An important function of Fulfillment by Amazon for Amazon Sellers is to understand how to fulfill orders outside of Amazon with FBA Multi-Channel Fulfillment (MCF). For brands and manufacturers, order fulfillment can be a challenge. Your core competency might be in manufacturing or marketing your product; but very few brands and manufacturers are experts in shipping and fulfillment. This is where Amazon FBA Multi-Channel Fulfillment can really help, as sellers can fulfill orders from outside of Amazon using their Amazon FBA inventory. Customers expect orders to have fast, reliable shipping. When order fulfillment is not up to par, it can lead to poor customer satisfaction. On the flip side, if the order is delivered quickly, you can win a lifelong customer. Multi-channel fulfillment through FBA can take the workload out of shipping each individual order and turn the order fulfillment process digital and outsource the work to the experts at Amazon for order fulfillment. This post will cover the basics about Amazon’s Multi-Channel Fulfillment including how to fulfill orders outside of Amazon, the associated fees, and the benefits.
Multi-Channel Fulfillment by Amazon, also known as Amazon Supply Chain, is a tool available for Amazon sellers that allows a seller to fulfill orders for other sales channels at the same delivery speed as Fulfillment by Amazon orders. This program is great for brands and manufacturers that sell on their own website, social media channels, or other third party marketplaces in addition to Amazon. Sellers are able to use the available FBA inventory to fulfill orders within the 48 contiguous states. There are two important timing metrics for considering what shipping speed to use. Shipping times are calculated for when the order is placed to when it leaves the Amazon warehouse. Delivery time is the number of days it takes for an order to be delivered after it is shipped from an Amazon warehouse. Customers are able to see tracking information for orders as soon as they ship from Amazon warehouses so they know when to expect the orders.
How to Use FBA Multi-Channel Fulfillment
Once a seller has inventory in stock at an Amazon warehouse, there are 3 ways to use Amazon Multi-Channel Fulfillment to start fulfilling orders:
Single Order - This method requires the seller to fill out a form and workflow that provides order details such as the customer’s name and address, the products included in the order, and desired shipping speed.
Multi-Channel Fulfillment Bulk Order Template - The bulk order method involves downloading the excel template, including the required details for each order, and uploading the file to Amazon. This is great tool for sellers that have many orders to submit through Multi-Channel Fulfillment (MCF).
Automatic Order Creation - Using a 3rd party shipping software, sellers are able to integrate the Amazon FBA inventory and the third party sales channels. The software or API systems have an automated system for order fulfillment, inventory management and tracking. Amazon has partnered with many third party shipping software vendors to help sellers ensure that customers receive orders no matter which channel they are purchased from and fulfilled through the Amazon FBA inventory system. This method is great for sellers that are looking to reduce their workload and avoid inputting orders manually.
All of these methods can be used for FBA Multi-Channel Fulfillment. As a seller, it is important that you understand which method is best for you. If you just want to use FBA Multi-Channel Fulfillment for the occasional order, single order is probably the simplest option. If a seller prefers to fulfill multiple orders a day, a template would likely be the best. If a seller is looking to fully automate the order fulfillment process across sales from any channel, using the third party shipping software will be the most efficient.
How Much Does FBA Multi-Channel Fulfillment Cost?
There are many benefits to using the Amazon MCF program, but you may be wondering how much it costs. Amazon states that MCF can achieve “up to 60% discounts on multi-unit orders. One fee for pick, pack, and ship. Pay only for fulfillment and storage” The MCF program has a straightforward, low, predictable pricing model for order fulfillment. To view the model in detail, see the updated rate card. There are a few variables to consider in calculating the Multi-Channel Fulfillment cost for your product including:
Product Size Tier - understanding the product size tier of a product is crucial for estimating the cost of fulfillment. The size (length, width, height) and weight of your product will place it in a product size tier. The smaller and lighter your product is, the less you will pay for fulfillment per unit.
Units Shipped in a Single Order - Amazon provides discounts per unit if there are more units included in a single order. For example with current rates, shipping one small standard unit is $4.75/unit; whereas shipping 5+ units in an order is $1.97/unit.
Time of Year - During peak holiday seasons, fees for MCF are increased between $0.20 and $2.50 specifically between 10/15/2022 - 1/15/2023
Outside of contiguous 48 States - Starting 8/1/22 Amazon will have surcharge on fulfillment fees for any orders going to Hawaii, Puerto Rico, the Virgin Islands or Alaska; 100% for standard shipping (2x for small and large standard items) and 200% for expedited or priority (3x expedited or priority for small, medium, large, and special oversize items.)
Time Stored in Amazon Warehouses - Storing inventory in Amazon Fulfillment Centers longer than 365 days will result in long-term storage fees. This inventory at Amazon warehouses can always be returned to sellers by using a removal order to prevent these charges.
Understanding the unit economics for the fulfillment fee, storage fee, and savings with multiple-unit orders, can help you as a brand or manufacturer see if Multi-Channel Fulfillment is a cost-effective approach to fulfilling outside of Amazon orders. It is important to also consider the operational costs you save from transitioning to an FBA batch replenishment system compared to a single order fulfillment supply chain system.
Conclusion
Amazon sellers, brands, and manufacturers that have sales channels outside of Amazon should understand the options to fulfill orders outside of Amazon with FBA Multi-Channel Fulfillment. Amazon continues to launch new programs like Buy With Prime that can also help build out your company’s DTC presence. This can allow sellers to focus on what they do best, whether that is product development, customer service, marketing, etc. and outsource the task of order fulfillment to the experts in that domain. There are many ways sellers can utilize the MCF platform from a situational basis to a fully automated process using 3rd party software. Amazon continues to expand the Multi-Channel Fulfillment program by creating new beta programs including unbranded packaging and international shipping. Goat Consulting has helped sellers looking to optimize their fulfillment process by guiding them through Amazon’s Multi-channel Fulfillment program and assisting with account management. Please reach out through the contact form if you would like more information about MCF. We are happy to answer questions and assist you throughout the process of setting up multi-channel fulfillment.