Final Guide – Amazon FBA and its logistics system

How can I take advantage of the undeniable opportunity that the current moment offers through e-commerce without putting the distribution channel at risk?

A growing and expanding ecommerce solution for domestic manufacturers.

On one hand:

(1) The traditional distribution channel This is the main source of income and business sense for the vast majority of manufacturers, if not for everyone. Wholesalers, purchasing centres, department stores, international corporations, distributors, shops… It is a mature, well-known channel that supports the current turnover and growth and that, with its advantages, disadvantages, capacities and limitations is an undeniable value for any manufacturer. Why put at risk part or all of the distribution channel?

On the other hand:

(2) The ecommerce , that constant sonata of permanent growth and business opportunities. Offering the possibility of selling products all over the world, at any time, without geographical or temporal limits. Growing over 20% year after year and being a take-off platform for new competitors and for the competition, national and international. And, above all, being natural ground for new users and consumers who are gradually abandoning traditional points of sale. In a state that is still in its infancy, not yet crystallised and relatively simple, like the Wild West with the arrival of the first settlers that is full of possibilities and knowing that already today a large majority of consumers (88%) prefer to buy online directly from brands rather than through a third party platform*. How can we not take advantage of such an obvious opportunity?

In the attempt to reconcile these two elements we have one of the main problems that any manufacturer has to face today:

How can I take advantage of the undeniable opportunity that the current moment offers through e-commerce without putting the distribution channel at risk? It is a delicate subject with a high risk on both sides. But one that cannot be overlooked or avoided. It must be addressed.

One approach to this problem is to deny that there is a dichotomy between these two business approaches. There is no reason to simplify the problem so much and have to balance the traditional distribution channel on the one hand and ecommerce on the other. There are ways and approaches in which both business options can and should coexist.

This coexistence is particularly evident in the geographical and ´political´ limitations of the distribution channel, which is not in the case of ecommerce. On the one hand, we have countries or geographical areas where the traditional distribution channel is not developed. On the other hand, we have products that, for one reason or another, cannot or should not be managed through the distribution channel.
In these two fields of action, we find the right ground to develop an ecommerce activity of direct sale to the final customer by the manufacturer, without negatively affecting the distribution channel and the current and future agreements and developments on this channel.

Therefore, it seems that there is a possible solution for the approximation and coexistence of these two business development approaches for manufacturers . Now it is time to analyze the next step, how to manage as a manufacturer the direct sale to individuals, logistics, customer service, returns, marketing, advertising…? And this is where, in addition to a necessary external marketing and online strategies company, Amazon enters fully hand in hand with its Amazon Logistics service to solve this new problem to be faced.

Through Amazon it is possible to offer products directly to real and active online consumers in a specific geographical area . It is not necessary to disembark in a country with specific structures, commercial legal or logistic, nor even to have a specific website for that country. Amazon already has the platform, the traffic, the payment management and most importantly; the customers. Millions and millions of customers.

Through the Amazon Logistics you can send the product to their warehouses and they take care of shipping when there is a sale, locate the customer, make the delivery, manage the return if necessary, customer service … they take care of the entire process allowing manufacturers and producers to avoid having to enter into tasks and management that are not natural or on which they have qualified personnel or experience.

Amazon + Amazon Logistics therefore allows any manufacturer to explore new sales opportunities at minimal costs (derisory with the costs of entry through the traditional distribution channel) , either in geographical areas where it does not reach with the current distribution channel, or within its current geographical scope but with new products, prototypes or products that do not fit properly into the distribution channel. This solution not only avoids the apparent dichotomy between the distribution channel and online sales, but also unifies them. Being this first incursion in Amazon the necessary advance or experience to be able to decide which countries or products are more suitable to open traditional distribution channel and which products are more suitable for direct sale to the end user from the manufacturer.

There are other options to solve the same problem, there is Alibaba, Ebay, shares on own shops of direct sale, dropshipping… All of them valid and all of them to be explored. But what is certain, is the need to enter some of them (or all of them). Not only because they are fast and cheap with an enormous potential, but because they are the future yes or yes, one way or another. You may not want to see it, you may be against it for reasonable arguments, but reality is reality and the desires and habits of consumers is something that cannot be controlled or directed. The right choice is to join in, accept the big wave before it swallows you up and be able to harness its energy to find new areas of business development.

What is Amazon Logistics?

A service by which Amazon makes its own logistics available to any vendor. They take care of storing, collecting, packing and sending your product to the end customer throughout the European Union. It also offers customer service and returns management.

Video presentation of Amazon logistics:

What are the advantages of Amazon Logistics services?

The one that in our opinion is the most important of all: It allows you to focus on your tasks and responsibilities (catalogue, customer management, products, distribution…) But also:

  • Helps you to get new customers
  • Allow you to have a quick delivery service
  • Amazon Customer Service (recognized prestige)
  • Your products can be released as amazon premium and as free shipping
  • It helps you compete for the buybox
  • You will have more conversions and therefore more sales
  • They offer customer service management and returns management
  • Tools, analysis, data, big data…
  • It also allows you to manage orders from your own website and other channels.

More information on Amazon´s logistics features and benefits can be found at the following link: https://services.amazon.es/servicios/logistica-de-amazon/funciones-y-ventajas.html

How do Amazon logistics work?

The process is as follows:

  1. Decide which products you will initially send to Amazon logistics. Prepare the units and container boxes. Prepare all information about weights, measures and volume to facilitate the shipping process.
  2. Send the selected products to Amazon to the logistics center they indicate. Sometimes there are several centers according to their automatic calculations on demand for each product and space.
  3. Amazon stores all your products and from that moment on they are on sale with all the advantages indicated. The main ones for the catalogue is that the products will appear as premium and with deliveries in a very short time. Your products are more competitive from this moment on.
  4. When a sale is made, Amazon directly delivers the product. They simply inform you of the process which is automatically carried out by them. 5. Amazon takes care of returns or subsequent customer service.

More information on how Amazon logistics work can be found at the following link: https://services.amazon.es/servicios/logistica-de-amazon/procedimiento.html

PAN-EUROPEAN PROGRAM

Amazon´s new Pan-European program automatically distributes your products throughout Europe according to the demand generated. By simply sending to a single local logistics centre, Amazon carries out redistribution at no extra cost. Amazon will distribute them throughout Europe according to demand without paying anything for it.

When any purchase is made the logistics fee to be charged will be the local logistics fee for that platform. This is a new opportunity for internationalization through Amazon that opens new markets for local products.

Amazon´s Pan-European Logistics Program:

Examples and Success Stories:

FBA-related resources of interest:

Amazon Logistics Inventory Management:

How Amazon logistics work:

Amazon logistics inventory labeling:

Your first Amazon logistics shipment:

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