FBA | FBM | E-Commerce | Fulfillment
Amazon is the No. 1 sales channel for numerous brands. Fulfillment by Amazon (FBA) is the perfect solution, especially for fast-growing companies that do not have the time to set up their own structures for shipping, customer service and returns. In this way, sellers can achieve high sales figures with minimal operational effort.
However, due to the FBA price adjustments just announced, rethinking the convenient FBA fulfillment strategy makes sense. This is because a new capacity limit will be introduced from March 1. Furthermore, additional warehouse space will then be auctioned off among the highest bidders. Anyone who then bids too little will be left empty-handed. Many retailers find this an imposition.
So it's time to look at alternatives. Many FBA sellers have already taken a sideways glance at the alternative "Fulfillment by Merchant" (FBM). The latter is usually much cheaper than the Amazon full service, but also has disadvantages. For example, the items of FBM sellers are no longer marked as "Prime products" with fast delivery times and the probability of being displayed in the Buy Box is greater for FBA than for FBM sellers, because this is where how quickly, cheaply and reliably the delivery reaches the customer flows in. Since about 90% of all Amazon purchases are made through the Buy Box, placement here is an absolute must.
The Seller-Fulfilled-Prime-Program (SFP) might therefore be the most exciting option within FBM for most merchants: sellers can participate in Prime-Shipping here while handling their logistics via an external fulfillment service provider, as long as the latter allows 2-day deliveries at no additional cost for Prime subscribers. For this, however, sellers must complete a trial period and prove that they meet FBA performance standards. Ergo, merchants who go this route need a reliable logistics partner, otherwise they risk losing their SFP status.
The change from the FBA seller to the SFP program is a tedious and error-prone undertaking without existing logistics structures, suitable processes and interfaces for retailers. Because the exit from the FBA service does not simply mean setting up your own parcel service, but those who go this route must also cover customer service and returns management on their own or with a service provider.
This is also the reason why the majority of retailers continue to rely on FBA despite high costs. Because there are currently only a few available holistic solutions that are just as convenient for merchants and guarantee the same quality as Amazon Fulfillment. Only when merchants can use an out-of-the-box plug-and-play solution that covers the FBA service portfolio and guarantees that all processes run smoothly will Fulfillment by Amazon no longer be without alternative. That's why PVS Europe is currently working on a holistic FBA alternative that will allow our customers to flexibly change their Amazon setup after a quick onboarding. Our goal: With the help of customized PVS complete solutions consisting of customer care, IT and fulfillment services, we make our clients independent of the FBA program without them having to adapt or invest in their own structures.
In this context, we are interested in your ideas. What challenges do you face in your day-to-day FBA or FBM operations? Where do you need support? I look forward to your input.
Your Jan Felix Topp janfelix.topp@pvs-europe.com