The 3PL vs FBA is a common choice many e-commerce businesses are forced to deliberate over. There are advantages to both fulfillment methods. However, in this article, we will look at some of the many reasons we believe it is smarter for you to grow your business on Amazon with a 3PL provider such as JDS Prime Logistics.
Product Management
Partnering with a 3PL means you will be receiving a personal manager that looks to refine and improve your product. This can include bundling services, custom packaging, changes to the product itself, as well as many other services. It is critical that you have a finished product that delivers an unparalleled unboxing experience. We will work tirelessly with you to improve the way in which you package your product. It is very important to have a strong foundation of knowledge when it comes to packing your products. A 3pl can better identify design flaws as well as potential risks in packaging once the product is sent to us.
When sending a product into FBA, what you send is what they will send out. There is no opportunity to refine your product further and can leave you dissatisfied if changes need to be made. They can place a product into “stranded inventory”, which means the product can no longer be sold and the listing can be temporarily deactivated. This means that you will have to write a comprehensive plan of action that will likely be denied. It can take months for a product to be taken out of stranded inventory leaving you with the burden of making up for lost sales. In many cases, they can force automatic product removal from their facilities and send it back to your warehouse, costing you more money.
Quality Control
Quality control is a critical factor that businesses need to be aware of when fulfilling orders. It is imperative that your brand be built on quality and have a good reputation that follows it throughout the product life cycle. When products are sent to Amazon FBA, they will be sent to various warehouses across the country. Yes, this can help to improve shipping rates and consistency as the warehouses are closer to customers. However, this will drastically reduce the quality control that you have over your product. For example, if a company were to find out that there was a product defect in the manufacturing process, they will now have to request removal from multiple warehouses. This can be difficult to track and be more costly as multiple shipments need to be made. A 3pl is better equipped to make changes into products and address quality issues before shipping direct to customers. This is because we have a dedicated team constantly monitoring the supply chain process to work as efficiently as possible. Warehouse workers are extensively trained to identify issues in inventory and report them to management as quickly as possible. Most importantly, as soon as you call in to our team we can reach your product in seconds to check on any concern that you may have.
Cheaper Costs
Over the years Amazon FBA has been continually raising their prices. The fact is, it is not cheap to manage over 100 fulfillment centers and 124 million square footage of space. Due to Amazon’s commitment to customer service, they had an estimated shipping cost of 38 million dollars in 2019. To offset these costs, they have been working towards building their own carrier network that can help them reduce their rates. However, this is not fully developed which means that sellers are bearing the cost. Year after year FBA has been increasing their fees. Most noticeably, this can be seen during the holiday seen when they tripled FBA fees in 2018. This is an upward trend that is likely to continue.
Smaller to Medium sized businesses often run on thinner margins and cannot afford these increases in prices. Luckily for them, 3pls exist and can provide a simple cost structure that does not change on a dime when demand can be hard to meet. You are often charged by pallet or by square footage, which makes projecting warehousing costs very simple. You should not be penalized for optimizing your own business and increasing sales. A 3pl is in the business of scaling with you, and looks to optimize your costs so you can develop a longer lasting partnership. 3pls often get cheaper shipping rates because of their scale and order volume. Years of partnerships with carriers have enabled 3pls to get discounted shipping rates which can be extremely beneficial to your business.
Direct Competition
Unless you are selling a private label product there is a good chance that amazon is already selling the product that you are looking to add to your Amazon business. This provides a direct conflict of interest and something that companies should look to avoid when trying to grow their business. It is clear that little support will be given in the fulfillment process especially when selling the same product as other sellers. In many cases, Amazon can raise FBA fulfillment fees to direct sellers away from offering a certain product.
Customer Service
Another pivotal reason that you should look towards partnering with a 3pl is the customer service. In most cases, you will be assigned a personal product manager that looks to improve the fulfillment process and provide feedback on how certain elements can be improved. You will get quicker updates working with a 3pl and have instant access to your product. Working with FBA can be a very painstaking process when it comes to getting customer service. You are provided an “Amazon rep” that aids you in the overall seller experience. However, this person is assigned to many different sellers and cannot devote the attention necessary to grow your product and brand. They will not have instant access to your product, and will have no ability to inspect for quality control purposes. If they cannot be quickly reached, which is often the case, you will have to resort to Amazon forums. Yes these can be helpful for answering basic questions. However, it is always better to have human interaction that a 3pl can better provide as their infrastructure is not solely based on cloud technology.
Conclusion: Both 3PL and FBA are effective options for a company to fulfill and ship its orders. Although there are advantages to both, it is clear to see that 3pls will provide a better customer experience. They are more attentive to your needs while still providing effective shipping rates. If customization and quality control are a core competency of your business, then you should look towards partnering with a 3pl. It is important that a company understands that fulfillment is just as critical to a business as product design. A 3pl understands this and will look to scale with you instead of treating you as just another transaction. JDS Prime Logistics is an experienced 3pl provider that has worked with outside companies as well as Amazon. With years of experience sending shipments into FBA, we have learned all the intricacies that come along with it. Our streamlined and integrated process is designed to help your business excel. We look forward to hearing from you and encourage you to reach at any time you feel the need to.
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