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amazon fulfillment

Is Amazon the cheapest fulfillment center?

Amazon's fulfillment prices are often times very cost effective, but it is not always the best option for e-commerce sites.  Even though the prices and turn around times are low using Amazon for your fulfillment services may end up costing you more in the long run.

Amazon fulfillment is a great service for companies selling their product on Amazon who can take advantage of their prime network, but depending on the product, weight, shipping requirements, storage needs, and how the product is being purchased Amazon may not be the cheapest option.

When selling products on Amazon prime Amazon fulfillment charges will be per an item not per an order.  So if you were to have a client that purchased three of your products you would be paying shipping and handling on all three of these products as opposed to one order fee and shipping fee and additional pick and pack fees for the additional products.  This can add up, especially if you are trying to get customers to purchase multiple products.  Additionally Amazon's fulfillment and shipping fees may seem low, but orders placed on Amazon also have a referral fee which offsets some of the shipping and handling savings.

  Fulfillment by Amazon's Multi-Channel fulfillment services in which Amazon fulfills orders from other channels and websites is also not the cheapest option for fulfillment services.  For their multi-channel fulfillment services Amazon charges an order fee + pick and pack fee + a weight fee.  Shipping costs are baked into these calculations and are often more expensive than using carriers like USPS, UPS or Fedex, especially if you are able to negotiate rates.  Amazon does not specify their carriers and only offer standard, 2-day and next day shipping options, reducing flexibility to use your preferred carrier at your negotiated rates.

  Additionally all items sent to Amazon will need to be prepared in a very specific way to ensure that they are tracked and accounted for.  Complying with these standards will add additional labor and logistical costs to your order fulfillment.

Amazon's fulfillment services are innovative and accurate, but they are often times not the cheapest or best options for businesses, especially if you are not selling goods on Amazon. There are a number of factors to evaluate when selecting a fulfillment partner including price, accuracy, presentation, responsiveness, transparency, flexibility, branding, and packaging.  It is important to evaluate the factors most important to you and select a fulfillment center that can meet your needs.