Fulfillment by Amazon (FBA) outsources orders to Amazon. Their network of fulfillment centers will then pick, pack and ship products. While FBA may be the right choice for some businesses, it has some limitations and downsides, from a lack of personalized assistance to high fees and costs.
You may wonder where to begin if you’re currently using FBA and want to switch to third-party logistics (3PL). At Crown LSP Group, we can guide you through the process and provide the ongoing support that your business needs.
Why Sellers Are Leaving Amazon FBA
FBA may initially seem like the right choice for your fulfillment requirements, with a nationwide network of warehouses and automated fulfillment processes. However, this option comes with some downsides as well. Here are a few top reasons sellers leave:
- High fees: Amazon charges various fees for its FBA services, including FBA and sales fees. You must also pay extra for features like a dedicated account manager and long-term storage. These costs quickly add up, cutting into your profitability.
- No branding control: When you use FBA, you lose the opportunity to build a relationship with the customer. If they order from Amazon, they won’t get to know your brand, and your products will arrive in Amazon vehicles and packaging.
- Support limitations: Amazon often lacks personalized support. This means you might spend a long time communicating back and forth with different customer service team members. More high-level customer service requirements might pass to multiple team members before you find one that can help.
- Less care: Amazon handles monumental inventories and focuses particularly on fulfillment speed, which leads to a decline in quality. More fragile products might break, and other inventory may get lost.
- Storage limits and fees: Costs for storage vary based on the time of year and the size and type of products. Amazon also limits the number of units you can store at one time, even if the product is in high demand.
Steps to Prepare for the Transition
If you’ve worked with FBA for some time, you may wonder where to begin in the transition process. Here are a few steps to navigate the change more smoothly.
1. Evaluate Current Fulfillment Needs
Think about your current processes for storing, processing, packing, shipping and delivery through FBA. As you evaluate your current needs, you can find a partner that meets these requirements. Start tracking metrics like the order cycle time, cost per order, rate of return and fulfillment accuracy rate. These details give you a baseline of current costs and timelines, which you can compare to what 3PL providers offer.
2. Audit Inventory
Switching providers means moving your inventory from one warehouse to another. Cross-check your financial records with Amazon’s inventory tracking tools to see if any discrepancies arise. These steps create better accuracy and a smoother move.
3. Set Clear Goals
If you’re considering switching to 3PL, you likely have a good reason. Develop your reasoning and goals to confirm your new provider meets them.
For example, maybe you want a more transparent view of warehousing, more hands-on service or room for scalability as your business grows. Perhaps you want to keep some benefits you enjoyed through FBA, such as inventory management technology, access to multiple warehouses and efficient delivery.
Establish these goals so that you know what to look for in your new provider.
How to Choose the Right 3PL
As you switch fulfillment providers, you want one that creates a step up from your current FBA arrangement. Here are a few factors to look for to verify that your new provider meets your needs:
- Support: You and your 3PL provider must work closely together, so be sure the 3PL provider will deliver the service you need. For example, Crown LSP Group builds trusting relationships focused on supporting you.
- Industry expertise: Some industries require more care than others. For example, electronics need careful handling, while food products require cold storage and faster fulfillment. We’re experts in numerous industries, providing the specialized care your products need.
- Scalability: Consider whether the 3PL will scale as your business grows, with a network of warehouses and the ability to offer more storage as needed. For example, we offer short- and long-term contract options and warehouses across the eastern United States.
- Technology: Tracking software helps you monitor your inventory and other essential metrics. Check the 3PL provider’s software offerings and whether they integrate with your chosen e-commerce system. Crown LSP Group uses various inventory management technologies to track your products.
- Cost: Analyze contracts and pricing. Ideally, you want a price similar to or lower than through Amazon FBA, but be wary of suspiciously low costs. We’re upfront about our fees and offer flexible pricing depending on the level of service you need.
Managing the Transition Smoothly
The next step in your fulfillment transition guide is to switch your inventory and begin working with your new partner. Plan for the details to maintain effective business operations.
Create a Timeline
Think about the details of the transition process, including key milestones like:
- Inventory transfer
- System integration
- Staff training
Also, confirm when to move inventory from Amazon warehouses to 3PL warehouses. During this time, arrange to receive and reorganize the initial inventory, as it may get mixed up during the transfer process. Consider putting your slower-moving stock-keeping units (SKUs) on hold for sale during the transition to limit the strain on your business.
Sync Inventory
Coordinate an effective inventory transfer to keep track of what you have available. During the transition, integrate your e-commerce platform or order management system with the 3PL provider’s platforms so any orders placed on your website automatically go to the provider for shipment. Our e-commerce fulfillment services enable you to leave every aspect of the process to us.
Maintain Customer Service Standards
Even with the most detailed planning, the shift in providers may cause a temporary disturbance in your fulfillment processes. Consider informing your customers of the change and how it might affect them. You may also offer temporary perks or discounts to maintain higher satisfaction levels.
Also, maintain open communication with your 3PL provider to address questions or issues. Working with Crown LSP Group ensures you always have an expert ready to work with you to streamline the transition and ongoing operations.
Upgrade Your Fulfillment With Crown LSP Group
If you’re planning to transition away from FBA, the two biggest factors influencing your success are proper planning and the partner you choose. Crown LSP Group is a logistics expert with a history stretching back to 1987. We’re family-owned and dedicated to your business success.
We also offer perks like cost-effective storage, scalability, e-commerce fulfillment and inventory management. Explore our transportation and logistics services and the other advantages we bring to your business.
Get in touch with us to request a quote.
