Resources / How to Fulfill on Amazon and eBay

Chapter 4

How to Fulfill on Amazon and eBay

If you’re wondering how to fulfill your orders on Amazon, then the first thing you need to know is that you have three main options:

  1. Fulfillment by Amazon (FBA)

  2. Fulfillment by Merchant (FBM)

  3. Seller Fulfilled Prime (SFP)

Fulfillment by Amazon (FBA)

If you opt for FBA, then Amazon will manage all the picking, packing and shipping of orders on your behalf, as well as the customer service and returns management side of the process.

Pros

  • Speed: Amazon leads the way when it comes to fast shipping and customer service, which your customers would also benefit from.

  • Access to Prime customers: FBA merchants can actively market to Amazon’s 100+ million Prime members, usually resulting in increased sales.

  • Amazon Buy Box: FBA merchants also have a greater chance of winning the Amazon Buy Box compared with other sellers, also usually resulting in increased sales.

Check out our video below for more advice on how to win the Amazon Buy Box:

Cons

  • Inventory management: Amazon will charge additional fees for products that are held in their distribution centers for long periods of time. To reduce the risk of this happening, you’ll need to sell products within about 6 months.

  • Fees: Amazon reserves every right to increase their fees at any time; you’ll need to offset this with the benefits you receive from using FBA to ensure it’s still a profitable ecommerce fulfillment model for you.

Fulfillment by Merchant (FBM)

If you opt for FBM, then you’ll be responsible for the picking, packing and shipping of orders yourself, alongside customer service, returns management and inventory updates.

Pros

  • Brand control: As you’ll be packing and shipping your own items, you’ll have full control over how your packages look, including any personalization you’d like to add.

  • Customer service: Although you’ll need to hire customer service staff, you’ll also have complete control over the experience your customers receive.

Cons

  • Time consuming: Packing your own items is both time consuming and labor intensive, especially as your business grows.

  • Inventory management: You’ll need to be fully in control of your inventory levels; just a couple of mistakes on Amazon could see an end to your selling on this popular marketplace. You should budget for a robust inventory management system that integrates with Amazon to avoid this from happening to you.

  • Limited marketing potential: FBA merchants usually get promoted above FBM merchants, such as within search results. This can limit how many customers see and ultimately buy your products.

Seller Fulfilled Prime (SFP)

SFP is often cited as the best of both worlds; in other words, it takes the best parts of both FBA and FBM and puts them together. Similarly to Fulfillment by Merchant, you’ll be responsible for processing and shipping orders, as well as handling any customer service issues or enquiries that arise. And akin to Fulfillment by Amazon, you’ll also be able to sell to Amazon Prime members.

Pros

  • Brand control: You’ll have full control over how your packages look, including any personalization you’d like to add.

  • Customer service: You’ll also have complete control over the experience your customers receive when they contact your company.

  • Cost: You’ll avoid the high costs associated with Amazon fulfillment, yet still be able to reach the wider Amazon audience.

Cons

  • Huge competition: Amazon is picky over who they let participate in the SFP program. You’ll need to adhere to a strict list of requirements including maintaining an on-time shipment record of at least 99% and maintaining a cancelation rate of less than 1% during an assessed trial period. To succeed in this fulfillment method, you’ll need to purchase reliable inventory management software for Amazon.

How to Fulfill on eBay

Unlike Amazon, eBay doesn’t have its own in-house fulfillment network. A few years ago, they did trial a fulfillment center, which has since become part of a larger outsourced fulfillment company.

Today, this means you have four options for fulfilling orders on eBay:

  1. Manual updates in eBay

  2. Fulfillment by Amazon (FBA)

  3. eBay fulfillment partners

  4. Order management software

Manual Updates in eBay

This option means that you’ll control your entire fulfillment process through eBay itself manually. This is often how eBay sellers first start out, but this method becomes time consuming and risky as the business grows and you start selling on other channels.

Pros

  • Lower upfront costs: When starting out on eBay, you’ll have lower upfront costs; your main costs to consider aside from buying inventory are eBay fees and the cost of shipping orders.

Note: Once your business starts growing and processing more than 100 orders a day, you may find that these lower costs can’t be offset against any damage done to your business through overselling and slow shipping; thus, you’ll likely need to source a different solution for fulfilling eBay orders. Read more about your other options below.

Cons

  • Risks of overselling: By updating inventory manually, you run a high chance of falling behind on orders, especially as your business grows, potentially resulting in selling items that are actually out of stock.

  • Labor intensive: You’ll likely need to hire a full-time eBay administrator in order to keep up with customer demand as manual updates are both time consuming and labor intensive.

  • Slow time to ship: If handling hundreds of orders per day, your time to ship and dispatch times will likely start declining, seriously affecting customer satisfaction (and your eBay ratings!)

Fulfillment by Amazon (FBA) For eBay Orders

Amazon allows its sellers to select an FBA multichannel fulfillment option within Seller Central, which allows you to use their fulfillment centers for eBay orders and even those that come from a separate webstore, as well as your Amazon orders.

Note: For both eBay and your website, customer service and returns must be handled by your company as Amazon won’t have access to that side of things.

Pros

  • Speed: Amazon leads the way when it comes to fast shipping and dispatch times, which your customers (even eBay ones) would also benefit from.

  • Increased customer satisfaction: Fast shipping and dispatch times result in happier customers who are also more likely to leave a positive review.

  • Access to a global fulfillment network: With distribution centers across the globe, you’ll reduce the effort and time involved in selling internationally, potentially resulting in increased revenue for your business.

Cons

  • Amazon branded packaging: Orders will arrive with your customers in Amazon branded packaging, potentially causing customers to price-check and compare on the Amazon platform for future orders. You can pay an additional $1 per item for non-branded packaging, however this leads to…

  • Lack of brand awareness: Whether orders are shipped in Amazon packaging, or non-branded packaging, either way, you’ll be unable to use this part of the process as a way of boosting brand awareness.

  • Inventory management: Amazon charges additional fees for any products that are held in their distribution centers for long periods of time. To reduce this risk, you’ll need to sell and move your products within approximately 6 months.

  • Fees: Amazon charges a premium to fulfill orders that haven’t been bought through Amazon itself, plus Amazon reserves the right to increase their fees at any time. You’ll need to offset all of this against the benefits you receive from using FBA to ensure it’s still a profitable eBay fulfillment model.

eBay Fulfillment Partners

Aside from FBA, there are a number of other recognized eBay partners you can use to help you with your eBay fulfillment; with two of the most well known companies being Selery and Radial. Using a fulfillment partner with your eBay store is another method of outsourcing your order fulfillment, much as the same as you would do via a 3PL for your other ecommerce channels.

Pros

  • Negotiated rates: eBay fulfillment partners will be working with a number of merchants at the same time as you, which means they’ll be more likely to negotiate discounted shipping and courier rates (savings which can be passed on to you) due to the sheer volume of orders they’re shipping.

  • Save time: By leaving someone else to do the grunt work involved in packing and shipping orders, you’ll instantly save time; time that could be better spent on sales and marketing initiatives instead.

  • Experience: Good fulfillment partners have a wealth of experience when it comes to the order fulfillment process, ensuring your customers receive orders quickly.

Cons

  • Lack of control: Your fulfillment provider will have their own workflows in place, which means you’ll have little to no say in how your orders are delivered. There is sometimes an opportunity to negotiate specific conditions for your orders but you’ll likely need to pay a premium for it.

  • Quality risks: Your fulfillment partner also owns and controls the final handoff of value to your customers; heavily impacting your customer satisfaction levels one way or another. Be sure to do your due diligence and choose a trusted provider.

Order Management Software

Once businesses start selling beyond eBay and Amazon, implementing order management software that integrates with eBay is the most logical next step. You’ll be able to fulfill and ship orders from one centralized system, and update inventory levels across all your channels as well. This removes a lot of the manual legwork often associated with online order fulfillment, while reducing the risks of overselling; a common challenge for most multichannel businesses.

Pros

  • Speed: Instant eBay order download, automatic fulfillment and streamlined shipping integrations all result in a reduced time to ship for your customers.

  • Inventory management: Real-time inventory management, across channels, ensures you eliminate the risks of overselling and eBay penalties.

  • Eliminate human error: The use of technology in your business reduces admin time and eliminates the risk of human error.

  • Increased customer satisfaction: A combined result of fast dispatch, up-to-date inventory levels and no human error means you’ll gain happier customers, who are more willing to leave a positive review.

  • Multichannel capability: With order management software, your orders will download into one centralized system, regardless of which channel they’re from. This opens up a whole world of multichannel opportunity for your business.

  • Additional retail functionality: Alongside order and inventory management, even the most basic of OMS software will have additional retail functionality your business can get value from, such as increased reporting functionality, pricing management and purchase ordering. While more advanced systems, like Brightpearl, will offer even more functionality than this, such as automation, inventory planning, warehouse management and even an integrated point of sale.

Cons

  • Not always industry specific: Some order management systems aren’t designed just for retailers and wholesalers; many cater to a range of industry types including services, media and publishing and manufacturing among others. What this means is that you could be potentially paying for features you don’t need, while not receiving specialist technical support for your industry and unique business type.

  • Lacking in-house ecommerce integrations: Non-specialist order management systems are also unlikely to have their own in-house ecommerce integrations, which means you could be both lacking in functionality and support you need, as well as budgeting for extra costs for a custom-built integration or third party connector. Be sure to do your due diligence to find an OMS that has been designed and built for retailers in order to receive the benefits we mentioned earlier.

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