While logistics costs are unavoidable, picking, packing, and shipping are all costs. But the way you choose can make a big difference in terms of cost. Today I will tell you about several modes of Amazon logistics and how to save money.
Amazon's logistics are mainly divided into three ways: FBA, FBM (self-delivery), third-party (outsourcing)
Fulfillment by Amazon:
FBA (Fulfillment by Amazon), Amazon's self-built logistics warehousing service. One-stop service package for warehousing, picking, packing, distribution, collection, and return processing. The seller only needs to send the goods to the Amazon warehouse, the buyer places the order, and the Amazon warehouse will automatically package and ship it to you.
Shipping with FBA is the easiest way because you just ship your products to Amazon fulfillment centers and Amazon employees handle the rest. But Amazon also charges you storage and fulfillment fees, which vary based on the product's size, weight, and dwell time. Inventory costs can also vary at different times of the year, with fluctuations in low and high seasons.
In terms of advantages, FBA logistics is fast, and the platform will also provide support, reducing a lot of workload for sellers. But the cost is too great. Stocking and arranging goods is a huge cost. Storage, ordering, packing and weighing are all subject to charges. There is also a handling fee for bringing products out of the FBA warehouse. The initial investment cost is relatively large, and it is not recommended for inexperienced newcomers, especially those who start a business at a low cost.
Self-delivery means that the seller is responsible for warehousing, picking, packaging, distribution and other operations after receiving the order, and sends it directly to the customer from the local area. Meanwhile, the seller is in charge of the entire operation.
In the self-investment model, the pressure on natural capital is not large, and the risk is relatively small. At the same time, your capital turnover rate has also increased, and you can have more initiative in business operations. Prices will be better with better partnerships with warehouses, packaging suppliers and logistics companies.
But the disadvantage is that it wastes too much time and energy, and all the operations of the entire delivery and return must be done by yourself. Beginners can practice their hands in FBM mode at the beginning.
It is understandable that logistics service providers provide services similar to Amazon FBA logistics, reduce logistics costs, speed up logistics timeliness, and help develop local markets. Fees are slightly lower than FBA.
Transferring logistics to a third party can effectively improve the profit margin of a single product; centralized transportation also reduces logistics management costs; at the same time, the supply chain of good service providers is also very stable, and delivery is on time, more and more sellers choose this kind of model.
But the difficulty is that the service quality of logistics service providers is uneven, and it is difficult to find reliable ones. There are many large and small agents at all levels, and the service is more difficult to guarantee.
You also have to be wary of the "low price trap". Some merchants deceive your goods at a low price from the beginning, and various fees will be incurred after the goods arrive. Or it was said to be air freight at the beginning, but the goods are actually floating at sea. If there are promotions or activities, the goods there cannot be supplied, and the goods here cannot pass, which will stifle the popularity.
Big sales have funds, large quantities, no problem with FBA, and beginners start with FBM, so how should our small and medium-sized sellers choose? PNP cross-border e-commerce can help you!
The PNPLINE system connects hundreds of logistics providers with our long-term cooperation, skips all middlemen, and small and medium-sized sellers with small shipments can also get the best prices. And all logistics costs are completely transparent, which is convenient for sellers to choose the most suitable logistics service for themselves.
We have established our own overseas warehouse, including return processing, label change and secondary delivery. Warehousing, etc.
From the logistics management department to the independent logistics team currently serving several branches across the country, we have been making progress. The logistics information of all orders is updated synchronously, and the logistics situation is tracked in real time. It is convenient for decision-making such as replenishment and stocking.