In-depth analysis of Amazon’s supply chain strategy: Detailed explanation of POD demand planning, pan-European planning and self-delivery Prime

Amazon POD demand planning: a new strategy to reduce inventory costs and risks

What is Amazon POD?

Amazon POD (PayPerOrder Demand) is a new strategy in Amazon’s supply chain, aiming to improve the efficiency and flexibility of the supply chain. Unlike traditional FBA (Fulfillment by Amazon), POD does not require sellers to pay storage fees in advance. Instead, after the customer places an order, Amazon pays the fee before Amazon delivers the inventory to the customer. This new model helps reduce sellers’ inventory costs and risks.

How to participate in Amazon’s POD demand program?

• Register an Amazon seller account: If you don’t have an Amazon seller account yet, you need to register one first. Register by visiting Amazon’s Seller Central website.
• Set Amazon POD options: After logging into Seller Center, navigate to Inventory Management, find POD options and set up and manage them.
• Create a product list: After setting the POD options, create a product list and add it to the seller account. Ensure product information is accurate and complete.
• Putting products on the shelves: Put the products on the Amazon platform to ensure they are visible and can be purchased by customers.
• Waiting for orders: When a customer places an order to purchase goods, Amazon will process the order according to the POD model, remove the goods from the warehouse, package and ship them, and pay the seller after completing the order.
• Track inventory: Track inventory in the Seller Center, understand the sales status and inventory levels of products, and adjust inventory management strategies as needed.

Benefits and considerations

Advantages

• Reduce financial pressure: Sellers only need to pay for the actual order and do not need to pay storage fees in advance, reducing the financial pressure of inventory management.
• Flexible inventory management: Sellers can manage their inventory more flexibly without having to plan and store large quantities of items in advance.
• Reduce inventory risk: Sellers can reduce inventory risk by paying fees only when an order is generated.
• Increase inventory turnover rate: POD is beneficial to increase inventory turnover rate, because sellers no longer need to wait for inventory to be sold before collecting funds.

Considerations

• Order processing fees: Although POD reduces storage fees, Amazon may charge higher order processing fees, which requires sellers to conduct a cost analysis.
• Meet Amazon requirements: Participating in the POD demand plan requires meeting some of Amazon’s requirements, including product quality, packaging requirements, etc.
• Manage inventory effectively: Although inventory management is more flexible, sellers still need to manage inventory effectively to ensure adequate supply of goods.
• Fierce competition: POD provides a lower threshold and competition may become more intense. Sellers need to develop effective market strategies to attract customers.

Starting Amazon’s Pan-European Plan: Key Steps and Requirements to Achieve Global Market Expansion

Starting the process of Amazon’s pan-European plan

• Register an Amazon merchant account: First, to open the Amazon Pan-European Program, you need to register a merchant account on Amazon. Make sure to choose a professional merchant account to get more selling tools and services.
• Prepare necessary documents: Before starting the Amazon Pan-European Plan, you need to prepare some necessary documents, including business registration certificates, tax certificates, etc. These documents may vary by country, but it is important to ensure that complete documentation is provided as required by Amazon.
• Select the Amazon Pan-European Plan: On your business account, choose to turn on the Amazon Pan-European Plan. In this step, you need to select your European market targeting and agree to Amazon’s Pan-European Program Agreement.
• Create a product list: Create a product list on your Amazon account to ensure that product information is accurate and detailed. Different countries may have different languages ​​and regulations, so make sure product information complies with each country’s specifications.
• Set price and freight: Develop reasonable price and freight policies based on market conditions in European countries. Flexibly adjust prices to attract local customers, taking into account each country’s currency and competition.
• Sell slowly: After the above process, you can start selling online. It is necessary to pay close attention to the sales performance of each European market and make adjustments and optimizations based on market feedback and data.

Requirements for opening Amazon’s pan-European layout

• Legally registered business: The first condition for starting the Amazon Pan-European Plan is that the business must be legally registered and be able to provide relevant business documents, including business registration certificates, tax certificates, etc.
• Competitive products: A company’s products must have certain competitiveness in order to stand out in the European market. It is necessary to consider the market demand and consumer preferences of each country and select attractive products.
• Good inventory management level: The pan-European plan involves inventory management in multiple countries. Enterprises should have good inventory management standards to ensure that the requirements of different countries are met in a timely manner and to avoid out-of-stock and slow sales.
• Follow Amazon’s requirements: Merchants need to follow Amazon’s business policies and requirements, including product quality, customer service, return policy, etc. Any violation may result in ban from the Pan-European Programme.
• Multi-language support: In order to provide users with good services in the European market, merchants need to provide multi-language support, including product information, customer service, etc.

Amazon Seller Fulfilled Prime Program: Improve competitiveness and save costs

Introduction to Seller Fulfilled Prime Program

With Seller-Fulfilled Prime, you can list your products as Prime-eligible and handle the shipping yourself. You can display the Prime mark on products that you ship directly to customers with next-day and free standard shipping. There is no fee to sign up for Seller Fulfilled Prime.

Requirements for joining the seller-fulfilled Prime program

• Seller accounts need to meet the following requirements
  • Sellers must be able to provide free 2-day delivery service (2 Days Shipping), and Member Express (Premium Shipping) is this service.
  • The seller’s FBM on-time delivery rate must be ≥99%, and the order cancellation rate must be <0.5%.
  • Use an Amazon-supported shipping company to ship products.
  • Strictly adhere to and enforce Amazon’s return policy.
  • Agree that Amazon is responsible for consumer services.

Passed the assessment period

If the seller’s account meets the above requirements, you can apply for the Seller Fulfilled Prime program. However, before the application is officially approved, the seller has a 90-day assessment period. During the 90-day assessment period, the seller will receive many Prime orders. Note: During the assessment period, although the seller can receive Prime orders, the Prime logo will not appear on the seller’s product page. The Prime logo will only appear after all indicators are fully up to standard during the assessment period.

Sellers who have been approved to join the Seller Fulfilled Prime program will be able to

• Provide Prime shipping benefits for Amazon Prime members.
• Buy shipping for all Prime products with Buy Shipping. According to information available to Amazon, the following fulfillment partners have adopted the Seller Fulfillment API to fulfill your Prime orders: ADSI, Jazva, M2E Pro – Amazon Magento Integration, OrderCup, Ordoro, RetailOps, SellerCloud, ShippingEasy, ShipRush, ShipStation, ShipWorks ,Skubana,SolidShip by Solid Commerce,Teapplix.
• Agree to abide by all shipping, returns, and customer service requirements applicable to Prime products.

Summary

Through the above content, we can see that Amazon’s POD demand plan, pan-European plan and self-delivery Prime plan each provide different advantages for sellers, and also present corresponding challenges. No matter what kind of plan it is, sellers need to make reasonable evaluation and selection based on their own circumstances.