Amazon inadvertently created intrigue once again with FBA Onsite. Towards the end of 2017, the company invited about 50 of its marketplace partner merchants to test the new system. Amazon FBA Onsite caused UPS and FedEx to be concerned they might be losing customers. The world of eCommerce was abuzz about what Amazon was brewing. When one of the invited sellers divulged key features of the said system in Amazon’s own seller forum, the topic exploded.
What is Amazon FBA Onsite
Although tight-lipped as usual, Amazon eventually provided some background on Amazon FBA Onsite. The company shed light on the new feature, reporting that it launched a cost-effective tool that is both favorable to its third party sellers and to Amazon itself. It is known as FBA Onsite. FBA Onsite is warehouse management software that provides third party sellers with faster and simpler shipping, plus delivery logistics at a cheaper cost. It is actually a composite but simplified version of SFP and FBA.
Third-party sellers and independent merchants under Fulfillment by Amazon send their inventory to Amazon warehouses for storage, packing, and delivery, and pay commissions on every sale. These sellers and merchants also pay additional fees for product handling in order for the same to be eligible for the free two-day shipping offered through the Amazon Prime membership program. This ensures quick product delivery to customers and thereby increases the demand for the service.
Lately, however, Amazon has been experiencing an overload at its warehouse facilities. In order to decongest product inventory, Amazon introduced SFP or “Seller Fulfilled Prime”. This lets select merchants keep inventory in their own warehouses and still have their products listed on Amazon as Prime eligible. Amazon still requires sellers to deliver products quickly, of course, so merchants have to shell out more for the SFP service.
With FBA Onsite, Amazon not only increases inventory without the hassle, but also shortens delivery time and cuts costs by removing storage fees, reducing inbound shipping payments and literally taking over the last-mile delivery chain. It’s a win-win situation.
How FBA Onsite Works
Most importantly, FBA Onsite has made it possible for sellers and vendors to set up their own warehouses in their respective locations. They no longer have to ship their products to an Amazon warehouse for storage purposes under SFP or FBA. Sellers and vendors can now have complete control over their inventory with FBA Onsite, at least in terms of restocking and removal of products.
Through FBA Onsite, Amazon still helps in managing the nitty gritty of fulfillment and literally does most of the tedious legwork. FBA Onsite takes care of picking up the product from the seller’s or vendor’s warehouse and figures the best way for the product to reach the customer. It either uses Amazon’s own fulfillment network or avails of third party delivery services. In order to do this, FBA Onsite needs to set up the onsite warehouse as sort of Amazon fulfillment center annex, then install the proper warehouse management software on the local servers. Better still, Amazon also handles customer service and troubleshooting for FBA Onsite should anything come up during the delivery process.
Is Amazon FBA Onsite Right for Your Business?
What’s in it for Sellers:
At last, a faster, cheaper, more efficient alternative for current and future sellers has become possible with FBA Onsite.
Sellers avail of the following advantages under FBA Onsite:
- A Nationwide, 2-day Prime offer for a flat fulfillment rate
- Fast and easy set-up with Amazon’s FBA Onsite WMS
- Immediate, no-cost inventory receipt and removal
- Integration with previously FBA-only programs like Subscribe and Save and Small and Light
- Simplified returns
- Prime offers for Hazmat inventory
- Flexible same-day shipping SLA
This translates to sellers enjoying low shipping and delivery costs and hassle-free logistics while they also get to control their product inventory. Simply put, they get to focus on running and growing their business. For sellers who have been hassled by shipping and delivery issues, this feature further lightens that burden with Amazon taking care of customer service during the delivery process.
Business Insider adds that the program, in a way, commissions third party sellers to function like an Amazon warehouse to meet the rigid customer requirements guaranteed by Prime membership. FBA Onsite provides such a flawless buying experience for Amazon Prime members that they wouldn’t know the difference whether they are buying from a third party seller or Amazon itself.
On the part of Amazon, the FBA Onsite program signifies more warehouse space, a potential increase of independent merchant partners with products that qualify for Amazon’s Prime shipping program, and an opportunity to reinforce an already solid reputation for its reliable service. Amazon continually strives to be more effective and to continue to be more dependable in its speedy delivery. The company is now taking the next steps in expanding its shipping and delivery service by establishing its own air, trucking, and delivery fleet. Plus, since it remains in control of all the logistics anyway, the company is preparing to use delivery drones in the near future.
So, is FBA Onsite right for your business? If you are a business looking to save time and money without the hassles of shipping and delivery logistics while still being able to satisfy customers with punctual delivery, then FBA Onsite is absolutely right for you.