What Is Amazon Direct Fulfillment?


Under the impact of COVID, e-commerce giant Amazon is also facing delivery and supply chain delays. Many Amazon vendors find they need to deal with this issue themselves at this point, so they opt for an alternative: Amazon direct fulfillment. And fulfilled the customer’s order perfectly.

So what exactly is Amazon direct fulfillment? Can it be used as a preferred or alternative plan for your business to deal with risk? Stay tuned to this page to find out how much direct fulfillment can bring you in sales.

It is a retail drop shipping program for vendors on amazon. Amazon vendors are different from Amazon sellers.

Vendors on amazon directly provide wholesale products to the Amazon, and the Amazon will mark the products as “Sold by Amazon“. Amazon sellers are independent e-commerce sellers who set up shop on Amazon and sell products wholesaled from different channels.

Simply put, direct fulfillment by Amazon allows vendors on amazon to sell products directly to amazon customer without using Amazon’s fulfillment centers.

When a customer places an order on Amazon, Amazon forwards the order to the vendor who offers the product. The vendor then sends the order directly to the end customer. No longer go through Amazon’s warehouses and logistics in the middle.

At the same time, you will also be responsible for shipping the product to the customer yourself. This means you should have your own warehouse storage and shipping processes.

So what are the benefits for the vendors? Let’s first look at the specific process.

How does Amazon Direct Fulfillment Work


How does Amazon Direct Fulfillment Work?

The buyer checks out and places an order on Amazon.

Amazon sends the same purchase order to the vendors.

Create shipping labels on Amazon and vendors attach them to each product before shipping.

The vendors will package the product directly to the buyer, and the shipping fee will be paid by Amazon.

This process eliminates the need to send the goods to the Amazon warehouse center, which saves this part of the freight. And instead of shipping the goods through Amazon to your customers, you can significantly reduce damaged goods and wrong shipment by yourself.

What are the Pros and Cons of Amazon Direct Fulfillment?

Before you start using amazon direct fulfillment program, take a closer look at its pros and cons.

The Pros of Amazon Direct Fulfillment

Amazon Handles Customer ServiceDirect fulfillment amazon gives you access to Amazon’s customer service. This saves the trouble of managing your own customer support team while managing other aspects of the business.
Amazon Pays for your FreightAmazon is responsible for all shipping costs incurred when you complete your order through direct fulfillment amazon. The only costs for which the supplier is responsible are the cost of performing labor and packaging materials.
Improve Quality ControlWhen vendors on amazon manages performance, they can decide how to transport items to avoid damage during transportation. This gives the vendors on amazon greater control over product quality and customer experience.
Reduce the Risk of StockWith vendor direct fulfillment amazon, they don’t spend time and resources transferring inventory from your warehouse or storage facility to Amazon fulfillment centers or distribution centers. Reducing the transportation time will reduce the possibility of your encountering out of stock.
Simplify TransportationShipping directly from your warehouse to the customer (instead of shipping to the Amazon factory, and then shipping to the customer) simplifies the transportation process and minimizes the risk of supply chain complexity (such as delays or accidents).

Shows Item Availability InstantlyAmazon extracts inventory from electronic data interchange (EDI) in real time to show buyers that the seller’s items are available for purchase.

Reduce the Risk of Stock


The Cons of Amazon Direct Fulfillment

Low visibility in Amazon searchWhen you search for products you sell on Amazon, the search results will give priority to FBA seller listings, and your ranking may be lowered.
Vendors handle moreVendors on amazon need to direct fulfillment orders and shipping yourself. This involves a lot of labor and time.
You need to have your own warehouse inventory and shipping procedures. And you have to manage your inventory yourself. This will take a lot of your time and effort. And you still need to prepaid shipping. If you ship your products to customers all over the world, you will pay a lot of money.
In the end this needs to be delivered by the merchant. At the same time, if there is a problem with the procurement or supply chain, you need to deal with the customer service yourself. This is time-consuming and may require additional personnel. Increased labor costs.

Amazon direct fulfillment and Amazon FBA

Amazon direct fulfillments
Vendor manages their own supply chain.
Vendor management and storage inventory.
Vendor fulfills orders.
Vendor ships, Amazon pays for shipping
Amazon FBA
Amazon helps manage the supply chain.
Amazon management and storage inventory.
Vendor fulfills orders.
Amazon ships, the merchant pays for shipping 

What is Amazon FBM?

FBM (Fulfillment by marchants) refers to Amazon sellers listing their products for sale on Amazon. But the sellers themselves ship the products to each buyer. This means that sellers are responsible for fulfilling their own orders, Amazon doesn’t handle.

This sounds similar to direct fulfillment, but they are different.

FBM sellers usually sell directly to consumers. But vendors on amazon usually wholesale their products to Amazon.
Both are responsible for fulfilling and shipping orders themselves. But Amazon pays the shipping for direct fulfillment providers, and FBM sellers are responsible for the associated costs themselves.

FBM is more suitable for exclusive products, low volume products or products with lower profit margins.

Amazon direct fulfillment and dropshipping

If you’re not sure if direct fulfillment amazon is right for your eCommerce business, you can compare it to other fulfillment options.

Amazon direct fulfillment
You are responsible for shipping products to customers.
You are responsible for customer service.
You must pay the freight in advance.
You can manage your own inventory.
Dropshipping
Third-party suppliers are responsible for delivering products directly to customers.
The supplier is responsible for customer service.
The reliable supplier pays freight.
The supplier is responsible for inventory management.

Direct fulfillment is necessary, but it is important to have a reliable shipping process and contact suppliers. This is also why many direct fulfillment amazon vendors choose to outsource their own shipping to 3PLs.

You don’t have to spend a lot of time and effort. Focus yourself on growing your business.
Save a lot of labor and save more costs.
Third-party logistics providers can provide warehouses and shipments around the world, are faster, and generally cost less than merchants can find on their own. This saves some storage and shipping costs.
3PL

何时选择直接履行?

虽然直接履行有一定的局限性,但无法与其潜在优势相提并论。幸运的是,如果您想降低库存管理和订单履行的成本,直接履行亚马逊是一个极好的选择。直接履行适合您吗?这取决于以下几点:

1

Business scale经营规模较大的供应商可以从直接履行中获益最多。
大型企业不需要依赖亚马逊的仓储和运输服务。通过直接运送给客户,可以最大限度地降低履行成本。也没有与亚马逊履行相关的持续费用。

2

Continue sales within inventory lead time直接履行是供应商在需求波动期间保持重要收入流流动的好方法。
在大流行期间,电子商务销售额增长,而亚马逊的仓库空间已经用完。FBA 运营跟不上,一度停止运送非必要的 FBA 物品。如此多的亚马逊商家转向直接履行。

3

Low disposable capital在某些情况下,直接履行业务模式允许您仅在买家实际下订单后才购买商品。这种直达的运输方式对创业者来说是非常有吸引力的。在存量资金有限的情况下,创业者可以先行创业。

How To Set Up Vendor Central Direct Fulfillment

If you are an existing vendor on Amazon:

Submit a support case on your vendor central and request access to Dropship Central and Direct Fulfillment.

If you are not, the registration process is as follows:

When configuring your amazon vendor central account, please notify your company contact to tick the “DF” (“Direct Compliance”) box.
During seller central setup, you will receive an invitation to sign up for dropship central.
You should provide the shipping label (your own or Amazon’s shipping label), your warehouse information, service time and the carrier’s pickup time.
Within 48 hours, you will receive instructions on how to load the information in the inventory feed into Dropship Central.

Conclusion

Now you should know that Amazon has limited inventory capacity and direct fulfillment is the best option for your business to avoid losing sales on Amazon when your own warehouse is out of stock. Many vendors on amazon choose to benefit from outsourcing their logistics fulfillment to experts. Now more than ever you need well-run and professional logistics to meet your customers’ needs.

Honest FulPhilment, which provides comprehensive eCommerce fulfillment services. We have warehouses all over the world and all orders are at your fingertips. Not handling physical objects, not paying for warehouse space, not distributing ordered items, or not managing inventory levels appeals to most Amazon vendors. We are proud to offer a transparent and user-friendly system that anyone can use. Please contact us now.


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