Fulfillment by Amazon (FBA) - A necessity vs. choice?
From lifestyle gadgets to apparel to groceries, Amazon’s dominance as the leading e-commerce platform makes it the first stop for consumers worldwide when shopping online. With the deep rooted presence in households across the world, Amazon has set itself as a key marketplace for e-commerce brands, choosing to list their products to tap in a massive and engaged audience. Beyond that, many businesses sell on Amazon in addition to their own e-commerce stores, recognizing the immense traffic and potential sales it offers.
- Prime Benefits
- Seamless Marketplace Integration
- Access Amazon’s Global Fulfillment Network
- Amazon Algorithm for Product Listing
While Amazon’s marketplace presents an incredible opportunity for growing e-commerce brands, its dominance also binds many retailers to align with its systems. While some brands might initially see FBA as an optional fulfillment strategy, many end up adopting it because of the competitive pressure Amazon creates within its ecosystem.
As Amazon continues to mold the e-commerce landscape, businesses that want to thrive on the platform often find themselves leaning on Fulfillment By Amazon to stay competitive. For brands seeking to leverage Amazon’s marketplace, FBA is a sometimes expensive tool to drive growth, expand reach, and ensure customer satisfaction.
The Case for Using a 3PL - Seamless Fulfillment with Amazon FBA Alternative
Given the limitations of FBA, many e-commerce brands are now looking for alternatives. If you’re an e-commerce brand looking for more control, lower costs, and a unique customer experience and want to avoid FBA’s fees cutting into your margins, partnering with a third-party logistics provider (3PL) is your solution!
1. Control Over Fulfillment
Unlike FBA, where Amazon handles all aspects of fulfillment, with a 3PL like Locad, brands have more control and visibility over how their products are stored, picked, packed, and shipped. This ensures that you’re updated with the inventory movement, avoiding any errors, and delivering a great unboxing experience to your customers.
Customize Packaging
Crafting a memorable unboxing experience not only distinguishes your brand amidst competition but also leaves a lasting mark on your customers, encouraging repeat sales.
Adjusted Fulfillment
Plan the movement of your stock from in and out of the warehouse depending on the peak seasons to suit your business needs.
2. Predictable Costs, Profitable Margins
Tap into the potential for lower and more predictable fulfillment costs by working with a 3PL. Unlike Amazon FBA’s fluctuating fees, 3PLs onboard your brand on a pre-agreed and transparent pricing structures, allowing brands to have a clearer understanding of what their fulfillment expenses will be and avoiding any surprise charges. Many 3PL like providers also offer flexible storage and shipping options, which can help sellers optimize their fulfillment for cost efficiency.
3. Multi-Channel Fulfillment
As shoppers are spoilt for choice, they consider purchasing from a variety of channels. With a 3PL’s Multi Channel Fulfillment capabilities, streamline your fulfillment process by fulfilling orders not just from Amazon but other marketplaces as well. Whether you’re selling through your own e-commerce store, eBay, Shopee or Lazada – simply connect and fulfill your orders from various channels, without any extra cost and labor.
4. Improved Customer Service and Relationships
Unlike FBA, where customer service is managed by Amazon, retain the ability to directly interact with your customers. A 3PL enables you to provide a more personalized experience for your customers. Directly manage returns, addresses, customer inquiries, and engage with your audience in a way that reflects your brand values.
Ultimate FBA Alternative - Locad’s end-to-end Fulfillment services
Designed to champion the merchant, experience a simplified plug-and-play solution, connecting to multiple marketplaces including Amazon, enabling seamless fulfillment. Jump the ship to scalable fulfillment with our reliable tech stack and scale your Amazon business while maintaining a strong brand identity.
Same Day Order Fulfillment
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Marketplace Fulfillment SLA
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Particular | FBA with Amazon | FBM with Locad |
Fulfillment Cost | Fees can fluctuate, making it harder to forecast expenses | Standard rates across the year |
Storage Costs | Higher fees for slow-moving stock and long term storage eat into profit margins | Real time analytics to display slow-moving stock, enabling inventory optimization and saving costs |
Personalization | Products are shipped in Amazon-branded packaging, limiting branding opportunity | Products are safely packed with inserts in customized packaging |
Inventory Management | Running out of stock can negatively affect the Buy Box eligibility and product rankings, while overstocking can lead to high storage fees. | Locad Logistics Engine displays real time stock level across warehouses, enabling efficient inventory management |
Customer Service | Amazon’s customer service may resolve issues in a way that doesn’t reflect the brand’s values or voice. | Interact with customers directly, maintaining the quality of support provided. |
Non-Amazon Sales | Amazon charges a fee for fulfilling non-Amazon sales, thus eroding margins | Retain profit margins with unilateral fees for Multi-Channel Fulfillment |
1. Experience Prime Shipping standards with Locad
Brands chase the golden standard of shipping with Amazon Prime’s 2-day shipping. However, offering 2-day shipping through Seller-Fulfilled Prime can seriously impact profit margins.
With Locad, offer seamless 2-day shipping for your Fulfilled by Merchant (FBM) orders with our 30+ efficient last mile partners across the globe. Leverage our relationships with shipping carriers to secure discounted rates, significantly lowering your shipping costs and increasing your profit margins. Learn more about our Last Mile Capabilities.
2. Distributed Fulfillment
Store your inventory closer to your customers with Locad’s Global Warehouse Network across Asia-Pacific, GCC, and the US, to take advantage of distributed fulfillment to store and ship without hassle. Unlike Amazon FBA’s global network where you lack the control and visibility on your inventory’s storage – with Locad strategically distribute your inventory across multiple fulfillment centers, optimizing shipping efficiency, saving money while embracing scalability and adapt to fluctuations in demand without any supply chain disruptions
3. Central Management of Multi-Channel Fulfillment
With Locad, fulfill orders not just from Amazon, but other marketplaces without paying non-amazon sales fees! With Locad Logistics Engine, an end-to-end cloud like Order Management System made for brands like yours! Centrally manage, edit, and pick, pack, ship all orders. Experience seamless Multi-Channel Fulfillment without worrying about your inventory or loss of profit margins!
4. Customized Packing Solutions
Further your brand’s value and build lasting customer relationships with Locad’s efficient value added service of customized packaging. Safely package with inserts and branding that promises to deliver a great unboxing experience to your customers.
5. Inventory Management with Real-Time insights
With Locad Logistics Engine, brands can effectively access real time inventory updates across Amazon and other integrated marketplaces. Automate inventory management, ensuring you’re always on top of stock levels, even during high order volumes with our Stock Movement Indicator and Inventory Forecasting feature. Get real time-insights for strategic decisions for your e-commerce business.
6. Localized Customer Support
With Locad, you’re guaranteed to be supported through your e-commerce fulfillment journey! Our localized and dedicated customer support team across the globe boost the know-how of seamless Amazon and other marketplaces fulfillment.
From Inbound to Outbound - Fulfilled by Merchant with Locad
Inbounding
The Locad Logistics Engine allows merchants to submit inbound requests and request value-added services (VAS) like Kitting and Labelling, streamlining inventory reception for the warehouse team.
Warehousing
Brands can easily view their warehouse inventory through the dashboard. The Locad OMS also offers batch and expiry management to help prevent inventory loss or damage.
Image of inventory overview
Picking
Orders from marketplaces display on the dashboard, where merchants can also input order forecasts to optimize warehouse operations.
Packing
Brands can add customization requests and track inventory via the dashboard, streamlining the packing process and providing visibility to communicate accurate delivery times to customers.
Shipping
Brands can add customization requests and track inventory via the dashboard, streamlining the packing process and providing visibility to communicate accurate delivery times to customers.