FBA Onsite: Fulfillment by Amazon Without Storage Fees
by Arpita D. S.E.OAmazon’s FBA Onsite will change the structure of FBA fulfillment
fees to not include long-term storage, and will instead entrust storing
inventory to third-party logistics companies or seller storage.
FBA
Onsite is the latest incentive Amazon has rolled out for its
current and future third-party sellers looking for a more affordable way to use
Amazon FBA logistics without storage fees. The new Amazon program looks to
streamline shipping and delivery services for vendors while also convincing
more sellers to use Amazon services.
This new Amazon FBA program is a simplified hybrid version of
SFP and FBA in an attempt to convert more sellers who prefer to have lower
fulfillment costs. Onsite was created for sellers who have previously avoided
either program due to hefty fees from Amazon’s fulfillment centers for FBA
inventory long-term storage.
However, Amazon Onsite should not be confused with Multi-Channel
Fulfillment, another progressive fulfillment program by Amazon. This
program instead still stores FBA inventory in Amazon warehouses but will
fulfill orders made outside of Amazon on other channels such as your own
website. Storage fees still apply for inventory held at Amazon fulfillment
centers.
Amazon claims that Onsite will save participants more time and
money by limiting Amazon’s fulfillment services to just the pickup and delivery
of a seller’s inventory.
In many ways, FBA Onsite is the bigger, better
extension of Seller Flex, which Amazon
tested last year during its brief west coast trial.
The key feature of FBA Onsite is the removal of using Amazon’s
warehouses to store FBA products, which cuts shipment costs and shortens
delivery time.
A significant difference between FBA Onsite and standard Amazon
FBA is the division of customer service. Sellers can store their products at
their own location(s) instead of fulfillment centers and remain in control of
their inventory. Additionally, instead of fulfilling their product orders
themselves, sellers let Amazon do the heavy-lifting—literally.
Under the new program, Amazon will pick up packages from a
seller’s storage location and choose the best way to fulfill the
orders. Amazon will opt to use its own logistical
network to deliver the packages directly to customers or
use third-party delivery services like
UPS, FedEx, or other independent companies.
FBA Onsite appears to be faster,
cheaper, and simpler than similar logistical models and offers
enough perks to entice new and current sellers. Some of the perks of the
program include:
§ Eliminating the need
for products to be shipped to an Amazon warehouse for FBA storage,
reducing a seller’s costs for storage
§ Removes storage fees
and cuts inbound shipping costs by 70% according to Business Insider
§ Simplifies inventory
and logistics by giving sellers more control over their inventory for more
efficient restocking
and removal, but lets Amazon manage the nuts and
bolts of fulfillment and customer service
§ Gives vendors access
to Prime and other
services like Subscribe and Save, and Small and Light (previously FBA-exclusive)
Something sellers should be aware of with FBA
Onsite is the loss of control related to shipping and delivery
logistics. However, for sellers who’ve struggled with delivery
issues, Amazon’s involvement lightens their load and provides a
more direct line of responsibility should something go wrong during the
delivery process. With the logistics
handled, sellers can concentrate more time and
energy on growing their businesses.
For Amazon, the FBA Onsite option means less overcrowded
warehouses,
more merchants with Prime-eligible products, and a
chance to solidify its brand value through
its reliable signature service. It should be noted though
that if sellers want to sell internationally using FBA Onsite, they will have
to have storage facilities of their own in the countries for which they want to
have Prime-eligible service.
In December 2017, Amazon invited a select group of roughly
50 sellers to test out the new system. Details leaked by
one vendor suggested a beta version with specifics that also included inventory
set-up, free inventory receipt and removal, nationwide Prime services
at a flat rate, Prime eligibility for Hazmat inventory, and
same-day shipping.
Though its success is too early to tell, and Amazon
remains tight-lipped in reports, seller forums are abuzz with curiosity and
excitement for FBA Onsite. Both current FBA and non-FBA sellers want the
same things: faster, cheaper, and more efficient alternatives.
If you are thinking about using Amazon Online for delivering
products after sales, you should know what kind of FBA fees you may be facing.
Helium 10 offers the Profitability Calculator tool in the Helium 10 Chrome extension, an
FBA calculator that offers valuable information about individual ASINs to measure
their profitability.
One of these metrics is the FBA fee calculator option that makes
an accurate estimation of the FBA fees you will pay per unit for storage at
Amazon fulfillment centers. You can also figure shipping fees based on product
dimensions, the referral fee, and the possible ROI after fees and sales tax.
LEARN MORE ABOUT HELIUM
10 CHROME EXTENSION
While the rest of us wait on Amazon’s own delivery fleets and drones to draw us into the game, Amazon third-party sellers can look forward to a more beneficial option that gives them the logistical advantages of Amazon FBA for less money.
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Created on Jul 23rd 2019 13:00. Viewed 591 times.