Amazon Logistics

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Context

In less than 25 years, Amazon has revolutionized consumer expectations and behaviors, becoming the world’s largest retailer in 2018.

The ease of finding an item, the wide choice, attractive prices and fast home delivery are just some of the advantages that make Amazon hold 2/3 of online sales.

In 2020, Amazon’s sales reached $386 billion, recording annual growth of 38%.

The Fulfillment by Amazon (FBA) program has been a key driver of this growth, providing sellers with world-class logistics.

The COVID-19 pandemic accelerated this growth, as demand for online shopping exploded.

Amazon has become a key player in online commerce, offering unrivalled visibility, efficient logistics and a global customer base, making it an indispensable partner for any business seeking to succeed on the Internet.

WHY ADAPT YOUR LOGISTICS TO AMAZON’S REQUIREMENTS?

Amazon’s success is based on a number of key competitive advantages, notably the result of a high-performance supply chain organization.

The platform offers exceptional ease of access to products and attractive, competitive prices. Above all, one of Amazon’s most differentiating aspects is its fast home delivery service, offering unprecedented convenience for online shoppers.

Selling on Amazon can be complex, and requires a deep understanding of supply chain mechanisms.

First, it’s essential to familiarize yourself with the 2 distribution models offered by Amazon: Fulfillment By Amazon (FBA) and Fulfillment By Amazon (FBM).

With Fulfillment By Amazon – FBA – sellers send their products to an Amazon distribution center, which takes care of storage, order picking, packaging, delivery and returns.

With Fufillment By Merchant – FBM – sellers are responsible for managing their own inventory, packaging, delivery and returns of products sold on Amazon.

FBA delegates most logistical responsibilities to Amazon, while FBM leaves them to the sellers themselves. Each of these options has specific advantages and constraints. Choosing the right option according to the nature of your products and your objectives is crucial to optimizing your supply chain operations.

Once the distribution model has been determined, it is imperative to bring your logistics operations into line with Amazon’s requirements. This will help you avoid potential problems that could lead to additional costs and penalize your profit margin.

Indeed, Amazon applies chargebacks to its suppliers, which are fees or penalties imposed when they fail to respect the terms of their agreement or make errors in order processing.

These chargebacks may relate to late deliveries, non-conforming packaging, mislabeling, overstocking in Amazon’s warehouses or mismanagement of returns.

If you sell or want to sell on Amazon, it’s essential to understand Amazon’s policies and requirements for quality, compliance and order management. This not only minimizes the risk of chargebacks and thus secures your margin, but also avoids operational problems, so you can maintain an efficient commercial relationship with the platform.

HOW TO MAKE YOUR LOGISTICS AMAZON COMPLIANT?

1 – Compliance audit

This first step is crucial for any seller operating on Amazon.

We perform an in-depth analysis of your logistics operations to determine how well they comply with Amazon’s policies and requirements, and to identify non-compliances that need to be addressed, and issues that need to be resolved.

2 – Stocks

We help you set up efficient stock management, a key factor in your success with Amazon.

This involves proactive management to avoid stock-outs, and precise stock levels.

Planning your supplies, managing pre-orders and constantly evaluating your performance are essential, as penalties can be applied for frequent stock-outs.

3 – Orders

Together, we develop a precise and efficient process for managing Amazon orders.

The aim is above all to ensure that order information is accurate, that your confirmations are completed on time, that your invoicing is correct, that your shipping documents are complete, and that proactive communication is maintained in case of problems.

4 – Packaging

We measure the use of appropriate boxes to avoid wasted space and damage, the use of environmentally friendly materials.

We ensure the use of clear labelling, adequate protection, properly sealed boxes, standardized pallets for bulky shipments, the reduction of unnecessary packaging, and the contribution, where possible, to the Amazon Frustration-Free Packaging program.

5 – Labeling

We evaluate the labeling of your products, including barcodes (UPC, EAN or ISBN) and individual labelling of shipping units and boxes.

We ensure the application of FNSKU (Fulfillment Network Stock Keeping Unit) labels for storage by Amazon, the addition of security labels for certain products, pallet labelings, compliance with regulations on dangerous goods.

6 – Delivery

We optimize your delivery methods with Amazon.

This includes scheduling appointments, ensuring vehicles are loaded correctly, keeping to schedules, tracking your delivery in real time, and communicating effectively with Amazon in the event of problems or delays.

The aim is to guarantee smooth, on-time delivery, while maintaining customer satisfaction and stock levels.

7 – Amazon tools

We’ll help you get the most out of these tools.

First, Vendor Central, for suppliers selling their products directly (1P).

Next, Seller Central, for third-party sellers (3P).

Finally, Amazon MWS, an API that automates operations, improving inventory management, order processing, and offering real-time notifications.

8 – Regulatory monitoring

We constantly monitor changes in Amazon’s logistics policies and programs.

We analyze their impact on your operations, advise you on adjustments, train your teams, help prepare for audits, and ensure your long-term compliance.

READY TO GET STARTED?

Whatever the maturity of your relationship with Amazon, whether you’re new to the platform or already generating significant sales on it, our supply chain consultancy is here to support you.

We understand the specific challenges of selling on Amazon, and we’re equipped to help you launch or optimize your operations on this global platform.

In less than 25 years, Amazon has become the world’s largest retailer. Offering a vast selection of products, competitive prices and fast home delivery, Amazon leads the market with two-thirds of all online sales.

It’s essential to adapt your logistics to Amazon’s requirements.

As a seller, you need to understand distribution models and align your operations with Amazon’s policies to minimize chargebacks and ensure a successful partnership.

To make your logistics Amazon-compliant, we can conduct a compliance audit, implement efficient inventory management, accurate order processing, optimal packaging, appropriate labeling, streamlined delivery methods and help you use Amazon’s tools.

Don’t let Amazon’s complexities get in the way of your business. Team up with SuCh Consulting to optimize your operations, reduce costs, improve performance, and increase revenues with the world’s largest online retailer.