A Deep Dive into Amazon’s Global Shipping & Fulfillment Network

It’s no secret that Amazon is an online selling giant. In the final quarter of 2012, the marketplace sold more than 1 billion items – and that’s rounding down.

Amazon’s growth has outpaced that of e-commerce at large since 2006 (according to comScore), and it boasts an audience of 200 million active shoppers.

The accelerated rate of growth may be linked to two ideas that were avant-garde at the time:

1. Welcoming third-party sellers and
2. Implementing long-term free shipping programs.

Most sellers know by now that Amazon has intersected the two with Fulfillment by Amazon (FBA). FBA is Amazon’s fulfillment service and an incredibly powerful stimulus for the marketplace’s growth, but it also offers a myriad of benefits to participating third-party sellers.

“You Sell It, We Ship It.”

That’s the tagline and the foundation of the Fulfillment by Amazon program. Amazon has been strategically expanding its fulfillment footprint by building fulfillment centers (FCs) around the country in populated regions, bringing products closer to customers with the goal of drastically reducing fulfillment costs.

Less ground between product and customers = lower transportation cost

The structure of the program is simple; retailers opt in to the FBA program and store products in Amazon’s network of FCs. When a product is ordered, Amazon picks, packages and ships the item to its final destination, and handles customer service on your behalf.

1. Sellers send products to Amazon. You send your products – new or used – to Amazon’s FCs.
2. Amazon stores the products. Amazon intakes, catalogs and stores your products safely in its network of FCs.
3. Customers order the products. Customers order your products on Amazon.com or other sales channels registered with Amazon’s fulfillment program.
4. Amazon fulfills the product order. Amazon fulfills the order on your behalf, picking, packaging and shipping it to its final destination.
5. Customer Service. Amazon’s world-class customer service team takes responsibility for all customer service related issues – including inquiries, refunds, returns and more.

What’s the Catch?
Chances are you’re not a large retailer with the budget and task force to handle global fulfillment, logistics and customer service duties.

The price – and measurable return on investment – is right for many retailers, and the numbers prove it. According to Amazon, 64% of FBA sellers reported that their Unit sales increased on Amazon.com more than 20% since joining FBA; 27% saw increases of 50% and 13% saw sales more than double.

But what is it about Fulfillment by Amazon that sets it apart from other third-party services, and why should you consider FBA?

1. Products in Amazon FBA have access to Amazon Prime members and are eligible for FREE Super Saver Shipping
2. Your products are more likely to win the Buy Box
3. Exclusive access to last-minute holiday shoppers
4. Amazon helps take care of your customers
5. Lower-cost fulfillment to international customers
6. FBA can fulfill orders from other sales channels
7. Complement international growth plans with FBA Global Export
8. FBA is likely more cost-effective than outsourcing to several third party drop-shippers

Getting Started (Download the eBook: “Fulfillment by Amazon: A Deep Dive into Amazon’s Global Shipping Network”)

Read the article: Online Retailer Amazon is Changing the Rules of the Supply Chain Game