Amazon has dominated the ecommerce marketplace for the last two decades, providing a marketplace for sellers to sell their products and operate one the largest retailers in the world, buying products at wholesale prices and selling them to their massive audience. Normally, Amazon would provide a safe haven for struggling retailers and sellers as they provide a massive audience of shoppers and a turnkey sales and fulfillment platform. However, with the COVID-19 crisis, Amazon has had to abruptly change their strategy which has negatively impacted a lot of their sellers and companies they buy from.
Amazon recently announced that they will be temporarily prioritizing inbound shipments of household staples, medical supplies, and other high demand products for both Amazon Seller and Vendor Central which has led to a lot of Amazon sellers scrambling to find alternative sales and fulfillment options. To put it more succinctly, Amazon has stopped buying products they normally buy from sellers and are limiting the products they fulfill on behalf of sellers.
As many Amazon FBA sellers are impacted by Amazon’s recent changes due to the COVID-19 situation, here are some FBA alternatives to help sellers during these uncertain times.
Alternative to FBA #1: Seller Fulfilled Prime or Merchant Fulfilled Network
Both Seller Fulfilled Prime (SFP) and Merchant Fulfilled Network (MFN) are part of the Seller Central program in which the seller owns, markets, and sells their products on Amazon. The biggest differences between these two options and Fulfilled by Amazon is that the seller is responsible for fulfilling their own orders.
MFN is when sellers ship and manage their own products from their facilities or 3PL partner when an order is placed on Amazon. Sellers are responsible for stocking and storing their own inventory, fulfilling their own orders, managing returns, and working directly with the customer. MFN sellers do not get the Prime badge next to their listings on Amazon.
Seller Fulfilled Prime allows the Amazon seller to list their products as Prime-eligible and ship their products to their customers directly via their own warehouse or from a qualified third party logistics company (3PL). Sellers can display the Amazon Prime badge on the products they ship directly to the customers with two-day shipping and free standard shipping. Read more about the advantages of Seller Fulfilled Prime.
By opting to use SFP or MFN, sellers can use their Amazon storefront to sell their products, but do not have to rely on Amazon fulfilling their orders. Selecting the right Amazon Seller Central option can be daunting, but there are plenty of resources to help sellers pick the one that makes the most sense for them. This gives sellers a lot more flexibility in terms of managing their own inventory. It relieves the uncertainty of being beholden to Amazon’s timeline, when they will accept new inventory into their new facility.
Alternative to FBA #2: Expand to other ecommerce marketplaces
While Amazon has the largest online shopping community with a 38% share of the US ecommerce market, there are a number of large, growing marketplaces. EBay and Walmart are notable, established ecommerce platforms that have invested heavily recently in their own marketplaces to provide a platform for sellers.
Last Fall, Walmart launched the Walmart Fulfillment Services (WFS) with their first fulfillment facility in Kentucky for third-party sellers. When a customer places an order on Walmart.com with a 3rd party seller, WFS picks, packs, and ships those items directly to the customer on behalf of the seller. Walmart has a lot of ground to make it if it wants to catch Amazon, owning a 5% market share, but they have resources and physical assets to make an impact.
Expanding to other marketplaces like Ebay and Walmart allows you to tap into an audience of new buyers, further diversifying your buying pool. Most of these marketplaces require the sellers to pick, pack, and ship, with the exception of Walmart’s new WMS program, so it’s something the seller has to consider when choosing this route.
Alternative to FBA #3: Use a 3PL
In the two previous scenarios, a 3PL can be used to store, pick, pack, and ship sellers products. Going the 3PL route allows the seller to outsource some, if not all, of their fulfillment and logistics needs. Some 3PL companies also provide other logistics services, referred to as value added services. These include inventory management, kitting and assembly, postponement packaging, and others.
A 3PL can be used to either support a seller’s fulfillment needs for sales from an ecommerce marketplace, including Amazon, Walmart, and Ebay. However, one of the biggest advantages is that a 3PL can support a seller’s own website storefronts. These storefronts are powered by shopping platforms like Shopify, BigCommerce, and WooCommerce. Sellers can own the entire sales experience from start to finish.
Ultimately, using a 3PL can provide a lot more flexibility than Amazon FBA. Experienced 3PLs should be able to easily integrate with most 3rd party shopping platforms or ERPs and provide the operational expertise to provide sellers with a turnkey solution. A good 3PL can adapt to the ebbs and flows of a sellers’ needs without sacrificing speed or quality.
The COVID-19 epidemic has put a huge strain on the global supply chain, including behemoths like Amazon. It’s during these times that sellers need to adapt quickly to meet their buyer’s needs. With some of the recent limitations and restrictions of the Amazon FBA program, it’s put a strain on sellers’ ability to conduct their business. The good thing is that there are a lot of great FBA alternatives to help sellers in these arduous times.
If you are in need of operations or logistics support, especially in this sensitive time, please reach out. The DCL team has a robust network of resources and partner companies.