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Remember when Amazon was only a small website that sold books? Well, those days are no more. Amazon is a giant, with more than 185 warehouses and 2.5 million active sellers. Amazon FBA, which is like a company that packs and ships your products all over the world for you.
Amazon has made it easy for online retailers to manage an eCommerce business. With services like FBA, sellers can take advantage of Amazon’s well-established, fast and secure fulfillment services and distribution network and reach a massive customer base. Initially, this service was applicable only for orders placed on Amazon stores themselves; however, people selling their products can also avail Amazon’s fulfillment services through Amazon Multi-Channel FBA.
However, Amazon’s Multi-Channel Fulfillment is different from FBA in several ways. In this post, we will go over the advantages and disadvantages of using Amazon Multi-Channel Fulfillment.
Multi-Channel Fulfillment (MCF) is an eCommerce fulfillment service or a 3pl service for marketplaces outside Amazon. This means that even though you are selling your through a personal website, you can still use Amazon prep and fulfillment services.
MCF allows you to store your inventory in an Amazon prep center, and when a product I purchased through your website, it will be prepped and packed at an Amazon fulfillment center, and shipped to your customer.
Amazon MCF gives even non-Amazon eCommerce sellers access to a pro fulfillment network, operational expertise, and reliable shipping options.
Amazon MCF can have a lot of advantages for an online seller. Firstly, it makes their inventory and storage system significantly more efficient. It allows Sellers to keep all of their inventory at an Amazon fulfillment center and have it shipped anywhere through Amazon’s extended fulfillment network.
Additionally, MCF also has a straightforward fulfillment center pricing system that is easy to understand.
Above all, Amazon is reliable compared to any other 3pl provider. It has an extensive network of Amazon prep centers in many cities all over the world, and its services are credible and safe. Using MCF offers online businesses a significant competitive advantage. Since their fulfillment logistics are handled by Amazon, businesses focus on sales and other marketing strategies.
As beneficial as MCF can be, there are some disadvantages to it as well.
MCF is not applicable on all marketplaces
First of all, not all marketplaces allow multi-channel FBA. For instance, companies like Walmart and Jet.com have banned MCF due to the Amazon-exclusive branding. These large marketplaces have a massive potential for sales, and if you want to diversify your business in them, MCF can pose a problem. Moreover, the Amazon-branded boxes also take away from the growth of your brand.
MCF has strict restrictions on certain products
MCF does facilitate certain products, and you may have to face problems if you are selling any perishable, flammable substance, batteries, or aerosol products. So, make sure you research and find whether the products you are selling are allowed by MCF.
Long term storage fees are higher:
Moreover, if your products do not sell for longer than 181 days, the storage fees can get quite steep and cut into your profits. Similarly, other payments can also be higher for MCF when compared to FBA.
Shipping for FBA products is prioritized:
If you are using MCF, your shipping times can be slower than FBA products. Your products do not qualify for amazon prime shipping, and neither will they confirm other fast shipping tags like eBay Guaranteed Delivery or Walmart Free 2-Day Shipping.
MCF does not support returns:
Handling product returns can also be a problem for a seller using MCF. You will have to employ your own customer support team and handle returns yourself, which can be an extra hassle.
So, in conclusion, Amazon’s Multi-Channel Fulfillment service does provide a simplified inventory management and shipping infrastructure. However, it also imposes restrictions on branding and the fulfillment of certain products.
Moreover, even if the products are up to MCF standards, they might not be as profitable as you would expect because of the higher fees. Inexpensive and oversized products can usually be problematic and offer very low-profit margins when fulfilled using MCF.