Amazon's three logistics models

Amazon's three logistics models

Today, the three logistics models of Amazon are sorted out, as well as detailed precautions for everyone to understand and reference. (Remember to collect!)

I. Delivery method

It is mainly divided into three ways: FBA, overseas warehouse, spontaneous cargo

① Amazon FBA: In 2007, Amazon introduced Fulfillment by Amazon (FBA) service, which belongs to Amazon's self-built logistics warehouse service, providing buyers with: warehousing, picking, packaging, distribution, collection, return processing, etc. Sellers send their inventory of products sold on Amazon directly to the warehouse of Amazon's local market, and when customers place an order, the Amazon system automatically completes the subsequent shipment, and Amazon charges the service fee.

② Overseas warehouse: also called third-party overseas warehouse service. Due to geographical, product cost and other reasons, cross-border e-commerce export sellers in order to improve the ability to deliver orders in foreign areas close to buyers set up overseas as warehousing logistics nodes, usually with overseas goods storage, circulation and processing, local distribution, and after-sales service and other functions.

③ Spontaneous goods: literally means that after receiving an order, the seller is responsible for warehousing, picking, packaging, distribution and other operations, from the domestic direct mail to foreign customers, and the whole operation is responsible for the seller.

2. Advantages and disadvantages

The advantages of FBA

1. It can improve the exposure rate and listing ranking of stores.

2. The warehouse is spread all over the world, intelligent management, low loss rate of goods, low customer complaint rate of distribution.

3. Fast delivery time and good user experience. 

4. Can delete the logistics negative reviews to avoid logistics disputes with the seller.

5. Eliminate products with a unit price of more than $300 to reduce costs.

Weaknesses of FBA

1. The delivery cost is slightly higher than other delivery methods, and the preparation cost is high.

2. If the product cannot be sold, it needs to pay high storage costs.

3.FBA warehouse will not provide customs clearance service for the seller's first shipment.

4. No control over storage, picking, packaging and shipping methods.

5. The return address is only available in the US (if you are an FBA on a US site).

6. Amazon unconditional return service, the return rate of buyers is easy to rise, thereby increasing the cost of goods.

Advantages of overseas warehouse

1. Compared with Amazon FBA, the cost is lower, effectively improving the profit of a single product;

2. It can save the time used for customs clearance, shorten the transportation time, and adjust the logistics status in the overseas warehouse to speed up the timeliness of logistics.

Disadvantages of overseas warehouse

1. Due to the centralized transportation mode, the inventory pressure is large, the risk rate of inventory overstocking is high, and it is difficult to sell inventory.

2. It is necessary to pay the overseas storage fee, which is included in the seller's cost.

Advantages of spontaneous cargo

1. Can match the quantity, control the delivery cost, delivery time, high flexibility, no inventory pressure.

2. Low storage cost can reduce the cost of pressing goods, reduce the risk rate, and improve the seller's capital turnover rate.

3. Wide selection range, not subject to FBA product policy restrictions, can be more flexible selection, to get more sales.

4. You can take more initiative in the operation, and you can add personalized product packaging to further consolidate your brand image, such as some thank you emails and small gifts.

The disadvantage of spontaneous cargo

1. If products don't meet Prime standards, it may be difficult to compete to Buy Box, and Amazon prefers FBA home.

2. The seller may cause bad reviews or disputes due to imperfect logistics channel services.

3. The exposure and ranking of the listing of spontaneous goods are not as much as that given by Amazon FBA

You can choose which delivery method to go according to your inventory and funds and actual needs