Amazon’s Fulfillment by Amazon (FBA) program offers a convenient solution for sellers by handling storage, packing, shipping, and making products Prime-eligible. However, while FBA is popular, it may not always suit every seller’s needs. Whether due to rising costs or changing policies, many sellers are exploring alternatives to FBA.
In this article, we’ll cover some key concerns with FBA, the advantages of using alternative fulfillment options, and several popular fulfillment solutions for 2024.
Concerns with Amazon Fulfillment
Amazon has frequently adjusted its storage limits for FBA sellers, with recent changes creating challenges. For example, the March 2023 update introduced new FBA capacity limits, which control how much inventory sellers can send and store in Amazon’s warehouses based on their Inventory Performance Index (IPI) score. Sellers are now restricted to storing around three months’ worth of inventory, which may not be ideal for those launching new products or dealing with fluctuating demand. If more space is needed, sellers can request additional capacity for a fee, which may not be cost-effective for every business.
Additionally, Amazon announced a Holiday Peak Fulfillment Fee from October 15, 2023, to January 14, 2024, significantly increasing fulfillment costs during the busiest selling period.
Why Use Amazon Fulfillment Alternatives?
Here are some key reasons sellers are turning to third-party logistics (3PL) alternatives to FBA:
- Lower Fees: Especially during peak seasons, Amazon’s storage fees can soar. Many 3PLs offer more competitive rates, especially for long-term storage.
- Customization: Amazon doesn’t allow personalized branding on packages. 3PLs can offer custom packaging, inserts, and branding to enhance the customer experience.
- Dedicated Account Support: Instead of relying on Amazon Seller Support, many 3PLs provide dedicated account managers to help resolve issues quickly.
- Reduced Shipping Costs: Some 3PLs can negotiate better shipping rates, lowering overall fulfillment costs.
- Faster Shipping: Many 3PLs provide 1- to 2-day shipping services, allowing sellers to offer competitive delivery times outside Amazon Prime.
Amazon Fulfillment Alternatives to FBA
If your current storage or capacity limits with Amazon are problematic, consider the following fulfillment alternatives:
1. Fulfillment by Merchant (FBM)
Fulfillment by Merchant allows sellers to store inventory in their own locations and ship orders directly. This option lets sellers maintain full control over their inventory and fulfillment process. For sellers who have the space and resources to manage their own orders, FBM can be a cost-effective alternative. Plus, you can create both FBA and FBM SKUs for the same ASIN, ensuring no downtime if FBA inventory runs out.
2. Seller-Fulfilled Prime (SFP)
Seller-Fulfilled Prime enables sellers to offer 2-day Prime shipping without relying on Amazon’s warehouses. However, sellers must first pass a trial period to ensure they can meet Prime shipping standards. This is a strong alternative for businesses that want to keep the Prime badge while managing fulfillment themselves.
Third-Party Storage & Fulfillment
If you don’t have the space or resources to manage fulfillment on your own, third-party logistics companies (3PLs) are another solution. Here are some advantages of using a 3PL:
- Lower Storage Costs: 3PLs often provide straightforward and competitive pricing without seasonal surcharges.
- Inventory Control: Unlike FBA, some 3PLs offer flexible storage options without strict capacity limits.
- Quality Control: A 3PL allows you to maintain quality control over packaging and shipping, minimizing errors.
- Account Managers: Many 3PLs assign a dedicated account manager to each client, making issue resolution easier and faster.
- Shipping Discounts: 3PLs may offer discounted shipping rates that rival or beat Amazon’s rates.
3PL Fulfillment Centers for Amazon Sales
Several 3PL providers specialize in Amazon fulfillment and offer various services to suit different business needs. Below are some trusted 3PL options:
1. A2b Fulfillment
A2b Fulfillment supports Amazon sellers through both Vendor Central and Seller Central. They have bi-coastal locations in the U.S. that allow them to reach 94% of households within 1–2 days.
- Best for: Small- to medium-sized businesses, Fulfillment by Merchant (FBM), and Seller-Fulfilled Prime (SFP).
- Benefits: Same-day shipping for SFP orders and bundling services.
2. ShipBob
ShipBob is a tech-enabled 3PL that uses proprietary software to manage fulfillment across multiple channels, including Amazon, Shopify, and Walmart.
- Best for: Direct-to-consumer businesses, e-commerce sellers on any platform.
- Benefits: Affordable 2-day shipping, no Q4 storage fee increases, and software integration with Amazon.
3. Red Stag Fulfillment
Red Stag specializes in fast direct-to-consumer shipping, with fulfillment centers located on the east and west coasts of the U.S.
- Best for: Small- to medium-sized e-commerce businesses, FBM, and SFP.
- Benefits: 30-day free trial, no storage restrictions during holidays, 2-day delivery to 97% of U.S. addresses.
4. ShipMonk
ShipMonk offers a range of services, from FBA prep to multi-channel fulfillment, including e-commerce platforms like Shopify and eBay.
- Best for: Multi-channel fulfillment, subscription box fulfillment, and SFP.
- Benefits: Custom packing, dedicated account manager, and scalable solutions for shipping large volumes.
Final Thoughts
There are many great alternatives to Amazon FBA that can save costs and provide better fulfillment flexibility. Whether you’re looking for greater inventory control, lower fees, or improved branding, third-party fulfillment companies can offer a viable solution. Take the time to research which fulfillment provider fits your needs, and ensure that you maintain the highest level of customer satisfaction, no matter which fulfillment path you choose.
Let us know in the comments if you have any further questions about FBA alternatives!
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