In the world of professional logistics, Amazon is a force to be reckoned with. Their supply chain spans the globe, and their fulfillment services encompass every type of vendor and sales channel imaginable. In particular, their Fulfillment by Amazon (FBA) service targets entrepreneurs and small business owners. It is a model where Amazon assumes responsibility for all the heavy lifting (for a fee) so that smaller, regional retailers can grow their brand and extend their company’s footprint.
In fact, FBA is such an incredible tool that those who enroll typically earn 30-50% more revenue by default. It’s easy to see the benefit of participation when more than 50% of Amazon’s fulfillment business involves third-party merchants.
While Amazon is more than happy to take on all the logistical headaches your business would typically be responsible for, participation isn’t synonymous with autopilot. There is a virtual minefield of standards, regulations, and preparatory procedures involved before an enrollee can truly harness the power of FBA. That makes the idea of a third-party prep partner attractive. If you are considering outsourcing, here are five key questions you should be asking of potential prep companies.
1. Is FBA Prep a Core Service for Your Fulfillment Center?
First and foremost, when seeking Amazon FBA prep services from a professional 3PL provider, you’ve got to ask the important question upfront: is FBA prep even a key service that your prospective partner specializes in? This might seem like a ridiculous question, but the concern boils down to experience. The field of supply chain management and logistics is as vast and deep as the ocean; universal fulfillment experience is not the same as direct background in FBA prep.
An experienced partner is a necessity. There is a litany of issues that must be addressed before you can establish your FBA relationship with Amazon. Those issues include:
Knowledge of packaging requirements
Knowledge of labeling requirements
Deep understanding of FBA service level agreements
Experience with the full suite of Amazon’s fulfillment methods
Working knowledge of FBA’s customer interface
While a seasoned 3PL provider may have a level of experience that falls adjacent to FBA in terms of the logistics spectrum, Amazon-specific knowledge is a must-have for an FBA prep partner.
2. Does the Facility Have Experience With Individual Packaging and Labeling Requirements?
Amazon FBA excels at a concert of fulfillment-related activities, including warehousing, inventory management, pick and pack, order prep, and shipment. Getting your inbound inventory to the fulfillment center is up to you, but it’s not as simple as rolling an OTR transport with your product right up to their doors. There are packaging and labeling requirements that must be met before enrollment. While Amazon can perform these quality-driven processes on your behalf for a fee, a third-party prep partner can often complete these tasks at a fraction of the cost.
When sourcing your prep partner, you’ll want to make sure that they have a thorough grasp of Amazon’s packaging and labeling requirements. The full set of regulations is a book-length topic by itself, but in terms of packing, careful consideration must be paid to factors such as:
Poly bagged items
Oversized/ odd-shaped items
Additional packing materials (bubble wrap, fill, tape, etc.)
In terms of labeling standards, you must ensure that each pallet or individual item bears the proper identifying box ID. Additionally, the label must be the correct size, not placed on a seam where it might be torn, and accompanied by the shipper’s label. Keeping the rules and regulations surrounding inbound FBA inventory straight can be a Herculean task; make sure that your prep partner has a firm understanding of the rules before contracting with them.
3. Do They Have a Solid Understanding of Amazon SLA Requirements?
Service level agreements (SLA). In other words, what Amazon expects out of you as a partner.
Enrolling in the FBA program brings with it a contractual obligation to abide by Amazon’s rules and regulations if you intend to participate. Predictably, Amazon’s service level agreements contain fine print, some of which can be context-driven and tailored to your company’s exact situation. In truth, the entirety of the FBA program offers a deep level of customization options, so service level agreements can be very situational in nature.
Given the specificity of Amazon’s SLAs, it will inevitably fall to your prep partner to help negotiate and define the terms of your company’s own FBA agreement.
4. What Other Amazon Fulfillment Services are Offered?
Amazon’s total operational picture is complex, to say the least. FBA is not the only fulfillment program available through the commerce giant. Other models include:
Fulfillment by merchant
Seller Fulfilled Prime (SFP)
Fulfillment by merchant simply allows your company to use the Amazon storefront to rank their product, but all prep, pack, and shipping tasks are your responsibility rather than Amazon’s.
Seller Fulfilled Prime is a companion service to FBA. With SFP, your company gets access to the Amazon Prime badge to display on your listed products. This can exponentially help increase your company’s visibility, but order fulfillment is again your responsibility.
While the purview of this article is limited solely to the FBA program, you should seek a prep partner that has working experience in the full range of Amazon fulfillment programs for the sake of a comprehensive skill set.
5. Is There an Amazon Portal Expert Onsite to Help Navigate and Ensure All Labels Are Printed and Orders are Processed Correctly?
Familiarity and working experience are two different things. Your potential prep partner might be well versed in FBA, possessing at least a rudimentary understanding. Still, they also have to have practical experience to do a quality job. You want to make sure that your prospective third-party contractor can navigate FBA’s interface in order to ensure that all labels and box identifiers are correct. Additionally, they must have the requisite knowledge to ensure that all orders are processed correctly. In short, your prep partner must have hands-on experience working with Amazon FBA.
Symbia Logistics is a leader in the 3PL arena. We specialize in bringing you the industry’s top news and trends. For more information on our service offerings, please contact the team at Symbia Logistics today.