What is Direct Fulfillment? How is it Different from Amazon FBA?
eCommerce retailers are constantly striving to offer the best services to their customers at the most competitive rates to out-shine their rivals. There are many important decisions to be made, especially in terms of order fulfillment because that is the most visible aspect to the customer and they get to experience it first hand. There are many different methods of order fulfillment and today we take a look at one of the more unconventional ones – direct fulfillment. Read further to understand what it is, how it works and if it would be the right fit for your business.
- What is Direct Fulfillment?
- What are the Benefits of Direct Fulfillment?
- How do I get started with Direct Order Fulfillment?
- What are the Advantages and Disadvantages of Direct Order Fulfillment?
- What are the Main Points to Keep in Mind while Choosing Direct Fulfillment?
- Fulfillment by Amazon (FBA) vs Direct Fulfillment: What are the Differences?
- Why You Should Choose WareIQ’s Fulfillment Centers for FBA Prep Service?
- Direct Fulfillment FAQs (Frequently Asked Questions)
What is Direct Fulfillment?
Direct fulfillment is the process of shipping goods ordered by a customer directly, using the company’s own facilities and resources, and not relying on a 3PL fulfillment company for any aspect of the fulfillment process. Another process is that wholesale sellers make a large number of product purchases, obtained from the producer, after which separation of the goods into distinct categories occurs, in order to sell to retailers. The distributor then sells the products to the end consumers. This is known as Indirect distribution.
Fulfillment By Amazon (FBA) is a service provided by Amazon that helps their clients with storage, packaging, shipping guidelines, and other aspects of the fulfillment process. This reduces the burden on sellers. Sellers ship their products to an Amazon fulfillment center, where the products are stored in warehouses, according to their demand, expiry date, etc. The products are then shipped whenever they are needed. When an order is placed, the employees in Amazon are always physically getting ready to prepare, package, and ship the products.
WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.
What are the Benefits of Direct Fulfillment?
There are many benefits in the process of direct order fulfillment, especially during the inception of an online retailer, where customers would be fewer and demand would still be on the lower side. A few benefits of direct order fulfillment are
- Ability to consolidate important information on client purchasing habits.
- Ability to separate yourself from the competition.
- First-hand look as to the performance of certain products and client feedback
- Faster supply of your goods to your customer’s
- Removal of payments and credit to a third-party distributor
- Direct relationship with your clients
- Expanded number of ASINs
- Buy request no needed
- Unavailable assurance
- Hassle-free reverse logistics
- No outbound delivery costs
How do I get started with Direct Order Fulfillment?
Direct order fulfillment starts with the following steps:
- The online retailer gets client requests and orders.
- The company checks stock and by the same token, acknowledges or dismisses the order request.
- The company initiates the fulfillment of each order from the area allocated by Amazon (commonly a stockroom) and drops the request if they don’t have stock in that area.
- The company satisfies the order request by utilizing the chosen transporter and transport strategy during the arrangement.
If you are currently an Amazon vendor
1. If it’s not too much trouble, record a help case in your Vendor Portal mentioning the desire to be set up on Drop Ship Central and Direct Fulfillment.
If you are not currently an Amazon vendor
- Train your onboarding contact that you would like the “DF (Direct Fulfillment)” box checked during arrangement on Vendor Central
- During the Vendor Central arrangement process, you will get a challenge to pursue Drop Ship Central, the administrative entry for dealing with your immediate satisfaction queries.
- As a component of the guided setup process, you will be asked to (1) pick your conveyance name preference (utilize Amazon’s transportation mark as opposed to giving your delivery name); (2) provide your fulfillment warehouse data; (3) provide your hours of operations, occasion, and termination plans; and (4)select a transporter.
- In around 48 hours, you will get the last guidance to transfer your stock feed data into Drop Ship Central.
What are the Advantages and Disadvantages of Direct Order Fulfillment?
Advantages Of Direct Fulfillment
- You can oversee your own branded shipping, stock, and orders.
- As long as you have the space, can print address names, pick and pack, and stand in line at a mailing station, you can satisfy orders on your behalf.
- It functions reliably, assuming your clients are nearby, the operations are sensible, and the transportation costs are negligible, particularly when order volumes are relatively low.
- Rather than most 3PLs, you can store and transport transitory or perishable merchandise, such as blossoms or lithium batteries.
- You can be located closer to your clients since this choice accompanies more client contact.
Disadvantages Of Direct Fulfillment
- This strategy requires a lot of staff to oversee customer service and other eCommerce fulfillment processes. This is likely removing diverting your attention away from developing the business.
- You need to have adequate warehouse space to store items.
- To ensure quick international shipping, would require a lot of capital and resources than partnering with a 3PL fulfillment company.
- Human blunders can happen when orders expand in size and complexity, particularly on the off chance that you are not utilizing automation to assist in dealing with your stock.
Read our blog about Seller Fulfilled Prime to get a better understanding of other services Amazon has to offer.
What are the Main Points to Keep in Mind while Choosing Direct Fulfillment?
Fulfillment companies new to direct order fulfillment and multi-level marketing (MLM) organizations might battle with one or more of the extraordinary prerequisites needed to successfully serve their customers.
Nature of Business
Retailers with expanding business operations are best suited to benefit from direct order fulfillment. Such businesses have the monetary means and available manpower to take on the process of fulfilling customer orders on their own, without needing to bank on Amazon’s fulfillment services. Retailers that seek to reduce their order fulfillment and logistics costs can do so by distributing to customers directly and don’t need to pay any fees to a 3PL fulfillment company.
Retailers who rely on Fulfillment by Amazon frequently face challenges relating to inventory receiving times. The receiving process, which would initially take 5 days, can now take upwards of 30 days. This lengthy delay can severely reduce the availability of inventory. By independently taking care of order fulfillment processes, companies can make use of their entire inventory, which would result in an increase in sales.
Benefit to small businesses
Small businesses generally find Fulfillment by Amazon to be a useful tool and can adopt Amazon’s offerings as their main fulfillment strategy with Direct Fulfillment as a backup. Retailers who make use of Fulfillment by Amazon have access to standardized shipping devoid of any hassles. Amazon takes care of the storage of inventory, packing, and shipping aggregation for all orders that come in. Smaller businesses can also use direct order fulfillment as a backup option to transfer more of their products.
Fulfillment by Amazon (FBA) vs Direct Fulfillment: What are the Differences?
Given the benefits, it shouldn’t shock anyone that most third-party sellers on Amazon utilize its Fulfillment by Amazon (FBA) service. With FBA, sellers’ items automatically qualify for Amazon Prime and Super Saver Shipping. They can likewise exploit Amazon’s customer service experience, and this all means acquiring more deals than contending with non-FBA sellers.
Notwithstanding, not all that sparkles is gold. Amazon’s FBA has its disadvantages as well, and numerous sellers frequently select to deal with this aspect of eCommerce logistics themselves.
If you’re a third-party seller deciding on direct order fulfillment, you might need to enlist external assistance to help you in dealing with the logistical portion of your business. Fulfillment, direct or otherwise, has become well known and has progressed as necessities have ascended over the last ten years. Innovation is a major tool in terms of dealing with the entire cycle and monitoring individual shipments as well as the stock in the warehouse. For the vast majority of businesses, the goal is to get to the same level of assurance that Amazon Prime offers in terms of reliability and quality.
The differences between direct fulfillment and FBA are listed below:
|Direct Fulfillment||Fulfillment by Amazon|
|In supply chain management, the consumer’s orders are supplied directly to the end customer. This is known as direct fulfillment.||The process is taken up by Amazon, which helps the customer with storage, packaging, and shipping guidelines to sellers is known as Fulfillment by Amazon.|
|Direct fulfillment is the process of shipping the goods ordered by the customer directly to the same customer.||The products are shipped whenever they are needed. During the placing of an order, the employees in Amazon are always physically getting ready to prepare, package, and ship the product(s).|
|Human blunders can happen when orders expand in size and complexity, particularly on the off chance that you are not utilizing programming to assist with dealing with your stock.||You generally have a deal accessible to the client. Adding these items to your Direct Fulfillment inventory will give you unavailable assurance. This won’t affect your ongoing orders.|
Direct order fulfillment facilitates your enterprise to manage expenses and mitigates dangers while at the same time enhancing your capacity to serve customers. You get all the recognition for providing professional services but conversely, you also get all the blame if something goes wrong. It is a primary step and doubtlessly, a hard one. If you feel that your business needs to outsource its fulfillment requirements to a 3PL company, WareIQ can definitely be of service.
WareIQ, is a full-stack eCommerce fulfillment company for some of the most reputed brands in India. WareIQ offers a full-stack platform for eCommerce companies to enable same-day delivery and next day delivery to customers – an Amazon Prime-like experience but accessible to everyone.
Why You Should Choose WareIQ’s Fulfillment Centers for FBA Prep Service?
Comply with Amazon’s scheduled delivery
Prep services ensure proper packaging and preparation which helps to reduce delays in receive time. Taking scheduled appointments in the Amazon Fulfillment Center is a hassle because of the complex checklist of items to be executed. There are chances of missing the time slot leading to stock rejection. Stock preparation needs to follow Amazon guidelines which is a thorough process that WareIQ staff is trained in.
WareIQ offers FBA prep services that ensure quality control, streamlining and adherence to Amazon standards whether it comes to fragile item preparation, repackaging thousands of SKUs to simply labelling products correctly with barcodes. WareIQ’s automated order fulfillment system ensures efficient and accurate picking and packing.
Save operational costs
Keeping track of a lot of different stock keeping units or SKUs that require different prep services can be tricky. You have to ask yourself if your business can afford to have its products returned or be billed a non-compliance fee for failure to meet FBA standards. Outsourcing FBA prep is a cost-effective way to move inventory. With WareIQ’s smart technology, SKUs are mapped across sales channels for efficient fulfillment.
Also, with WareIQ you’ll only pay for what you use, which means if you ship only one product in a month, you’ll only pay a pick and pack fee for that one. WareIQ books slot for clients on their behalf and offer bulk shipping with multiple sellers thereby ensuring cost efficiencies.
FBA doesn’t just take up mind space, it takes up a whole lot of physical space as well. De-palletizing and repackaging, and storing packing materials such as poly mailers, fragile item wrapping, or labels can take up a lot of space, which most vendors do not have. In this case, a fulfillment center may be a great option. WareIQ has the bandwidth to fulfill 1 to 10,000+ orders each day.
Save on resources
Think about what you could be doing with the resources it takes to manage FBA prep. Outsourcing to a fulfillment centre can help you focus on growing your core business.
- Pan India Fulfillment & Darkstore Network: Plug-and-play fulfillment infrastructure with no minimums, which is compliant with Amazon Seller Flex, Flipkart Assured, Myntra and other marketplaces
- Inventory & Network Planning Excellence: Best-in-class AI models for sales forecasting, product segmentation, and inventory management to reduce inventory by 40% and increase revenue by 10%.
- Vertically Integrated Fulfillment Tech Stack: Our Fulfillment Tech Solution supports integrations with 20+ top marketplaces & D2C platforms, and prominent national, regional and hyperlocal couriers, enhancing reach by covering deliveries for 27,000+ pin codes
- Supply Chain Productivity Applications: Integrate a host of supply chain productivity apps with a single-click to your existing CRMs, ERPs & accounting software to manage your logistics workflows from one command center. Use Apps like RTO Shield to get 100% RTO protection, Branded Tracking to turn your order tracking page into a profitable marketing channel, and many more.
Trusted by 300+ top Indian brands, we are helping them accelerate online sales and expedite their growth through a synergistic combination of advanced technology, robust fulfillment infrastructure & seller enablement services!WareIQ is backed by leading global investors including Y Combinator, Funders Club, Flexport, Pioneer Fund, Soma Capital, and Emles Venture Partner.