What are the alternatives to Amazon's FBA and MCF?
You run an online retail business using the plethora of shopping channels out there online, TV and high street retail. But you don't have your own warehouse, packing staff or I.T team helping you with order integration so how do you go about ensuring your valuable stock is safe and will be processed on-time and dispatched in accordance with your terms and conditions.
Now is its time to look at your options. Amazon and their FBA products are an obvious starting point with the ability to store your goods and process your orders with seemingly infinite scalability but be aware of what you are signing up to when travelling the Amazonian path. Amazon does have an MCF (Multi-Channel Fulfilment) offering, all seemly efficient. They will process your orders and your returns with some questionable turnaround times from the feedback we hear so be aware of your service levels you are offering your clients.
Margining your sale price
Are you aware of all the charges you are liable for? The fulfilment industry is full of little charges that can catch some of you out. You are paying for the overheads to help support the roof your goods are based in as well as a proportion of the labour involved in picking and packing your goods, the packing materials and the logistics to get your items to your client. But are you aware of the margins that are applied form an FBA/MCF perspective from the value of your goods? This means that you may need to factor 15-30% of the sale value as a fee to the fulfilment company as Amazon are not the only ones that sneak this in.
Most fulfilment warehouses have the ability to ship goods via Royal Mail and couriers. But ensure you have the right services at a rate you can margin successfully. As with all things economies of scale come into play here. The Amazon's of the world will have access to the best rates a courier will offer because of the volume of shipments they pass through their network but that's not to say they will give you the cheapest rate. Make sure you talk to your potential fulfilment partner about how to get the best rates and remember, do your goods have to be with your customer the next day? The majority of customers will be happy with a 2-3 day service which will only increase your profits.
Fulfilment Warehouses all over the land are adopting API connections to link your sales channels to a single software tool that should speak to Amazon, eBay, Groupon, Not on the High Street and many other online sales channels as well as your own website. You need to make sure your future plans for selling goods via any sales platform can be automated through your fulfilment service provider. If you have to upload orders directly to a 3rd party system it's only going to slow you down with the growth of your business.
There is a distinct size and scale difference between Amazon FBA/MCF and the UK based independents. You could argue they have obviously got something right. But other fulfilment service providers like CBF have the ability to process orders directly from Amazon and post stock reports automatically directly to Amazon so you have one central resource for all your channels without the Amazon restrictions or margining.
Fulfilment Account Management
Ecommerce Fulfilment is a growing industry and the processes can be hard to scale with warehouse overheads, labour costs, so many variables in packing materials and logistics costs. Yes, the price is a factor to ensure your business is profitable and your outsourced processes need to make you scalable. But think about the infrastructure you would need to ensure your business processes grows indefinitely with you. You need to look at your perception of customer service and what your business demands. We would argue that your packing staff in our warehouse should know your stock as well as you do, they are an extension of your service and spotting faulty product, ensuring packing processes are as slick as possible and account management from your fulfilment team ensures transparency when queried about courier consignments or mispicks.
Ultimately the outsourcing of your fulfilment services and the processes should be in place of a warehouse of your own and staff that you can work with to gain great feedback for every order fulfilled.
Partners like Amazon offer great value for money but transparency in process and costs can be hard to come by the larger the organisation. You will not be able to walk into their warehouse and inspect your stock in one location of even contract Amazon to rebox, reliable or kit build for a marketing push. The choice is yours...