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What is FBA?

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FBA, Fulfillment by Amazon, is one of Amazon’s fulfillment platforms for online sellers. Sellers that do not have fulfillment logistics in place can pay Amazon a fee to store their inventory in one of Amazon’s distribution centers. Amazon will then pick, pack, and ship their orders for a fee. This allows FBA sellers to focus on marketing their Amazon stores following Amazon's marketing guides. For some online businesses, FBA provides turnkey solutions to renting warehouse space and hiring a fulfillment team to meet their increasing order fulfillment needs. Amazon’s popularity offers FBA sellers the opportunity to establish their brands by association with this online juggernaut. FBA sellers are also eligible for Amazon’s Prime status which gives them access to one-and two-day shipping and more of a shot at “winning the Buy Box” with other sellers listed below the “Buy Box.” Research shows that most Amazon Prime members will buy the product that comes up first in a search for the product they are interested in buying.

While all of that sounds like a good solution for your e-commerce business, there are some downsides. For example, right before the 2020 holidays, Amazon instated a 200 item limit of one SKU on FBA shipments. This caused ripples in the Amazon seller community, as sellers were faced with:

  • Paying a lot more for their products from the supplier, if they ordered only 200 items at a time
  • Ordering their usual amount of items from suppliers and asking the supplier to send them to Amazon, as needed in 200 shipments
  • Contracting with a 3PL fulfillment company to store their entire inventory and send it to Amazon, 200 at a time.

Amazon’s limit on inventory storage, during the busiest shopping season of the year put many sellers at risk to lose sales due to lack of inventory and the time needed to replenish it. On top of that, and possibly because of it, many sellers are expressing frustration at Amazon’s delays in getting their products logged into their system. Inventory sitting on Amazon’s loading dock for days, even weeks isn’t helping anyone, least of all, the seller. If your customer can’t get your products when they expect them, they will go elsewhere, at the touch of a screen. If Amazon’s delay causes your delivery times to lag, it not only affects Amazon’s credibility but your seller rating. Remember when Amazon stopped fulfilling orders on anything but essential items during the March 2020 pandemic shutdown crushing many sellers in its wake? It’s their world and businesses need to learn how to navigate it.

The FBA system adheres to strict rules and regulations, with labeling fees charged per item for mislabeled inventory, high fulfillment fees, and long-term storage fees for inventory that remains in their warehouses longer than a year. With these fees and others, FBA can turn into an expensive venture. To add insult to injury, Amazon puts its stamp on everything it touches. No personal touches are allowed on your products or any custom packaging. Does your FBA experience feel impersonal? Can you afford to adapt to whatever changes Amazon chooses to make to its inventory management operations?

Phase V’s tech-enabled 3PL Fulfillment Company will partner with you to:

  • Receive your inventory, inspect it on arrival and store it in our safe, ambient, and humidity-controlled warehouse
  • Provide labeling/Bar Coding in-line with Amazon’s specifications
  • Pack orders according to your specs with branded inserts, packing materials, and shipping documents that reinforce your brand
    Provide Polybagging and Re-Packing services
  • Accommodate a variety of shipping options optimized to save you money on carrier rates and freight regulations
  • Deliver your orders on-time, with 2-day delivery windows
  • Ensure your customers are in good hands with our live, personable, and knowledgeable customer service reps

For some FBA sellers, they feel that the loss of control over their business’s fulfillment and customer experience is offset by the increased sales opportunities FBA offers them. For other sellers, a hybrid solution can take the form of partnering with the right 3PL provider, such as Phase V Fulfillment, to store and ship their FBA inventory, 200 units at a time, along with customized, streamlined order fulfillment, transparent inventory management, and two-day shipping for your other multi-channel marketplace orders.

If you’re interested in learning more about Phase V Fulfillment’s alternative to FBA, contact us today.