COVID-19 is causing unprecedented chaos all around the world. And Amazon's FBA service is not immune.
The retail giant recently suspended all "non-essential" deliveries to its warehouses in order to prioritize medical supplies and household staples.
But this has effectively caused a plethora of third-party sellers to temporarily cease trading until either:
- Amazon lifts its delivery ban.
- An alternative fulfillment method is found.
So let's take a look at the top Amazon FBA alternatives sellers might want to switch to in order to take back control of their fulfillment situation.
What's happening with Amazon FBA & COVID-19?
Amazon is blocking all shipments of non-essential products to its fulfillment centers in response to drastic changes in shopper behavior since the coronavirus outbreak. The current estimate is that this will be in effect until April 5th 2020.
"Non-essential" means anything outside the following categories:
- Baby products.
- Health and household (including personal-care appliances).
- Beauty and personal care.
- Industrial and scientific.
- Pet supplies.
Sellers will not be able to replenish their Amazon FBA stock until at least April 5th, unless items being sold are within these six categories.
You will be able to continue making sales and taking orders on Amazon for any kind of product. But when your FBA stocks run out, you'll need to either wait or use one of the Amazon FBA alternatives below.
Want more Amazon inventory tips? See our guide Amazon Inventory Management: How to Replenish & Track Your Amazon Inventory!
Amazon FBA alternatives #1: Switch to FBM
Amazon FBM (Fulfillment By Merchant) is pretty much what it says on the tin - where you the seller take complete control of handling and shipping your Amazon orders.
This means no shipping stock to an Amazon FBA center, and therefore none of the fees involved with this.
But you will need some kind of appropriate warehouse or storage facility of your own. Plus, you'll be in complete charge of purchasing inventory, managing inventory and putting systems in place to pick, pack and ship orders.
Advantages of FBM
- Seller maintains complete control of the fulfillment experience.
- Profit margins can be better due to no Amazon FBA fees.
- Seller is protected from Amazon policy changes (such as the current coronavirus embargo on certain products).
- Easier to build a genuine ecommerce brand.
Disadvantages of FBM
- Added overheads of having your own fulfillment facility.
- Will likely need to train and pay a team of pickers and packers.
- More cash invested upfront, meaning more to lose if business fails.
Multichannel retailers using FBA to fulfill Amazon orders, but also have a self-fulfillment operation of their own set up to deal with orders from other channels.
Highly successful Amazon sellers who know they have a reliable set of products selling well on Amazon. Making it a much safer bet to open up a self-fulfillment facility.
Note: It's highly recommended to use a tool like Veeqo to manage inventory, orders and shipping if going down the FBM route.
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Amazon FBA alternatives #2: Switch to SFP
Amazon SFP (Seller Fulfilled Prime) is a version of FBM where the seller adheres to specific standards in order to receive the Prime badge on Amazon listings:
The Prime badge can be a huge driver of sales on Amazon.
But the quality standards for entry are extremely high, and Amazon monitors performance closely.
Fulfilling on Amazon? Check out Amazon Seller Fulfilled Prime: Everything You Need to Know!
Advantages of SFP
- All advantages of FBM mentioned above.
- Prime badge on Amazon listings can be a phenomenal driver in sales.
Disadvantages of SFP
- Must maintain incredibly high fulfillment standards from your own facility.
Highly successful Amazon sellers who already have the fulfillment infrastructure in place to meet Amazon Prime standards.
Check out Veeqo Seller Fulfilled Prime Integration for more help!
Amazon FBA alternatives #3: Use a 3PL service
A 3PL (third-party logistics) service is where you purchase and send stock to a third-party for them to store inventory and fulfill orders on your behalf. FBA itself is effectively a 3PL service intended for Amazon sellers.
There are plenty of Amazon FBA alternatives out there in the form of standard 3PL services. These can also usually be used to ship orders from channels other than Amazon.
3PL service options
There's a wide range of 3PL services to choose from. The first point of call should be that the provider has a warehouse in the country you are primarily selling in.
After that, it's down to individual requirements of your business.
Here are a few popular options:
Advantages of a 3PL
- Avoid leases and overheads associated with your own warehouse.
- Can mean lower shipping costs compared to self-fulfillment.
- Protected from Amazon FBA policy changes without the expense of your own warehouse.
Disadvantages of a 3PL
- Not in full control of the fulfillment experience.
- Relinquish the guaranteed 'Prime experience' that comes with Amazon FBA.
- Can be hard to fulfill to SFP standards and maintain the Prime badge.
- Adding a third party between you and customers can create complications when communicating.
Successful Amazon and/or multichannel retailers who don't rely on Prime orders and want more freedom than FBA allows, but also aren't yet ready for a warehouse of their own.
The coronavirus outbreak has brought testing times for the worldwide economy as a whole. And the Amazon FBA embargo has effectively blocked some sellers from conducting business altogether.
But if you've been affected, the FBA alternatives in this post should help put you in a position to start making sales again as soon as possible. If you are interested in taking your warehouse management to the next level, why not take a look at our guide to warehouse management systems.