Amazon has evolved from a virtual bookstore into an online retail giant with massive billions in revenue. The world’s leading e-retailer giant recorded over $386 billion in sales in 2020 alone. Amazon can boast of 150 million Amazon Prime Members, 300 million active customer accounts worldwide, and an average 21% revenue growth year-over-year.
Apart from providing its customers with a means of advertising and selling their products, Amazon also offers a 3PL service known and Fulfilment by Amazon (FBA) or Amazon 3PL.
Amazon 3pl is a third-party logistics service offered by Amazon which allows any e-commerce business registered as a seller on Amazon to hold inventory in Amazon distribution centres until customers place an order. Amazon then picks, pack, and ship them, advertise your products for sale on their platform and provide customer service, including handling returns.
Amazon has around 145 warehouses around the world (84 in the United States, four in Canada, 29 in Europe, 15 in China, 10 in Japan, and seven in India), which collectively account for more than 40 million square feet of space. So, Amazon 3pl is the world’s largest third-party service provider. As such, many sellers use Amazon’s massive infrastructure to provide e-commerce fulfilment for their own customers.
Amazon logistics is ideal for any business, including large, small and medium-sized organizations. Before shipping to Amazon FBA, it is imperative to highlight Amazon FBA logistics pros and cons.
Amazon 3pl Pros
1. Access to Massive Online Shoppers
A significant merit of using Amazon 3pl is direct access to Amazon’s over 100 million Prime subscribers. Prime shipping provides Amazon 3pl extra exposure, which immensely boosts their vast sales opportunity. Other third-party service providers can not rival this massive sale offered by Amazon 3pl.
2. Customer Support
Another added benefit of using Amazon’s FBA includes customer support which helps you handle complaints and queries as well as return logistics; This saves you the stress of having to deal with customers’ complaints. Also, Amazon 3pl guarantees expert services.
3. Transparent Fees and Multi-channel Fulfilment
Amazon offers a transparent fee structure so you can easily calculate costs to determine what your profits estimate. Additionally, Amazon offers multi-channel fulfilment, allowing you to fulfil orders from other sales channels using your inventory stored in Amazon distribution centres.
Cons of 3pl
Risk of mix-up
When Amazon ships your product, it might not be the exact product you shipped to Amazon. Amazon picks products from any warehouse nearest to the buyer and ships them for those not selling private label products.
Limited Order Customization
Amazon 3pl ships FBA products in Amazon-branded boxes with any custom packaging relating to your brand, reducing the impression of your brand. So, customers think they are buying directly from Amazon.
Amazon is your Competitor
There are chances that Amazon might be your competitor because Amazon is not just a 3pl. It also sells, ships, and markets its own products on an Amazon-owned platform, which is Amazon, your competitor.
