When you sign up to sell on Amazon, you're automatically enrolled in Amazon FBA for free, but what are the alternatives?

If Amazon FBA isn't the right fit for your business, there are several other options available that might better suit your needs.

 

What is Amazon FBA?

 

 

Amazon FBA, or Fulfilment by Amazon is a kind of drop shipping. You will ship your products to Amazon, and they will store them in their warehouse. When you receive an order, Amazon will pick, pack, and send your customer orders directly from their warehouse.

Amazon FBA is great for boosting your storage for stock and cutting down the time you’ll spend on fulfilment. With Amazon FBA, you’ll have a streamlined shipping model that can handle high volumes—you can also get that coveted Amazon Prime badge on qualifying products.

 

How much does Amazon FBA cost?

There are two Amazon selling plans to choose from in the UK:

FBA Individual Plan

• You’ll pay £0.75 for each sale of an item.
• Referral fees vary from between 7.14% and 15.3% per item.
• If you’re selling accessories for Amazon devices, you’ll pay a referral fee of 45.9%.

FBA Professional Plan

• You’ll pay a monthly cost of £25.
• This plan is perfect for those who sell over 40 items per month.

 

Other Amazon Fees

There are other fees you’ll need to budget for if you’re thinking of using Amazon FBA. These are:

Storage fees. These are calculated by cubic feet and will vary depending on the product type and even by season. Storage is more expensive at busy times of the year, such as Christmas, and you’ll pay more if you’re shipping any dangerous goods.

Amazon fulfilment fees. There are other storage fees that you might not expect. For example, long-term storage fees, refund administration fees, and overage fees.

 

How Does Amazon FBA Work?

 

 

All you’ll need to do is send your product to an Amazon warehouse and they’ll process your orders for you as they come into your marketplace.

Make sure to keep on top of sales and that you have plenty of stock and they’ll do the rest.

 

Cons of Amazon FBA

• Need to invest in large quantities of product.
• No input into return policies.
• High storage costs will affect your profit margins.
• No control over packaging and customer support.
• Lack of branding opportunities may cause customers to attribute their purchase to Amazon rather than your brand.
• Impersonal customer service.

 

Alternatives to Amazon FBA

 

 

Let’s take a look at the FBA alternatives:

 

Fulfilment by Merchant

Perfect for those with a range of exclusive products with a low turnaround, fulfilment by merchant (FBM) means that you ship the products listed in your Amazon shop directly to your customer when they place an order.

You’ll have complete control over how you store your products and how you choose to ship them, but you’ll also have to do all the picking, packing, and posting. Your service will need to be top-notch too because you won’t be able to display the Amazon Prime logo.

FBM could be a great option when you’re just starting out, but as your sales grow, you might want to reconsider. Typically, when you send around 100-250 shipments per month, it’s time to think about outsourcing your logistics.

 

Seller-Fulfilled Prime

A programme for experienced, high-volume Amazon sellers, Seller Fulfilled Prime (SFP) lets you ship from your own warehouse or third-party fulfilment centre direct to your customers.

You’ll get the Prime badge on your listings, and you’ll be in control of your fulfilment and customer service. Win, win!

The downside is that this is a selective programme.

 

Third-Party Fulfilment Centres for Amazon Sales

Third-party fulfilment centres (3PL) can help you get the best out of the Fulfilment by Merchant option. By outsourcing your logistics to a specialised partner, you'll get a streamlined fulfilment process whilst retaining more control over your costs.

Let’s take a look at some options:

 

a2b Fulfilment

An award-winning third-party fulfilment provider, a2b Fulfilment offers 1, 2 and 3-day shipping from their four strategically placed logistics hubs across America.

 

ShipBob

A global fulfilment solution, ShipBob can help you create streamlined supply chain solutions by letting you work out optimal inventory placement across their growing network of fulfilment centres.

ShipBob’s pricing tends towards the higher end of the market, making it less ideal for those with slow-moving products or low profit margins.

 

Red Stag Fulfilment

A third-party logistics provider with an excellent reputation, Red Stag Fulfilment provides warehousing, order fulfilment, and shipping solutions to small and midsize businesses.

It’s well-known for its outstanding customer support and provides affordable shipping with fast turnaround times. There are no long-term contracts, but pick-and-pack fees can be costly and with only two warehouses in America, they’re not ideally situated for inventory distribution.