For most Amazon sellers, they either ship by FBA or ship by themselves. Amazon, by tilting traffic, makes sellers more inclined to choose FBA services. However, logistics costs have always been a problem for sellers doing cross-border e-commerce. Coupled with the introduction of new FBA warehousing regulations in 2018, sellers have a hard time. If you want to save logistics costs, the editor believes that it is necessary for sellers to understand the logistics methods first.
1. FBM
FBM stands for Fulfilment by Merchant, which means that the seller ships the goods by himself. Amazon only serves as a sales platform. Sellers need to use third-party express services such as postal parcels, international express, and dedicated lines to deliver to buyers.
FBM has many advantages, such as:
1. It can guarantee to a large extent that the goods shipped are completely safe, and the product accessories and gifts carried can be temporarily arranged for inspection or addition.
2. The delivery method is flexible and changeable, and you can choose to ship by postal parcels, international dedicated lines, international express, and overseas warehousing and delivery modes.
3. For small sellers, if they dare not prepare too much goods in the early stage, FBM delivery is a better choice.
4. For many goods, such as large and heavy goods, it is very uneconomical to use FBA to ship. Choosing FBM for delivery is a very good choice.
So how can self-shipping sellers reduce costs?
It is recommended that sellers join the Amazon SFP program, and the goods can also have the Prime logo. It has the same delivery service as FBA delivery. After joining the SFP program, sellers can use Amazon’s logistics for last-mile delivery. Amazon will give sellers a logistics bill, which is equivalent to using FBA to ship, but the shipping cost will be much lower than FBA.
Sellers can send goods to overseas warehouses for storage in advance, and the storage fee will also be much cheaper than the FBA warehouse. When the order is generated, the overseas warehouse’s work agent can pack and ship it.
2. FBA
FBA (Fulfillment by Amazon) means that the seller sends the inventory of the products sold on Amazon directly to the warehouse of Amazon’s local market. When the customer places an order, the Amazon system will automatically complete the subsequent delivery. FBA has its unique advantages:
1. Customers receive the goods very quickly, and the delivery methods available are flexible and changeable.
2. Amazon will help buyers solve the dissatisfied feedback caused by logistics problems, and the account security is high.
3. Consumers are more willing to buy FBA products than other delivery methods.
4. Amazon will take special care of sellers using FBA. (For example: help to obtain shopping carts, improve Listing rankings, etc.)
However, in general, the shipping cost of FBA will be very high. In addition, buyers can return the goods without reason within 7 days, and there will be no communication with the seller during this period. Amazon stipulates that the same label barcode cannot be returned to the warehouse within half a year after the return. Once the phenomenon of return or exchange occurs, the goods can only be destroyed on the spot.
So, how can FBA sellers reduce costs?
It is recommended that sellers use FBA in conjunction with overseas warehouses. Sellers can transport goods to overseas warehouses in batches by sea freight. When replenishment is needed, they can directly ship replenishment from overseas warehouses to FBA warehouses. The cost of the first leg is saved to the greatest extent. At the same time, the storage fee for goods stored in overseas warehouses will be much cheaper than that of FBA warehouses.
When there is a problem of return or exchange, the goods can be returned to the overseas warehouse, the labels can be replaced in the overseas warehouse, and the goods can be returned to the warehouse for sale. This is the most effective solution to the return problem.
Regardless of the delivery method, sellers need to weigh the pros and cons according to their actual situation. High cost performance is the basis for choosing a delivery method.