Online shopping may have replaced going to a brick-and-mortar store for many consumers, but that doesn’t mean shoppers are willing to wait weeks for their items to arrive. “In this day and age, consumer psychology is at war with Amazon, which wants you to believe that you should get your product on your doorstep within two days.” Mint New York Founder Marcus Milione Episode of Shopify MasterHis first-hand experience highlights how important it is for e-commerce businesses to have a fast and effective process for order fulfillment.
As part of Minted New York’s brand promise, Marcus ships products to customers within 24 hours of ordering. In doing so, Marcus has created a successful e-commerce company that meets customer expectations for high-quality products delivered quickly. In a competitive market where people expect their online purchases to arrive quickly, another option is for entrepreneurs to fulfill orders themselves using a direct fulfillment model.
Here we explain how direct fulfillment works and how you can reach new customers using the direct fulfillment program offered by Amazon.
What is direct fulfillment?
Direct fulfillment is a strategy in which a merchant, manufacturer, or vendor ships products directly to the customer. E-commerce companies that employ this strategy: Direct to Consumer (DTC) The distribution model processes customer orders and stores, picks, packs, and ships the purchased products.
Merchants can set up fulfillment centers directly in their own warehouse space or partner with distributors directly. Fulfillment Services Like this: Shopify Fulfillment Network—Shopify is a service that stores inventory and fulfills orders so that merchants can manage and monitor the process directly from their Shopify account.
In contrast, the indirect distribution model works in conjunction with an intermediary or third-party company, such as a distributor, wholesaler, or retailer, who fulfills the distributor’s orders. Drop Shipping In an indirect fulfillment model, retailers sell directly to customers and partner with a third party. Dropshipping Suppliers They process and ship orders for those customers.
What is Amazon Direct Fulfillment?
Amazon Direct Fulfillment is a program in which Amazon vendors fulfill orders for products sold and promoted by Amazon. The Amazon Direct Fulfillment program, formerly known as Amazon Dropship Central, was launched in response to supply chain issues during the COVID-19 pandemic.
When a customer orders a product within the Amazon Direct Fulfillment supply chain, Amazon processes the order and notifies the Amazon vendor. After the vendor receives the order information, it ships the order directly to the end customer. Amazon covers the shipping costs, including returns, and manages post-purchase customer service interactions. Meanwhile, the vendor stores, packs, and ships the purchased products to fulfill the order.
Amazon Direct Fulfillment and Fulfillment by Amazon
Although Amazon Direct Fulfillment and Fulfillment by Amazon (FBA) are both programs offered by Amazon, there are some key differences between them.
user
Amazon vendors (vendors who sell products to Amazon at wholesale prices for resale) use the Amazon Direct Fulfillment program, and sellers (vendors who sell products to consumers through Amazon’s marketplace) use the Fulfillment by Amazon program.
FBA is designed to allow Amazon sellers to store and ship their products in Amazon warehouses. Amazon Direct Fulfillment takes the opposite approach, where vendors help Amazon store and ship. The vendor handles the order fulfillment process, and Amazon is responsible for listing and marketing those products.
cost
Under the FBA program, Amazon purchases products in bulk from sellers, who pay the cost of packaging and shipping the products to Amazon warehouses.
In contrast, Amazon covers the shipping costs for vendors who use Amazon Direct Fulfillment. Vendors who participate in the Amazon Direct Fulfillment program only need to provide the fulfillment labor and packaging materials.
List Details
Amazon sellers who use FBA list products under their own brand name, so products often say “Fulfilled by Amazon and sold by (brand name)” and Amazon tends to prioritize FBA listings in search results.
In contrast, vendors who participate in Amazon’s Direct Fulfillment program handle order fulfillment for products listed as “Sold by Amazon.”
Advantages of Amazon Direct Fulfillment
Amazon Direct Fulfillment offers several unique benefits to sellers interested in setting up their own direct fulfillment operations.
No customer service or shipping fees
Businesses that use the Amazon Direct Fulfillment program have access to Amazon’s customer service and are responsible for post-purchase customer interactions and product returns. This feature of Amazon Direct Fulfillment frees up time to focus on other aspects of your business, such as: Product developmentstreamlined order fulfillment operations, and attractive Product packaging.
Amazon covers all shipping costs except for the cost of fulfillment labor and packaging materials. For businesses with streamlined order fulfillment processes, this arrangement can reduce expenses and increase profit margins.
More control over the order fulfillment process
Businesses that use Amazon Direct Fulfillment can manage their order fulfillment, allowing them to maintain quality control as their products are stored, packed, and shipped. Merchants with their own warehouse space can manage the order fulfillment process through Amazon Direct Fulfillment, and enjoy fast delivery and A memorable unboxing experience.
Additionally, Amazon Direct Fulfillment eliminates the additional step of sending products to an Amazon warehouse, eliminating an extra step in the fulfillment process and reducing supply chain issues.
Less risk of out-of-stock
Online retailers that use Amazon Direct Fulfillment can Stock keeping unit (SKU)— a code used to identify a particular product — and maintain proper stock levels in the warehouse.
Growing catalog
Online retailers can use Amazon Direct Fulfillment to list their entire inventory, not just products stored in Amazon warehouses. Instead of relying on Amazon’s product inventory capabilities, you can use Amazon Direct Fulfillment to list your entire product catalog and increase your overall sales.
How to Enroll in Amazon Direct Fulfillment
- Verify that you meet the eligibility requirements
- Sign up for Direct Fulfillment on Vendor Central
- Provide relevant information
- Upload your inventory
If you are already an Amazon vendor, submit a request through the Amazon Vendor Portal to gain access to Amazon’s Drop Ship Central and Direct Fulfillment. If you are not yet registered as an Amazon vendor, follow these easy registration steps:
1. Make sure you meet the eligibility requirements
Before you begin the process of setting up Amazon Direct Fulfillment, make sure you qualify for the program: you must be a registered Amazon Business in the United States and have your own warehouse space in the United States.
Your warehouse must have the capacity to accurately store, pick, pack and ship orders, keep your products and packaging in perfect condition, and read and accept Amazon’s terms and conditions.
2. Sign up for Direct Fulfillment on Vendor Central
Contact your Amazon Account Manager to request the application and set up your Amazon Vendor Central account. When setting up your Vendor Central account, ask your onboarding representative to check the Direct Fulfillment checkbox on your application. Once approved, you will receive an invitation to register in the Drop Ship Central portal where you will be able to manage your direct fulfillment orders.
3. Provide relevant information
When you enroll in the Direct Fulfillment program, you provide information about your order fulfillment operations, including warehouse information, business hours, carrier pickup times, and planned business holidays.
Decide what type of shipping label you want to use for your products. Depending on how you plan to market your brand and product packaging, choose Amazon shipping labels or your own shipping labels.
4. Upload your inventory
Once your application is approved and you’ve completed setting up your Vendor Central Portal, Amazon will send you instructions on how to upload your inventory information to the portal. Amazon typically sends this information within 48 hours of application submission and approval.
Once you’ve uploaded your entire inventory, you enter your information into the system and Amazon will list your products on their marketplace.
Direct fulfillment FAQ
What are the alternatives to Amazon Direct Fulfillment?
What is Amazon Direct Fulfillment?
Amazon Direct Fulfillment is a program offered by Amazon whereby vendors handle order fulfillment for products that Amazon lists, markets, and sells on Amazon’s platform.
Are Amazon warehouses the same as fulfillment centers?
An Amazon warehouse is a type of fulfillment center that buys products wholesale from retailers and fulfills orders purchased on Amazon’s marketplace.
