A few notes on Amazon’s COVID-19 and holiday restrictions:
- On July 13, Amazon announced quantity limits and storage restrictions for third-party sellers across all categories on top of their impending +200% FBA warehouse storage increases in Q4.
- ShipBob will not restrict storage capabilities, nor will we increase our storage rates in Q4 2020.
- ShipBob has capacity across our fulfillment network, we will be opening additional fulfillment centers, and we are hiring hundreds of fulfillment associates.
- ShipBob offers Fulfillment by Merchant (FBM) and if you utilize Amazon fulfillment today, we highly recommend diversifying your fulfillment options for the holidays (e.g., use both FBA and FBM) to maximize sales.
Amazon’s Multi-Channel Fulfillment (MCF) program is one of many fulfillment options Amazon offers to sellers. By storing your inventory at Amazon’s warehouses, they’ll handle fulfillment for your brand across select channels.
Unlike Fulfillment by Amazon (FBA), where only Prime orders from Amazon’s marketplace are fulfilled, Multi-Channel Fulfillment uses a combination of shipping speeds and not just the famous 2-day shipping.
While there are advantages to using Amazon’s Multi-Channel Fulfillment program, it also comes at some costs. The Wall Street Journal recently reported that Amazon uses sellers’ success and customer data to spin off its own private label products.
Between fear of Amazon creating competing products and no ability to communicate with, remarket to, or access customer data of their own, many brands are wondering if they should stick with Amazon, switch to a 3PL, or manage retail fulfillment in-house.
There are many choices when it comes to outsourcing fulfillment and considerations you must not overlook that will impact your bottom line, customer experience, shipping capabilities, and brand reach.
In this post, we’ll go into the details of how Multi-Channel Fulfillment works, the pros and cons, and alternatives to Amazon Multi-Channel Fulfillment that can help your business grow.
What is Amazon Multi-Channel Fulfillment?
Amazon Multi-Channel Fulfillment is a fulfillment service that uses Amazon’s warehouses to store products and have orders fulfilled for both Amazon’s website and a brand’s website. The Multi-Channel Fulfillment program is a subset of the Fulfillment by Amazon (FBA) service.
What’s the difference between Fulfillment by Amazon (FBA) and Amazon Multi-Channel Fulfillment (MCF)?
Amazon’s FBA and MCF programs have one major difference: FBA focuses on sales made through Amazon’s website while MCF focuses on sales made through a seller’s channels.
Here’s a quick comparison table comparing the two programs:
|Channel||Amazon.com||The seller’s website or other marketplace websites|
|Shipping options||Next-day shipping and 2-day shipping (though there are disruptions and delays during the COVID-19 pandemic)||Next-day, 2-day, and standard (3-5 business days)|
|Fees||Amazon FBA fees include:
||Amazon MCF charges FBA fees for Amazon Prime orders, and has separate MCF fees for orders placed on sites outside of Amazon that are based on order weight and size.|
How Amazon Multi-Channel Fulfillment works
Multi-Channel Fulfillment works similarly to how fulfillment with a third-party logistics (3PL) company works: You store your products at their warehouses and they’ll handle fulfillment.
Store your inventory at Amazon fulfillment centers
Amazon has a large network of ecommerce warehouses throughout the world, but you can only use Multi-Channel Fulfillment in the USA. You send your products to Amazon and they’ll choose which warehouses your products are stored.
Orders placed on your website are received by Amazon
By integrating your website with Amazon, any order that’s placed is automatically sent to an Amazon warehouse.
Amazon picks, packs, and ships the order
Amazon will fulfill the order based on its selected and available delivery options. One thing to note is Amazon prioritizes FBA orders over MCF orders from your website, so potential delays can happen.
Amazon Multi-Channel Fulfillment pricing
Amazon’s fulfillment costs for Multi-Channel Fulfillment use a fee-based structure with two major fees: storage fees and fulfillment fees. You have to pay to store your inventory and you’ll also have a fee for each order that’s fulfilled. Unlike FBA, you don’t have to pay the 15% referral fee on orders that are placed on your own website.
Storage fees for Multi-Channel Fulfillment are seasonal. During the busy holiday shopping and peak season, Amazon increases storage fees from $0.69 per cubic foot to $2.40 per cubic foot for standard sized products — almost a 4x increase in inventory storage fees. This can quickly cut into your profits during the holiday season.
Amazon Multi-Channel Fulfillment: pros and cons
Leveraging Amazon’s fulfillment network allows ecommerce businesses to reduce costs for some scenarios and offer faster shipping options. Customers want expedited shipping options, and Amazon has set the standard.
However, there are drawbacks to using Multi-Channel Fulfillment that will cause your business to sacrifice a few things. Before you get started with MCF, it’s important to weigh the pros and cons.
Here are a few advantages to using Amazon’s Multi-Channel Fulfillment program:
Store all your inventory in one place
Amazon has the largest network of fulfillment centers in the world. Using the Multi-Channel Fulfillment service means you don’t have to manage your own warehouses yourself. They do the heavy-lifting so you can focus on running your ecommerce business.
Leverage Amazon’s economies of scale
Amazon knows fulfillment. They have some of the best technology and processes to help them efficiently manage their warehouses with thousands of staff members in each fulfillment center.
Offer fast shipping
Amazon has a logistics network that is nearly impossible to replicate. Their supply chain optimizations let you offer fast shipping to customers and reduce shipping costs, although Multi-Channel Fulfillment is more expensive than FBA.
While many FBA orders have seen more than a month delay due to the coronavirus pandemic as Amazon chose to prioritize essential products, they hinted it will supposedly go back to normal soon.
Here are a few limitations and disadvantages to Amazon’s Multi-Channel Fulfillment program:
Not all sales channels supported
Right now Amazon only integrates with Shopify and WooCommerce. If you’re selling your products on other ecommerce platforms like BigCommerce or popular marketplaces like Walmart or Ebay, Amazon won’t allow your products to be listed or fulfilled.
Restrictions on products sold
Amazon won’t allow you to sell just anything through Multi-Channel Fulfillment. Product categories that have restrictions from Amazon include toys, games, subscriptions, and others that are all subject to review by Amazon and they can choose not to fulfill these orders at their discretion.
Amazon uses Amazon branding, even for your website orders
Everyone knows one downside of FBA for brands is that orders go to your customers in Amazon Prime branded packaging. But orders placed on your website fulfilled through Multi-Channel Fulfillment also go in Amazon’s packaging. This dilutes your branding efforts as customers’ unboxing experience is covered in Amazon’s logo — not your branding. This can also provide a confusing customer experience when they order something directly from your website but an Amazon package shows up to their door.
No returns allowed
It’s inevitable that customers are going to return products. With Multi-Channel Fulfillment, you can’t rely on Amazon to handle returns, so you’ll have to pay the cost of handling ecommerce returns yourself. This can get complicated as customers have to send returned products back to your house if you don’t have your own warehouse.
No international shipping allowed
Multi-Channel Fulfillment is limited to the United States and does not allow international shipping capabilities. If your business has customers throughout the world, you have two options: use global FBA or find a way to self-fulfill and handle international orders in-house.
International FBA requires you to set up separate FBA accounts for each country’s marketplace, manage each listing, and send your products to each individual country, which is time-consuming, costly, and hard to manage.
ShipBob: the best alternative to Amazon Multi-Channel Fulfillment
3PLs are a popular alternative to Amazon’s Multi-Channel Fulfillment program. By partnering with a leading 3PL like ShipBob, you get all the major benefits of Amazon’s Multi-Channel Fulfillment program alongside benefits that aren’t offered from Amazon.
We’ve onboarded thousands of ecommerce merchants and helped some of the fastest-growing brands scale effortlessly.
ShipBob’s pricing is simple so that you aren’t hit with countless little fees. The main recurring fees are for receiving your inventory, warehousing your products, and shipping each order. Unlike Amazon Multi-Channel Fulfillment, we don’t increase storage fees during the holidays.
“From expanding into a second ShipBob fulfillment center, we increased 2-day shipping reach by 103%. Not only is this better for our customers but we also gain a 13% savings to our bottom line. Speed is important to our customers.”
Pablo Gabatto, Business Operations Manager at Ample Foods
Fulfill orders across more channels
Unlike Amazon Multi-Channel Fulfillment, ShipBob has turnkey integrations with all the leading ecommerce platforms (Shopify, BigCommerce, WooCommerce, Wix, Squarespace, and more) as well as marketplaces including Amazon (we can fulfill non-Prime orders), Walmart.com and Ebay. Orders are automatically sent to ShipBob and tracking is pushed back to your store to be shared with customers.
If you’re selling through your website and other marketplaces, you can integrate them all with ShipBob or use our Developer API to build custom integrations. Plus, we have integrations with leading returns platforms, inventory management systems, and more.
International fulfillment capabilities
Unlike Amazon Multi-Channel Fulfillment, ShipBob offers fulfillment for international orders so your ecommerce business can be truly global. You can utilize any of our fulfillment centers in the United States or and even our international fulfillment locations in Canada and Europe.
“As we expand our online presence into Canada, both directly and selling through Walmart, we knew we needed a trusted fulfillment partner with a physical presence in Canada. Our Canadian customers order more when they know the order ships from within Canada and they do not need to worry about additional taxes if the order comes from the US. It was a no-brainer to expand into other markets with ShipBob.”
Marc Fontanetta, Logistics Manager at BAKblade
Unlike Amazon’s Multi-Channel Fulfillment program, we can process returns for you at our fulfillment centers and can accommodate your returns process.
Our proprietary inventory management software helps you set reminders to proactively replenish inventory, bundle your products for promotions, make inventory transfer requests, and much more.
ShipBob’s algorithm automatically selects the fulfillment center and carrier that will give you the quickest turnaround at the best price. It’s easy to view the live inventory counts and any order’s status, with each order SKU updated as it is picked, packed, and shipped.
“In contrast to working in the Amazon fulfillment dashboard, which looks like a Bloomberg terminal upon opening it, the ShipBob dashboard is awesome and extremely user-friendly.”
Steve Staffan, founder and CEO of Brummell
ShipBob’s support team is an email, call, or chat away and is easy to get in touch with. Plus, you get fast support from the same people who are already familiar with your account. We have on-site reps at each location to help troubleshoot any issues that arise and hold ourselves accountable by sharing how often we’re hitting our SLAs, your average days in transit, your fulfillment cost per order, storage cost per unit, and much more.
“In my eyes, ShipBob is competing against the Amazons of the world. Not only are they very cost-competitive and quick, they actually care.”
Carl Protsch, Co-Founder of FLEO
Distributed inventory and 2-day shipping
Unlike Amazon, ShipBob lets each merchant decide how to distribute their inventory rather than deciding for them. We also provide free analytics and reporting tools to show you which of our fulfillment center(s) would save you the most money based on historical order data.
Like Amazon Multi-Channel Fulfillment, we offer a 2-Day Express Shipping Program that leverages ground shipping as an inexpensive alternative to expedited air shipping. This has helped our merchants reduce cart abandonment by 18% and increase their average order value by 97%.
“After a thorough search of companies that could give us something akin to Amazon and its delivery capabilities, we chose ShipBob. With ShipBob, 100% of our orders go out via 2-day shipping. We see that people are far more likely to order and keep ordering from us when 2-Day Express shipping is an option.”
Andrew Hardy, COO of Nature’s Ultra
Your branding, front and center
From custom branded boxes to free plain packaging, ShipBob works with you to provide the unboxing experience you want. Unlike Amazon Multi-Channel Fulfillment, our logo will never be all over your packages. You can use custom inserts and marketing materials in orders, and we work with you to accommodate your brand.
“We want to offer a custom experience for our customers and we can’t do that at a reasonable cost with Amazon. It’s difficult to have remarketing capabilities, there’s less flexibility, and everything has to be pre-packaged and pre-kitted. ShipBob has worked with us to develop technical capabilities so we can have any combination of our product offerings placed into our variously sized custom branded boxes.”
Pablo Gabatto, Business Operations Manager at Ample Foods
Amazon’s Multi-Channel Fulfillment program is a tempting option for many sellers. By leveraging Amazon’s fulfillment network, you can grow your business and not have to worry about fulfilling orders in-house. While it does have many benefits, there are limitations that may set you back.
When researching ecommerce fulfillment options, consider ShipBob. We provide a lot of the same benefits as Amazon Multi-Channel Fulfillment, but also give you more flexibility and transparency. To learn more about how ShipBob can help you with order fulfillment or how you can switch from Amazon’s MCF to ShipBob, request a quote below.