amazon FBA, OWD offers comprehensive international shipping services tailored to the specific requirements of ecommerce businesses. Here’s why it’s advantageous to choose OWD for your global shipping needs:
1. Expert Guidance
Navigating customs regulations can be overwhelming, but with OWD, you have access to experts who are well-versed in compliance. This reduces the risk of shipment delays and penalties, ensuring a smooth transit for your products.
2. Flexible Pricing
OWD understands that cost-effectiveness is crucial for ecommerce businesses. That’s why their pricing structure is transparent and flexible, based on factors like package size, weight, and delivery timelines. Optimize your shipping expenses without compromising service quality and take advantage of our competitive rates.
3. Transparent Duty and Tax Management
OWD offers comprehensive tools and expert guidance to help you navigate the complexities of international duties and taxes. Use the landed cost calculator to accurately estimate import fees based on product details and destination country. Additionally, OWD recommends utilizing their Delivered Duty Paid (DDP) service, where they handle all duties and taxes upfront, providing a transparent total cost to your customers and eliminating unexpected fees at delivery.
By utilizing One World Direct’s fulfillment services and international shipping expertise, you can tap into a powerful system designed to expand your presence in global markets while maintaining control over expenses and customer satisfaction.
3. OWD Call Center and Customer Support
Storing, processing, and shipping goods isn’t the only part of the fulfillment process. Customer may need to make returns or have questions about their order. Fortunately, we have a call center integrated with our fulfillment network to deliver great customer service through calls, emails, and chats.
One World Direct’s Contact Center:
- Multiple Communication Channels: Phone calls, emails, and web chat are available to cater to diverse customer preferences.
- Extended Hours of Operation: The contact center operates 14 hours daily from Monday to Friday, ensuring comprehensive coverage for inquiries during regular business hours. On Saturdays, we offer shorter support hours to accommodate weekend needs, while remaining closed on Sundays to allow our team to recharge.
- American English-speaking Agents: Skilled career agents engage customers with a warm and professional tone.
- Inbound Sales and Service Contacts: Responsive support that helps with both pre-sale inquiries and post-sale service issues.
- Custom Solutions: Including a personalized phone number and custom email support tailored to your brand.
The services offered at OWD’s contact center are not just about solving problems but about building customer relationships that create trust and loyalty. With a focus on providing top-notch support, OWD ensures smooth interaction at every point of contact. This commitment extends across various operations such as virtual assistance or direct calls with US agents.
In summary, by choosing One World Direct for ecommerce fulfillment needs, you get a range of services beyond logistics to provide exceptional customer care. This comprehensive approach ensures the efficient delivery of products and establishes a strong basis for customer satisfaction and brand loyalty.
4. OWD Returns Service
A smooth and efficient returns process is crucial for successful ecommerce operations. We understand this and offer a complete returns management solution.
How OWD’s Returns Service Works
Unlike Amazon FBA, where sellers often have limited control and visibility over returns, OWD prioritizes transparency and flexibility for sellers. Here’s how their returns service works:
- Preparation: OWD handles all the necessary preparations for returns, including printing and distributing return labels to customers.
- Inspection: When items are returned, OWD’s professional team conducts thorough quality control inspections to ensure they are in good condition.
- Repackaging: If needed, OWD will re-bag and re-tag the items to be ready to be restocked.
- Return to Stock: Finally, OWD takes care of returning the items to stock, making them available for sale again.
Benefits of OWD’s Returns Service
- Everything is taken care of: OWD’s all-inclusive service covers every aspect of the returns process, saving sellers time and effort.
- Pricing transparency: OWD values transparency in pricing for our standard fulfillment services, and additional services like cleaning or apparel steaming also have clear pricing.
- Refund assistance: Sellers can utilize OWD’s call center and virtual assistants to facilitate refunds and exchanges, providing support for a seamless customer experience.
Partner with OWD to Lower Fulfillment Costs and Integrate our P2C Plugin
The world of online selling is always changing, and Amazon FBA’s policies and fees are pushing sellers to find better ways to fulfill orders. It’s no longer enough to rely on just one method – sellers need to diversify their fulfillment strategies to grow and stay strong.
By working with an experienced partner like One World Direct, sellers can smoothly transition away from relying solely on Amazon FBA. We offer tailored solutions such as complete fulfillment services, efficient returns management, and support for selling on multiple channels. We also offer Personalized-to-Consumer (P2C) fulfillment services, an innovative new offering that allows customers to personalize products with custom engravings, embroidery, and direct-to-object printing. With these alternatives, sellers can overcome the challenges of online selling today and set themselves up for long-term success.
Get in touch with a fulfillment specialist and we’ll gameplan a custom package to help you lower fulfillment costs and deliver service comparable to Amazon FBA.
