By Gina DeFrank
Selling online can be a lucrative business, and can assist retailers in taking their companies to the next level. One of the most crucial pieces of the online retail puzzle is ensuring that customers receive their orders efficiently, and on time. Having this part of the process run smoothly is vital to establishing credibility as an online merchant, as well as building customer loyalty. A major trend in the industry involves retailers entrusting the complex process of fulfillment to third party professionals, such as Fulfillment by Amazon (FBA).
How does FBA work?
FBA is Amazon’s method of streamlining the fulfillment process and ensuring customer satisfaction. When working with FBA, retailers send their products to one or more of Amazon’s designated fulfillment centers, and the firm picks, packages and ships those products to customers. Amazon is even tasked with handling customer service situations that arise during the shipping process
There are several benefits to working with FBA. By choosing to use a third party for fulfillment, retailers can significantly reduce the time, cost and effort involved with managing the logistics of storing inventory, as well as processing and shipping orders. In addition to convenience, third party fulfillment gives retailers an opportunity to expand their online businesses globally, with immediate access to international markets and customers.
Winning the buy box
FBA can also provide improved access to the “Buy Box,” the box on a product detail page where customers start the purchase process by adding items to their shopping carts. A survey conducted by Amazon.com reports that merchants have seen a lift in sales just by having their items available via FBA, versus fulfilling orders themselves. Customers have come to count on Amazon’s shipping and delivery services, and retailers can gain credibility with this offering.
Access to Amazon Prime members
Amazon Prime is a huge market that retailers have access to with FBA. Retailers who use FBA automatically become eligible for Free Super Saver Shipping, a promotion that targets Amazon Prime members. Amazon reports that more than one million customers around the world became new Prime members in the third week in December 2013. That significantly increases the number of Amazon shoppers that are able to filter search results by Prime eligible offers, providing a further leg up for retailers who offer Prime eligible shipping.
Streamlined shipping
With Amazon taking care of dispatch on retailers’ behalf, retailers are able to reduce how frequently they are shipping products overseas. Additionally, Amazon lets retailers know (far in advance) the costs of storage and delivery associated with FBA. Above all else, being able to offer multiple delivery services is the biggest advantage for retailers.
Third party fulfillment can be a valuable tool for retailers. By taking the guesswork out of fulfillment, Amazon allows retailers to devote time to other elements of their business, while building credibility and positive associations through the reliability of the service.
Gina DeFrank is the product manager for Marketplaces at ChannelAdvisor, responsible for research and product direction for third-party marketplaces such as Amazon and Rakuten. She works closely with marketplaces, retailers, and ChannelAdvisor teams to keep current with channel developments, and to optimize existing features for ChannelAdvisor customers. For more information, visit channeladvisor.com.