Can you validate these assumptions I made about FBA?

11 replies
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I am with a 3PL shipping and fulfillment company that is looking to bring on Amazon sellers as an alternative to FBA. I wrote this blog post to identify some of the cost differences and risks that come with commingling but because I'm not an Amazon seller, I don't have first hand knowledge of working with FBA. Can anyone tell me if my claims about FBA are accurate or are they way off base?


....FBA's pricing structure can be complicated and hard to understand. FBA charges a per order transaction fee, a per unit shipped fee and a handling charge based on weight. Additionally FBA charges storage based on cubic meters and their storage prices go way up during the Christmas season. When you are fighting for list results against a horde of similar priced products, not having a firm grasp of your fulfillment costs will either cause you to price yourself out of the market or lose money on every order. Our easy to understand Flat Rate per order model makes your fulfillment costs simple to understand and is guaranteed to save you money.
One of the biggest risks with fulfilling your products on FBA is commingling. What many online retailers do not understand is that when you ship your product to FBA, unless you provide a pre-printed Amazon label on every unit you send, your product gets added to a massive pool of similarly described product. Let's say you list a nutritional supplement and ship your product to the nearest FBA in Texas. If someone in Florida buys from you, Amazon checks the UPC code and finds somebody else's product located in a Florida FBA facility and ships their product instead. You still get the sale and the customer saves a day in shipping except when the customer receives the package he might find the product is past it's expiry date, or the labelling is different from your listing or, in a worst-case scenario, the product is counterfeit.
You have absolutely no control over FBA's supply chain and your online reputation can be damaged by unfair seller reviews or customer complaints. The only way to avoid this is to print Amazon's proprietary labels on every single unit you ship to FBA which can be very man-power and cost prohibitive. With us, you always have 100% inventory control and your products will never be mixed with other clients.
#3pl #amazon #assumptions #fba #fba alternative #fulfillment by amazon #made #validate
  • Profile picture of the author ZanyZebra
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    • Profile picture of the author Canadashipper
      Thanks and I make no bones about it in my post that FBA is a technological marvel, we are just giving people an alternative. That said, did I say anything about FBA's pricing or commingling that is NOT accurate? I don't want to mislead my readers.
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      • Profile picture of the author DWaters
        Originally Posted by Canadashipper View Post

        I don't want to mislead my readers.

        After reading your post twice I could not find anything that really sounds correct to me.


        Please do not take this personally as I do wish you good luck in your endeavor.


        I would suggest you write more about how good your service is, not writing about Amazon's FBA model.
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  • Profile picture of the author Steve Zero
    Hi, new to this. Have been researching FBA but is that true? Even if I manage everything correctly with regards to my expiries to make sure my product is always fresh, or run a private label company.. that amazon could just randomly ship old stock from another vendor, or even worse... another label, potentially damaging my brand instantly?

    If this is the case, isn't this illegal?
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    • Profile picture of the author DWaters
      I would strongly suggest that you do not pay much attention to the initial post on this thread.


      I have run my FBA business for about two and a half years. Every product that every customer has bought thru me has been the exact item that I provided to Amazon. That is one of the reasons that Amazon has you ship various items to various warehouses, so they may be located relatively close to the customer's location when the order is placed. As for Private Labeling, if they order your brand that is the only item they will ever be sent.


      Amazon has very strict guidelines - both for sellers and for themselves.
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    • Profile picture of the author Stuiebee
      Amazon has never made such errors with our stock, thankfully. Don't think it's anything to worry about.
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  • Profile picture of the author Steve Zero
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    • Profile picture of the author Plush Island
      Hi,

      One big draw back to FBA, is that it can be like a drug. You see all the sales coming in so you get excited and build your inventory to thousands of units. Then one day you wake up and a few customers complained and your account is suspended. You may no longer sell now. Big crash and some have declared BK due to it. Not to be doom and gloom, but it does happen and it is something to keep in mind.
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      • Profile picture of the author DWaters
        Originally Posted by Plush Island View Post

        Hi,

        One big draw back to FBA, is that it can be like a drug. You see all the sales coming in so you get excited and build your inventory to thousands of units. Then one day you wake up and a few customers complained and your account is suspended. You may no longer sell now. Big crash and some have declared BK due to it. Not to be doom and gloom, but it does happen and it is something to keep in mind.


        Yes it is true that you can get your account suspended if you do not do things correctly. With proper inventory management, proper dealings with any negative feedback and by following Amazon's TOS you should be fine.
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        • Profile picture of the author Kay King
          The part in bold is ALL I can find about YOUR service.

          I never trust any company that spends most of its time telling me how bad the competition is. Your comments about FBA are clearly slanted toward the negative and perhaps will only attract those sellers Amazon has let go.

          In my opinion you'd do better to focus on the positives of your company - the shipping speed or personal touch or whatever - instead of trying to take on the gorilla that is FBA.

          ....FBA's pricing structure can be complicated and hard to understand. FBA charges a per order transaction fee, a per unit shipped fee and a handling charge based on weight. Additionally FBA charges storage based on cubic meters and their storage prices go way up during the Christmas season. When you are fighting for list results against a horde of similar priced products, not having a firm grasp of your fulfillment costs will either cause you to price yourself out of the market or lose money on every order. Our easy to understand Flat Rate per order model makes your fulfillment costs simple to understand and is guaranteed to save you money.
          One of the biggest risks with fulfilling your products on FBA is commingling. What many online retailers do not understand is that when you ship your product to FBA, unless you provide a pre-printed Amazon label on every unit you send, your product gets added to a massive pool of similarly described product. Let's say you list a nutritional supplement and ship your product to the nearest FBA in Texas. If someone in Florida buys from you, Amazon checks the UPC code and finds somebody else's product located in a Florida FBA facility and ships their product instead. You still get the sale and the customer saves a day in shipping except when the customer receives the package he might find the product is past it's expiry date, or the labelling is different from your listing or, in a worst-case scenario, the product is counterfeit.
          You have absolutely no control over FBA's supply chain and your online reputation can be damaged by unfair seller reviews or customer complaints. The only way to avoid this is to print Amazon's proprietary labels on every single unit you ship to FBA which can be very man-power and cost prohibitive. With us, you always have 100% inventory control and your products will never be mixed with other clients.
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          • Profile picture of the author Canadashipper
            Thanks to everyone who replied. As I mentioned this was just part of a blog post we were considering to attract customers considering an FBA alternative. The comments about focusing more on our services are 100% spot on, I just didn't include them here.

            Most of the assumptions I made were based off this article:

            https://www.internetretailer.com/com...-merchants?p=1

            I knew I should get a second opinion before posting online so that's why I came here because I knew this community has much more experience with FBA than I do. My question is, is the article full of shit?
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            • Profile picture of the author rumifdx
              Originally Posted by Canadashipper View Post

              Thanks to everyone who replied. As I mentioned this was just part of a blog post we were considering to attract customers considering an FBA alternative. The comments about focusing more on our services are 100% spot on, I just didn't include them here.

              Most of the assumptions I made were based off this article:

              https://www.internetretailer.com/com...-merchants?p=1

              I knew I should get a second opinion before posting online so that's why I came here because I knew this community has much more experience with FBA than I do. My question is, is the article full of shit?
              I wouldn't say the article you link is full of s..t: I think it's actually quite accurate on describing the possible pitfalls Amazon sellers face when listing "commingled" inventory.

              But my point is -you might have missed the point: commingling is just an option for Amazon sellers, and that article clearly refers to it as such, an "option".

              In your OP you're talking about the downsides of it as if each and every item fulfilled by Amazon is a commingled one, which is absolutely not true.

              I'm a brand-new seller on Amazon, with only one listing, but I'm pretty damn sure that customers checking out with MY product in their cart, MY product is exactly what they will get.

              Otherwise Amazon wouldn't be Amazon...

              Regards
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            • Profile picture of the author violet0176
              Originally Posted by Canadashipper View Post

              Thanks to everyone who replied. As I mentioned this was just part of a blog post we were considering to attract customers considering an FBA alternative. The comments about focusing more on our services are 100% spot on, I just didn't include them here.

              Most of the assumptions I made were based off this article:

              https://www.internetretailer.com/com...-merchants?p=1

              I knew I should get a second opinion before posting online so that's why I came here because I knew this community has much more experience with FBA than I do. My question is, is the article full of shit?

              Lol, Internet Retailer is usually a fairly accurate source. Your interpretation may be a bit biased.
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