3rd Party Logistics providers compete on price and service. Fierce competition means successful 3PLs are constantly focused on differentiating their service offering. A major vertical for 3PLs to grow into is ecommerce fulfillment. As business-to-consumer and business-to-business ecommerce continues to grow, logistics warehouses need to be thinking about how to capitalize on this accelerating trend.
There are 2 million 3rd party sellers on Amazon’s Marketplace and hundreds of thousands of these are businesses using Amazon’s fulfillment services (FBA) to warehouse and fulfill to their customers.
With Amazon making up the vast majority of most marketplace sellers’ sales mix, FBA has become such an integral part of their operation that many don’t have a non-FBA fulfillment capability. These sellers have essentially outsourced their warehousing and fulfillment to Amazon without realizing the tradeoff they are making.
FBA Multi-channel Fulfillment
Sellers that have their inventory warehoused in Amazon’s fulfillment network are able to issue multi-channel fulfillment orders for Amazon to ship to customers who purchased outside of Amazon.com. This means many sellers are using FBA to fulfill direct to their customers on eBay, Jet.com, Walmart Marketplace and their own webstore (i.e. Shopify).
The first problem which many sellers are unaware of, is that all packages shipping from Amazon are shipped in Amazon-branded packaging. In other words, shoppers on eBay, Jet and Walmart and their own webstores are receiving their orders in Amazon-branded packaging. Not only is this confusing, it’s also reinforcing a notion that Amazon is the go-to site next time the consumer is shopping for similar products. It should go without saying that this is something non-Amazon channels and brand-focused retailers do not want.
Across our growing base of sellers, we've noticed periodic spikes in late FBA Multi-channel Fulfillment shipments. Standard multichannel fulfillment orders that typically ship in 24 to 36 hours can instead ship in 2 to 8 days. When this happens, sellers are instantly in violation of service level requirements and unable to meet the expectations of the end customer.
Sellers attempting to leverage their FBA inventory in their efforts to build a durable, diversified online retail business are in serious need of a reliable 3PL partner.
Channels including eBay and Walmart consider Amazon’s own delivery service, Amazon Logistics, to be an invalid carrier. This coupled with shipping delays means sellers reliant on FBA are statistically ineligible for prioritized ranking on channels outside of Amazon and also at risk of temporary and permanent suspension.
By focusing on the needs of FBA sellers, you can position your fulfillment service for rapid growth. Here are some ideas:
In summary, ecommerce fulfillment is a major opportunity for 3rd Party Logistics providers and there hundreds of thousands of sellers that need a reliable, cost-effective partner to handle warehousing, inbound FBA shipments and ecommerce fulfillment. How are you positioning your 3PL service offering?
About Zentail: Zentail is a leading multichannel software platform that makes it fast and easy for retailers and brands to list products to Amazon, eBay, Jet.com, Walmart.com and Google Shopping.