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Amazon
I noticed a fair amount of you, are selling your products through amazon.
- are you primarily selling through “third-party” seller
- are you using “amazon fulfillment” services
- (or)
- have you chosen to migrate to a different service?
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4 Replies
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I used Amazon FBA.
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@Perry
might I inquire as to the subjective benefits for amazon FBA, from your perspective?
- the elimination of pick-and-pack (deaggregation of unitized products)?
- the outsourcing of a ‘storage’ warehouse space?
- the benefits of scale, respective to pricing on customer-bound transportation?
- the constancy of pricing with respect to outbound transportation (you to amazon)?
- the platform analytics (on transportation and sales)
- the customer relations management (reverse logistics)
- (some other factors?)
I’m asking because of the following:
- giving up your customer and sales data to a third party
- paying holding costs on inventory directly to amazon
- having to double handle small orders more than twice
- warehousing space needed to temporarily hold aggregated shipments
- lack of ability to negotiate directly with your “transportation” provider
- “additional” hurdles not directly related to direct sales, but third-party distribution
- increased customer aggregation, at the cost of increased supplier aggregation (pricing/substitution).
I’m not super familiar with Amazon’s back-end processes. So I’m wondering if the additional costs, are balanced by the benefits. So far as I can think, the main two benefits that are difficult to match are the low pick-and-pack of an automated system, and the transportation-negotiation power of a multi-billion dollar distribution system. Do you find that ‘returns’ are an issue (i.e. what prominence does reverse logistics play, in response to customer acceptance of goods).
feel free to respond publicly, or privately
select which (if any points) you would like to address/hilite etc. I’m simply curious.I’m weighing the pro’s and con’s, so to speak. and whether or not, with respect to the cosmetics industry, if there might be some compelling factor vis-a-vis product selection, to prefer handling items myself, or simply dumping a bunch of product into amazon and letting them handle the last section.
thanks
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btw (with respect to your website, I just got a popup notification):
“disk full (/tmp/@sql_3ff_3.MAI); waiting for someone to free some space… (errno: 28 “No space left on device”)
of which, in checking, I am 99.99% sure, is NOT a local notification. you may elect to contact your system administrator and inquire as to the servers (“temporary”) space.
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Sorry for my delayed response. I’m in Australia at the moment and haven’t been able to keep up with my regular activities.
To your questions…
- the elimination of pick-and-pack (deaggregation of unitized products)? YES - I didn’t feeling like boxing things up and going to the post office.
- the outsourcing of a ‘storage’ warehouse space? - YES - I don’t have an environmentally controlled space for product.
- the benefits of scale, respective to pricing on customer-bound transportation? This doesn’t really apply to my project.
- the constancy of pricing with respect to outbound transportation (you to amazon)? Not really a consideration.
- the platform analytics (on transportation and sales) - I don’t love the data that Amazon gives. It’s hard to figure out costs.
- the customer relations management (reverse logistics) - I hate this aspect of using Amazon.
- Others? The biggest benefit to using Amazon was that they took care of all the packing, shipping, and tracking of orders.
Returns have not been an issue for me.
The biggest problem with Amazon is the cost for what you get. They charge for shipping, storage, sales commissions, etc.
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> Sorry for my delayed response.
no problem
thank you for the reply, it was quite helpful & informative.I was trying to figure out if its worth it to run a traditional manufacturing environment at a moderate scale, vs a manufacturing concern + distribution & storage outsourced operation.
the question mark (to my mind) is the actual benefits that amazon has a serious (non-trivial) competitive advantage in, vs the cost structure imposed and additional third-party risks (separating out the 3pl, from the catalog & analytics service), plus ancillary concerns (leaving a large chunk of the business to the whim and dictates of a third party with significantly larger negotiating power).
I will have to think some more on your answers.
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