Exploring the Best Amazon FBA Alternatives for Sellers in 2023
A fulfillment company handles crucial customer order processes for businesses, including receiving, packing, delivering, and managing returns. Outsourcing these tasks enables businesses to focus on growth instead of in-house logistics. These companies leverage advanced software to streamline their operations. Businesses opt for fulfillment services to enhance inventory management, deliver superior customer experiences through efficient shipping and returns, and rapidly expand to meet increasing demand and explore new markets.
While Amazon FBA is a popular choice due to its swift delivery, its strict guidelines may not suit all companies, making alternatives valuable. This article focuses on fulfillment partners in North America. Upon request, we can feature articles exploring partners in other countries as well. To discuss other fulfillment options and their advantages, it’s essential to first understand Amazon FBA and why having alternatives can be beneficial.
What is Amazon Fulfillment?
Amazon’s Fulfillment by Amazon (FBA) service is a valuable resource for third-party sellers looking to streamline their order fulfillment and shipping processes. It simplifies the seller’s role in selling, while Amazon takes care of the rest.
While most are aware of Amazon’s collaboration with third-party sellers, the extent of this partnership may be surprising. Over half of all units sold on Amazon are products from third-party sellers, with an impressive 73% utilizing FBA.
How Does Fulfillment by Amazon Work?
Enrollees in an Amazon seller account can delegate shipping, warehousing, returns, and more to Amazon. Sellers send their products to Amazon, and Amazon manages the logistics as long as you keep the sales flowing. Below is a step-by-step breakdown of the process.
Step 1: FBA Setup
Begin by creating your Amazon selling account and access Seller Central. Within Seller Central, you’ll set up FBA. Here, you can also assess FBA costs and estimate expenses for each product you plan to enroll in the program.
Step 2: Create Product Listings
Add your products to the Amazon catalog and specify them as FBA inventory. This step is crucial for seamless integration into the FBA program.
Step 3: Product Preparation
Before shipment, ensure your products are prepared safely and securely, adhering to Amazon’s packing guidelines and shipping requirements. This helps guarantee the smooth flow of the fulfillment process.
Step 4: Shipping to Amazon
Create a shipping plan, generate Amazon shipment ID labels, and dispatch your products to Amazon’s fulfillment centers. Further details on inventory shipment can be found on Amazon’s platform.
Logistics of Amazon FBA Fulfillment
Before diving into Amazon FBA, it’s crucial to consider potential costs.
- Dangerous vs. Non-Dangerous Goods – Your product category, whether hazardous or non-hazardous, significantly impacts fulfillment and storage costs
- Fulfillment Fees – Charges for services such as picking, packing, shipping, handling, and customer service, are determined by product dimensions
- Inventory Storage Fees – These monthly fees vary depending on the time of year and the volume of storage space your inventory occupies
- Long-Term Storage Fees – If your inventory remains in a fulfillment center for over a year, a monthly fee applies
- Inventory Health Report – A detailed Amazon-generated report aids sellers in optimizing their inventory and reducing costs
Benefits of Amazon FBA
While not an exhaustive list, below are some notable advantages of Amazon FBA.
- Logistics Support and Scalability – Amazon handles packing, shipping, and customer service, relieving sellers of these responsibilities
- Amazon Prime Benefits – FBA products are Prime eligible, offering free shipping and boosting visibility
- Access to the Buy Box – FBA sellers gain access to the coveted Buy Box, crucial for maximizing sales
- Shipping Discounts – Leveraging Amazon’s vast network leads to cost-effective shipping solutions
- 24/7 Customer Support – Amazon offers continuous customer service, and FBA helps streamline customer support management
- Ample Storage Space – FBA provides unlimited storage space in Amazon’s vast network of warehouses
- Multi-Channel Fulfillment – Sellers can expand their reach beyond Amazon and utilize multi-channel fulfillment, such as BigCommerce and eBay.
Why Should Companies Know the Alternatives to Amazon FBA?
Amazon FBA may not be suitable for all businesses for the multiple reasons.
- Brand Identity Challenges – Amazon FBA enforces strict packaging standards that prominently feature Amazon’s branding on delivered orders. This may not align with retailers aiming to emphasize their own brand identity. Exploring alternative solutions allows retailers to showcase their unique brand rather than Amazon’s well-known name.
- Complex Payment Structure – Amazon FBA’s payment structure can be intricate, particularly for newcomers. It involves various types of fees, including fixed, variable, and situational charges. These encompass seller fees, fulfillment fees, and storage fees, which can fluctuate due to factors like seasons and special events. Penalties for minor infractions can add to the complexity. Retailers who prefer straightforward and transparent payment plans often turn to FBA alternatives.
- Consolidated Inventory – Amazon FBA frequently stores similar items from multiple sellers in shared locations within their warehouses. This increases the risk of shipping incorrect products, potentially leading to customer dissatisfaction and brand damage. Retailers seeking dedicated storage space for their entire product range may benefit from exploring alternatives.
- Limited Inventory Control – Amazon FBA limits retailers’ control over inventory management. Adding or removing products can be challenging, and penalties for extended storage durations make it difficult to adjust inventory according to market demand. Retailers desiring greater flexibility and strategic control over their inventory may find alternatives more appealing.
- Rigid FBA Preparation Guidelines – Amazon’s stringent product preparation guidelines, while beneficial for consumers, can be cumbersome for retailers. Compliance with packaging, labeling, and safety standards can incur additional expenses and storage costs. For instance, the Amazon Standard Identification Number System (ASIN) necessitates separate labeling and shipment splitting for each product sent to an FBA warehouse. Retailers looking to avoid these demanding requirements and potential penalties often explore alternatives to Amazon FBA.
Top Amazon FBA Alternatives
FedEx is a well-known global eCommerce company that offers a wide range of fulfillment solutions and shipping services. It was founded in 1971 and is headquartered in Memphis, Tennessee.
With a presence in over 220 countries, FedEx provides eCommerce retailers with various features to streamline their operations. One notable feature is the ability to synchronize order details and inventory lists from multiple selling platforms into a single, convenient location. FedEx has extensive experience in eCommerce fulfillment and excels at efficiently managing various tasks.
FedEx’s focus on fast delivery, efficient returns management, extensive fulfillment network, user-friendly technology platform, eCommerce marketplace integrations, and global service coverage make it a strong competitor to Amazon FBA. eCommerce businesses looking for reliable and comprehensive fulfillment services can trust FedEx to meet their needs.
FedEx is excellent for high-volume businesses selling small, lightweight products.
ShipMonk is an eCommerce fulfillment company headquartered in Fort Lauderdale, Florida. Since its establishment in 2014, it has rapidly grown and gained recognition in the industry.
ShipMonk focuses on providing tech-based eCommerce services to retailers across various industries. They offer a wide range of services, including packing, pick and pack operations, warehouse management, and customer support. Each customer receives dedicated account managers to assist them during the onboarding process.
ShipMonk’s focus on technology-driven eCommerce services, comprehensive offerings, dedicated account management, digital billing portal, warehouse automation, branding options, competitive pricing, and favorable fee structure make it a top alternative to Amazon FBA. It is an ideal choice for online sellers seeking efficient and customizable fulfillment solutions. ShipMonk is excellent for businesses that use Seller Fulfilled Prime.
Founded in July 2017, Deliverr is a US-based e-commerce fulfillment company dedicated to providing fast and cost-effective fulfillment services that rival Amazon. Their goal is to enable sellers of any size to impress their customers with efficient order fulfillment.
Getting started with Deliverr is quick and straightforward. Sellers can easily sign up by connecting their listing tool and/or shopping cart. This allows them to see cost previews for each item they sell. Sellers then send their inventory to one of Deliverr’s warehouses, where they receive step-by-step support and discounted shipping rates. Within just 5-10 days of signing up, sellers can start selling their products.
Deliverr adopts an “Amazon-like” pricing structure. All fulfillment-related costs, such as shipping, pick, pack, and box, are consolidated into two fees: Fulfillment and Storage. Sellers can accurately calculate their costs using Deliverr’s calculator tool. Deliverr is excellent for small businesses.
The Differing Criteria of Fulfillment Partners
|Alternatives to Amazon FBA
|Fast Delivery and Returns Management
|Digital Billing Portal
|FedEx is renowned for its emphasis on swift delivery and efficient returns management. This focus ensures customer satisfaction and helps retailers maintain a positive reputation.
|ShipMonk offers a user-friendly digital billing portal that enhances transparency and simplifies financial transactions for businesses.
|Deliverr offers sellers the flexibility to outsource their fulfillment needs without being tied to long-term commitments. This provides the freedom to utilize Deliverr’s services as required.
|Extensive Fulfillment Network
|FedEx boasts an extensive fulfillment network, providing businesses with widespread coverage and delivery capabilities. Whether you’re a small or large enterprise, FedEx can accommodate your fulfillment needs effectively.
|ShipMonk optimizes operational efficiency through warehouse automation technologies. These automation solutions improve processes, enhance productivity, and contribute to a streamlined fulfillment experience.
|Deliverr stands out with its fast delivery options, including Premium Shipping with 1-day and 2-day rates. Moreover, sellers can leverage Prime badges for their listings, enhancing visibility and appealing to customers seeking swift delivery.
|User-Friendly Technology Platform
|FedEx provides retailers with an intuitive technology platform that simplifies fulfillment processes. This platform is designed for ease of management, allowing businesses to navigate their fulfillment operations efficiently.
|ShipMonk offers a range of branding and customization services, empowering retailers to personalize their packaging and order fulfillment to align with their unique brand identity. This level of customization can greatly enhance the customer experience.
|Deliverr offers a transparent pricing structure, ensuring sellers have a clear view of fulfillment costs associated with each order. There are no hidden fees or unexpected charges, promoting financial predictability for retailers.
|Integration with eCommerce Marketplaces
|FedEx seamlessly integrates with a variety of eCommerce marketplaces, streamlining operations for retailers who sell across multiple platforms. This integration simplifies order processing and helps businesses efficiently manage their online presence.
|ShipMonk enhances the financial aspect of fulfillment with its digital billing portal. This tool ensures transparency and simplifies the financial aspects of order fulfillment. Retailers can easily manage billing and payments within the ShipMonk platform.
|Deliverr offers sellers the flexibility to fulfill orders without being bound by long-term commitments. This adaptability allows retailers to utilize Deliverr’s services as needed, making it a convenient solution for various business models.
|Global Service Network
|FedEx leverages its extensive global service network to offer comprehensive fulfillment services in multiple countries. This makes FedEx a suitable choice for businesses with international fulfillment needs, as it can provide a seamless and reliable experience across borders.
|ShipMonk offers pricing benefits and tax advantages for retailers. These advantages include reduced pricing for bulk orders, which can be particularly appealing to businesses with high shipping volumes. Additionally, ShipMonk provides tax benefits that help optimize costs for retailers.
|Deliverr does not impose any setup or inventory-receiving fees, providing a cost-effective solution for customers. This approach can be particularly advantageous for businesses looking to minimize upfront expenses and improve their bottom line.
Look Out for Reliable Returns
Online clothing stores face a big challenge with returns, more than other industries. According to Shopify, studies show that about 25% to 40% of clothes bought online end up being sent back. This happens because people often buy different sizes or colors with the plan to return what doesn’t fit or look good. A survey found that 58% of people do this, mainly because of fit, size, or color issues.
To deal with this, clothing sellers can do a few things. They should give clear size charts, better pictures and videos, and use technology for at-home try-ons. But remember, returns will always happen. So, it’s important to have a good system for handling returned items, called “reverse logistics.”
The partner who helps with shipping plays a big role here. Look for a Third-Party Logistics (3PL) provider that takes back returned items and follows your rules for handling them, whether that’s putting them back in stock or getting rid of them. If you work with the right partner, it can lead to happy customers who will come back to shop more. In fact, 77% of shoppers who have a good experience returning things to a store say they’ll come back to shop more.
E-Marketplace.com is a vital resource in the dynamic world of multi-channel commerce. It assists individuals, businesses, and organizations in navigating the complexities of contemporary multi-channel commerce. Expertise spans various sectors, including retailers, wholesalers, brands, virtual events, digital transformation initiatives, and e-marketplace operators.
For retailers, E-Marketplace.com specializes in developing multi-channel presences, optimizing delivery systems, and streamlining supply chains for a comprehensive sales and marketing strategy. Wholesalers benefit from guidance in establishing cost-effective sales channels that reach global markets.
Brands looking to expand their marketing strategies beyond websites and social media platforms can rely on E-Marketplace.com for enhanced market reach and profitability. It offers solutions for scalable platforms to expand global reach, reduce costs, and enhance customer satisfaction.
E-Marketplace.com also extends its expertise to e-marketplace operators. Their skill set includes branding, e-commerce, virtual events, customer engagement, and more.
E-Marketplace.com addresses the pressing challenges of today’s multi-channel business landscape. Whether you’re a retailer, wholesaler, brand, or e-marketplace operator, E-Marketplace.com is your partner in thriving in the world of multi-channel commerce.
In conclusion, understanding alternatives to Amazon’s FBA is crucial for businesses in today’s multi-channel commerce landscape. While Amazon FBA offers several advantages, such as logistics support, Amazon Prime benefits, and access to the Buy Box, it may not be suitable for all businesses due to challenges related to brand identity, complex payment structures, consolidated inventory, limited inventory control, and rigid preparation guidelines.
Exploring alternatives like FedEx, ShipMonk, and Deliverr offers businesses the opportunity to tailor their fulfillment processes to their unique needs. Each of these alternatives comes with distinct advantages, including fast delivery and returns management, user-friendly technology platforms, and flexible contracts, making them viable choices for businesses of all sizes.
To make informed decisions and stay competitive, businesses must carefully evaluate their fulfillment options, assess the specific needs of their operations, and choose the alternative that aligns best with their goals. Whether it’s Amazon FBA, FedEx, ShipMonk, Deliverr, or other alternatives, the key is to focus on growth, cost-effectiveness, and customer satisfaction in today’s rapidly evolving e-commerce landscape.