How many times has a brown cardboard box with that black and blue logo shown up on your doorstep, yet you have little recollection why or what you may have ordered? For many people, the answer is often. This confusion is a symptom of Amazonesia, the inability to remember what you ordered on Amazon two days ago when it arrives at your door. The condition of Amazonesia has become pervasive because of the ease of access to items on Amazon, quick shipping with Prime, and the multitude of ways that Amazon can work with merchants to sell their products. How can merchants leverage the many possibilities offered by Amazon? To break it down in a logical approach, we can consider four different ways a merchant can interact with Amazon: selling on Amazon, selling to Amazon, using Amazon for multi-channel fulfillment / 3PL, and using Amazon as a carrier.
Selling on Amazon
The first and probably most common way of using Amazon as a merchant is selling your products on the platform. There are a few different options for selling on Amazon, depending on your business operations and how much control you would like to have over logistics.
Seller Fulfilled Prime (SFP)
The Amazon Seller Fulfilled Prime (SFP) program allows sellers to ship directly from their own warehouses to domestic Prime customers, either through their own fulfillment processes or with a 3PL partner.
Seller Fulfilled Prime may be best for you if you sell high-value, slow-moving items, seasonal items or inventory that requires special handling. SFP benefits include seller reputation boost with the Prime badge, access to 24/7 customer service, and increased inventory control. However, SFP requires a multitude of Amazon requirements first be met, including an on-time delivery rate of at least 93.5%.
With Seller Fulfilled Prime (SFP), merchants can use ShipHawk to book, pick, pack, label, and ship, where the labels are coming from Amazon Buy Shipping, which is integrated with ShipHawk. For more information on how to maximize your Amazon presence with Seller Fulfilled Prime, see Maximize Your Amazon Presence with Seller Fulfilled Prime.
Fulfilled by Amazon (FBA) vs Fulfilled by Merchant (FBM)
The other options for selling to Amazon are Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM), two similar services but with different logistics and fulfillment processes.
When using FBA, sellers send their products directly to Amazon’s warehouses, where Amazon takes full responsibility for all logistics, including storing, packing and shipping the products to the end customer. Amazon also handles all customer service and returns, making for a seamless and easy experience for the seller. FBA can be a preferred method because products fulfilled by Amazon are often eligible for Amazon Prime, which can increase visibility and sales due to Prime’s fast shipping and other benefits.
With FBM, Amazon lists the seller’s items for purchase, but the fulfillment process is done by the merchant. Sellers are responsible for inventory storage, as well as picking, packing, and shipping all orders. When using FBM, you are able to have more control over your customer’s experience with customized packaging options, as well as closer management of your own inventory. Because Amazon FBM is less expensive, fulfilling your own orders in a cheaper way could also result in a higher profit margin.
ShipHawk can help you with these logistics with a more comprehensive software package that helps you keep control of your business and inventory. ShipHawk can also be used in conjunction with FBM by using Amazon to list your products but automating the fulfillment process with ShipHawk’s algorithms. See Navigating Amazon Fulfillment: Is FBA or FBM Better for Your Business? for an in-depth comparison of these two services and their pros and cons.
Selling to Amazon
A second way that you may interact with Amazon is by selling your items to them, which are then owned by Amazon and can be rebranded and sold as AmazonBasics, Amazon Essentials, or other brands. There are two different ways that you can get your items to the end customer.
Amazon Transportation Services (ATS)
Amazon Transportation is a network of transportation service providers that Amazon contracts with to provide transportation and logistics services, including carriers such as trucking companies. As a merchant, you would use ATS to ship your products to an Amazon warehouse.
Amazon Transportation, which is integrated with ShipHawk, specifies the shipping method and carrier to use when shipping to an Amazon warehouse or fulfillment center. The shipping method/carrier service could be FedEx, UPS, Amazon Shipping, or other carriers from within the ATS network of transportation service providers.
ShipHawk is integrated with Amazon Transportation to create a shipping order with Amazon Transportation, get the shipping label, and ship the order to an Amazon Fulfillment Center. To understand all about how you can leverage Amazon Transportation, see Amazon Transportation 101.
Amazon Direct Fulfillment
With Amazon Direct Fulfillment, as an Amazon Vendor Central seller, you can fulfill orders (made on Amazon by consumers) from your own warehouse (or 3PL) if Amazon itself runs out of stock of your products. However, you must use Amazon Transportation Services (ATS) to ship your products directly to the consumer. ATS is fully integrated with ShipHawk, so you can use ShipHawk to book with Amazon Transportation, where the destination is the end customer. Learn more about Amazon Direct Fulfillment with Your Step-by-Step Guide to Amazon Direct Fulfillment.
Using Amazon for Multi-Channel Fulfillment / 3PL
Merchants can also use Amazon as a third-party logistics provider to outsource their fulfillment processes.
Amazon Multi-Channel Fulfillment (MCF) is a third-party logistics (3PL) provider that allows businesses to ship their items from multiple eCommerce channels with one service. Amazon stores the merchant’s items in Amazon warehouses and fulfills the order when placed.
With ShipHawk, automated shipping software can help you fulfill a range of orders on your own, offering the security to try out new services like FBA or Amazon MCF while still maintaining one unified system for rating and shipping information. See How Best to Use Amazon Multi-Channel Fulfillment to learn more.
Using Amazon as a Carrier
The final way that Amazon can be used by a merchant is for their carrier service, Amazon Shipping.
Amazon Shipping is a carrier service offered for both products sold on Amazon as well as other eCommerce sites and channels. Through the Amazon Shipping service, a merchant typically sells an item on their own website or through another shopping platform, purchases a shipping label and schedules a pickup with Amazon Shipping. Amazon then collects the item and delivers it to the customer with tracking information provided along the way.
The carrier Amazon Shipping is integrated with ShipHawk, based on the account set up on Amazon Seller Central (ASC). ShipHawk can be used in this process to book, pick, pack, label, and ship, where the carrier is Amazon Shipping. For a full guide on Amazon Shipping, be sure to see A Guide to Amazon Shipping: What Is It and Should You Be Using it?
Next Steps
With the increase in prevalence of Amazon in our lives and within the eCommerce world, it is necessary to understand the roles they play and the best ways to leverage their services for your business. To learn more, be sure to watch this discussion, Amazon Unboxed: Explore Fulfillment Opportunities for Merchants, to get a complete overview of all the opportunities available to you.
Whether you are interested in Fulfilled by Merchant, Amazon Transportation Services or Amazon Shipping, ShipHawk can help you find the best way to automate your specific shipping processes and requirements. To leverage Amazon for your business, schedule a time to speak to a shipping expert at ShipHawk today.