Amazon has grown online selling by launching the marketplace approach and has also redefined how new business owners and startups scale computing assets such as servers and services from the Amazon web services business.
Along with that, they are still dependent on third parties when it comes to the delivery part or when it comes to offering logistics service to export goods. Mainly that delivery services are provided by USPS, FedEx, and UPS. These services are one of Amazon’s biggest costs, as fast delivering packages to customers around the world is crucial to the vision of Amazon e-commerce.
Amazon is testing a service that can access FedEx and UPS. The service was launched in India two years ago and Amazon has gradually started marketing in the United States merchants to prepare for national expansion. Amazon calls it the Seller Flex Project. The idea is very simple. Amazon wants to collect products from third-party resellers warehouses and deliver them to customers.
The Amazon Seller Flex was introduced to provide sellers with better inventory control and uninterrupted shipping benefits. An online retailer recently told that the service also has negative consequences. And if not treated seriously, it can have a serious impact on your business. It is definitely new and there are many sellers who are still unaware of this Seller Flex service and there are few who know about the concept but they don’t how to take advantage of it.
Amazon Vendor Flex is a fulfillment program designed to give sellers greater control over their inventory.
The compliance program allows sellers to store all of their products in their warehouse using the Amazon FBA (Fulfillment By Amazon).
Therefore, they can store and keep at the same place, they can package their product in the warehouse. This allows them to take the benefits of delivering their products within 1-2 days. The seller flex order processing is very fast which makes the customer experience upto the mark.
Remember that you cannot directly contact Amazon for registration for seller flex program, Amazon itself strategically identifies and invites specific retailers based on multiple parameters. There is also no lengthy process in seller flex registration process.
You can easily Find out which Amazon program is more suitable and best to your business, The Seller Fulfilled Prime program or products which are fulfilled by Amazon (FBA)
One of the key differences between FBA fulfilled by Amazon and SFP is how they both actually work and the way seller’s different products are fulfilled.
As the name itself contains, Fulfillment by Amazon which means all your stocks and inventory is fulfilled by Amazon. Once you deliver the product the entire responsibility is of Amazon. You deliver the items to the Amazon fulfillment centers, here they keep your product until a customer decides to purchase it. Then after Amazon picks, packs and ships your product for your customers, while you sit back in relax mode at your home and get all your profit without any hassle.
Fulfillment with the Seller Fulfilled Prime is up to you. Customers are going to land on Amazon Prime model as usual, but your company delivers the orders directly to them and all without interference from Amazon.
So, now what happens with SFP?
Shipping: The big difference between shipping products with Amazon and using SFP is that for each delivery you have to pay individually for your product shipping. This can drastically reduce profits and lead to negative sales if you are not careful.
Delivery adds another level of logistics. Delivery information must be obtained through the Amazon Buy Shipping Tool, which means you only need to log into Amazon to create and print shipping labels. This can be a big challenge, you may need a third-party configuration built into the Amazon API to automate this process.
Sit back, relax and enjoy, we said. It’s really good to be positive, you thought. If you are false, you may be true.
This is all because of the FBA prices. Since everyone is familiar with Amazon’s implementation schedule, the level of Amazon compliance can change at any time. The price structure of all these facilities is updated annually and sometimes more frequently. If you don’t keep up to date with the latest inventory usage rate, remember, this can cost you more and can eat your profit.
Amazon does everything for its sellers. So you can think it likely amazon to ask for something to come back. And it might come with some cost. Here is an example, Take a nice lightweight standard size Formal shirt, and the marketplace charges around $4 per unit for picking, storing and packaging for that formal shirt. And if those formal shirts are keep in reserved on shelves for more than a quarter, then your product charges will get soared. Sometimes even the changes in storage become so high that it charges more than the product real price.
SFP users, on the other hand, can avoid these charges. Since you don’t send anything to Amazon for storage, processing, packaging, or return, an invoice isn’t sent at an incredible price. Of course, it is more work than the transport costs, but this margin is yours.
Another area that highlights the differences between the two these two inventory keeping methods is storage. There is also a big factor which is an Inventory Storage to look for and it draws special attention to major differences in both these programs.
But for the rest of us, there are many sales channels available to choose, why?
There are many customers which are always beneficial. Amazon offers multi channel fulfillment service but when you use this you have to lose your control from your precious inventory. When you use seller fulfilled prime, you need to invest in your warehouse to control your stocks and fulfillment – which can be costly to get, maintain as well as to invest in staff. There are some other works also, such as when you become a seller fulfilled prime member you have to make sure that the prime order delivers on the same day. With that point in mind, Seller must have trained their staff which can produce higher efficiency with respect to High orders per day.
With fulfillment by Amazon, once you ship your inventory to the warehouses of Amazon fulfillment, it’s gone. This means you’ll be limited when conducting any offers or promotions on other ecommerce or marketplaces or even on your own .com. Many a times, the seller have to recall their amazon inventory from Amazon Warehouse or else after a quarter the seller must be prepared to pay for fulfillment services that he is enrolled in.
Amazon inventory can also cause difficulties when it is precisely determined what is in stock and when the inventory becomes out-of-date. As mentioned earlier, Amazon has been charging penalty fees for more than six months in the command center.
The difference with SFP is that you have total control over your inventory. There is no split inventory between Amazon stores and your list. All of your products can be stored in one location or one warehouse, which means you have full control of your inventory. This is a big advantage if you sell multiple sales channels or have a physical niche. Thus, seller can then have more advantages whenever the event like Great Indian sale, Prime Day, etc. comes. At that time, the seller can receive more orders because of high traffic.
When Amazon does its inventory, the market returns the handles in its name and provides “first-class” customer service. This is very useful for entrepreneurs that will take advantage of the time and resources you can save.
With SFP, your business handles all of your amazon seller flex return. This means that you must have your own functional return and customer service departments. However, this has its advantages, because while Amazon sends a generous batch of returned products to FBA members, things are certainly less vague with SFP.
The seller can easily notify about which products has been returned to them from the customers and that in turn dip the loss of customer fraud.
Remember, however, that Amazon wants SFP providers to follow the same rules as their marketplace. This means that the items can be automatically returned to the seller’s account without first contacting the seller.
This is the case for large retailers who have their own stores. Amazon agents will collect the shipment from your warehouse and ship it.
If you are an offline retailer, most of them have the infrastructure ready. This reduces the cost of investments. If you are a full online retailer, there will be additional storage and labor costs. Other investments should be considered. You may not need the resources for the rest of the day after you ship the product.
Amazon seller flex is a best program designed for amazon sellers and it is implemented in sharing inventory management, shipping and warehousing.
SKU means Stock Keeping Unit.
It is a program designed for Amazon Sellers.
Amazon seller can apply for the seller flex program with their Business Details.
Seller can apply to the seller flex program by logging into their amazon seller central dashboard.
Amazon Seller Flex program is designed for the sellers who can maximize their sales with Fast Shipping and Order Processing.