Over the course of last few years, Amazon has done exceedingly well to enhance its market share in the ever-growing e-commerce industry. Owing to its exceptional seller-centric programs such as Fulfillment by Amazon (Amazon FBA) and Amazon Seller Fulfilled Prime, millions of merchants across the world have joined Amazon to reach out to a wider audience. One such feature that has got everyone on their toes in 2018 is Amazon FBA Onsite. In fact, the success of these business solutions has prompted Amazon to develop and experiment with new logistical features for Amazon merchants to capitalize on.
What Is FBA Onsite?
FBA Onsite is a cost-effective solution that is beneficial to both – Amazon and its merchants. Yes, we realize that this one sentence alone does not answer your question. However, in order to truly understand Amazon FBA Onsite, we need to revisit a couple of topics that you may already be familiar with.
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Amazon FBA And SFP
For a seller who is looking to list his business on Amazon, one of the most coveted features for him to have on his profile will be the Amazon Prime badge. This small yet mighty powerful logo when put next to the product listings can very well determine the course of your business. After all, customers prefer to buy products which are accompanied with the Prime badge owing to its numerous advantages like two-day free and simplified returns. Not only this, but Prime listings are ranked better in the search results.
For the longest time, the only way to get this Prime badge was to join the Amazon FBA program. As you may know, Fulfillment by Amazon is a logistical solution wherein sellers send their inventory to Amazon’s warehouses, also known as fulfillment centers, for them to store, pack, and ship your products whenever you receive an order. In addition to this, Amazon also provides customer support for your products.
By choosing Amazon FBA, you effectively allow Amazon to take care of the logistics of your business while you focus on other important matters. It goes without saying that all of these services come at a price, known as Amazon FBA fees.
Needless to mention, Amazon FBA is one of the most successful programs ever launched by Amazon. However, as its merchant base grew at a rather dramatic pace, the e-commerce giant encountered a new problem – the overload at its warehouse facilities. As more and more sellers joined its FBA network, Amazon started facing difficulties in storing their inventory.
Therefore, in a bid to ease this pressure, Amazon came up with a new solution known as Amazon Seller Fulfilled Prime, or Amazon SFP. Simply put, Amazon SFP enables merchants to store their products in their own warehouses and still have their products on Amazon listed with the Prime badge.
Seller Fulfilled Prime [SFP]
You can think of SFP as a way to get the Amazon Prime badge for your listings, without dealing with the FBA business or incurring those heavy charges.
Although Amazon Seller Fulfilled Prime proved to be a revolutionary logistical solution, it is by no means an easy feat to join this program. In order to ensure that their reputation does not take a hit by having the sellers deliver low-quality products or not even deliver on time, Amazon requires its potential SFP members to undergo a trial run for 5 to 90 days, depending on when they satisfy the stringent performance requirements.
In addition to this, those who do make it to the SFP program may have to shell out more money to deliver their products with the help of third-party logistics.
However, Amazon didn’t want to leave anything to chance and decided to work on it. The end result was a combination of Amazon FBA and Seller Fulfilled Prime which came to be known as FBA Onsite. Essentially, FBA Onsite is a warehouse management solution that eliminates storage fees, reduces overhead costs and most importantly, improves delivery time by addressing many shipping issues.
How Does Amazon FBA Onsite Work?
You can think of Amazon FBA Onsite as an expansion of the Seller Fulfilled Prime. Merchants and sellers, who store their inventory in their respective warehouses, have their warehouses optimized by Amazon’s warehouse experts. In turn, this optimization of the warehouse helps Amazon manage it better and fulfill the orders easily either through its own transportation network or third-party delivery services.
Allow us to simplify this further for you. Assume that you are a seller on Amazon who has been selected for the Amazon FBA Onsite program. You store your inventory in your own storehouse and up until you got selected for the FBA Onsite, you fulfilled the orders on your own. To get the Prime badge, you chose the Seller Fulfilled program since it was easier for you to store and ship the goods on your own.
With FBA Onsite, Amazon will help you choose an existing carrier that will get the product to the customer on time. You store your goods in your own warehouse and have Amazon use existing carriers to ship it out as and when you receive the orders. The hassle of choosing a delivery provider that will get your package to the customer on time falls on the able shoulders of Amazon, essentially transforming your warehouse into a Fulfillment Center with warehouse management software to help you manage your inventory better.
Lastly, Amazon will also oversee the delivery of your products, thus leaving you free for more crucial matters such as expansion and product offerings. On one hand, you get all the benefits of Amazon FBA without having to store your inventory in their fulfillment centers.
On the other hand, Amazon takes over the delivery process for you and ensures that its reputation does not suffer. It’s a win-win situation!
Advantages Of Amazon FBA Onsite
Since Amazon FBA Onsite brings the best out of Fulfillment by Amazon and Seller Fulfilled Prime, its advantages are truly the best of both worlds. These benefits have been illustrated below:
- Warehouse Optimization by Amazon’s Experts
There is very little doubt about the fact that Amazon handles millions of deliveries on a daily basis. To achieve maximum efficiency, they have optimized their warehouse centers keeping a plethora of factors in mind. Now, Amazon wants to do the same for your warehouse with its FBA Onsite program.
Amazon will visit your storehouse onsite and help you improve many parameters like the configuration and layout, methods for storing your inventory, methods for picking and packaging your products, order prioritizing, et cetera.
As mentioned earlier, it will also install warehouse management software to manage these entire processes better.
By shaping your warehouse into their own, it becomes easier for Amazon to deliver your products.
- Simplified Delivery
FBA Onsite provides the simplified delivery solution. This will help Sellers to store their goods in own warehouse and have Amazon use existing carriers to ship it out as and when you receive the orders.
- Excellent Shipping Options
With Amazon FBA Onsite, you will automatically join the esteemed group of Prime listings. Therefore, your products will fall under the purview of nationwide, 2-day Prime offer for a flat fulfillment rate and flexible same day shipping as well.
FBA Onsite Pro’s Include:
- Prime offers for Hazmat inventory
- Customer service
- Simplified returns
How To Be a Part Of Amazon FBA Onsite?
Unfortunately, as of May 2018, Amazon FBA Onsite is an invite-only program. In order to enjoy the benefits of this superb solution, you will have to be personally invited by Amazon to join it. However, this is a relatively new concept that is still taking shape.
New developments are likely to take place in this space and we advise you to follow this news closely, especially if you are a seller on Amazon. Given that it is still in its early stages, Amazon is likely to experiment with the FBA Onsite idea with a selected group of sellers and see where they could improve further.
Once it irons out all the wrinkles, we can expect them to take it to the next level.
Amazon, on its part, has cleverly solved its warehouse overloading problems by empowering the merchants and helping them manage their inventory better. This translates into Amazon is getting more warehouse space, all for the cost of delivering the products on the behalf of the sellers – something which Amazon has been doing all this while.
As for the sellers, with Amazon effectively taking over the inventory and logistics management for them, they can enjoy low shipping and delivery costs and boost their sales numbers.
However, all of this is still in theory. Only time will tell how well Amazon FBA Onsite will fare in comparison to its predecessors. Things are bound to get intriguing and we will bring you the latest developments on this front.