For years Amazon set the standard for order fulfillment. It is the choice for many startups and established companies selling online. Its portal is makes it easy to do business. On time delivery and low shipping rates are key to its success not to mention the exposure the products listed have. When selling on Amazon, your website gets a great boost when it comes to ranking on search engines.
Why Use Amazon?
- One Important reason for using Amazon for E-commerce fulfillment is that the third party seller’s website will rank a lot better on search engines and increase visibility of the company on the internet. Customers can then buy products from the website that are not even listed on Amazon. Most searches for products are performed on Amazon, not Google. If you are looking for exercise mats for example, your first choice is not Google any more. You can pay to have your products show up ahead of the competition and you can showcase your products. Better exposure, more sales.
- As a startup or small business, you have limited capital to rent a warehouse, and pay employees. Amazon is the perfect place to go to for your fulfillment need especial FBA (Fulfillment By Amazon). They take the guesswork out of warehousing, packing and shipping.
- Low shipping rates. With its huge shipping volume, they enjoy the lowest shipping rates domestically but not internationally. This is a great help to third party sellers. It gives an edge over those who do not sell on Amazon.
- Efficient processing or orders. Orders are usually shipped on time, you can track them and run all sorts of analytics helping you sell online by focusing on your core competencies.
What are the Alternatives
Working with Amazon Fulfillment is not for everyone for various reasons.
- The cost of doing business is very high. The fees that they charge are high and will eventually add up to where it might be necessary to have your own warehouse. You might keep a few products with Amazon but sell mainly on your own e-commerce website in order to protect your ranking, we have been seeing such a trend with many third party sellers.
- Third party sellers are at the mercy of Amazon, they can replicate your product and sell the copied item on their own portal ranking ahead of your own products. This is unhealthy competition. Many countries including the U.S. are looking into these practices.
- If your brand sells well on their portal, they can take it away from you by paying you a small amount. Please read your contract carefully to understand this matter.
- Frequent errors in inventory count. Speaking with many sellers, they have complained about huge and numerous in inventory count and returns by Amazon.
- If any of your products do not sell well or do not meet their criteria, they will pack it and ship it to you. You have no say in the matter, creating a strain on you.
The bottom line is that working with Amazon is could be costly and you have better alternative with other companies that do not monopolize the market and promote unhealthy competition. Recently, Shopify, the e-commerce software company started forming alliances with various Fulfillment Warehouse in order to offer services similar to Amazon at lower costs. Amazon has failed to fulfill its obligations during the pandemic and did not ship many of the orders for not hygienic products. This hurt the bottom line of many small businesses. These businesses had to look for other options to fulfill their obligations and they did. Also, customers who could not get their products through Amazon, searched for their products from regional retailers or other online sellers who do not use Amazon. Third Party sellers are looking for alternatives. One such alternative is International 3PL located in Miami.