Having a robust fulfillment system in place is key to the success of your business on many fronts. Not only does an efficiently run system ensure your products reach your customers on time, every time, it also does more. A well-coordinated fulfillment system frees you up to focus your time on research, product development, and marketing.  

What’s the best way to fulfill your orders? Self-fulfillment, Amazon fulfillment, and third-party logistics (3PL) all have their distinct benefits and drawbacks. Here’s a look at what each route brings to the table.  

What is Amazon Fulfillment?  

Amazon Fulfillment, also known as FBA, Amazon FB, or Fulfillment by Amazon, allows you to leave all your storage and shipping needs up to, that’s right, Amazon. Amazon thereby handles all of your receiving, shipping, packing, and return needs at their own fulfillment centers.  

Pros 

Amazon FBA presents many benefits which include access to: 

• Over 100 million Prime subscribers 

• Prime free shipping 

• Amazon promotions like Prime Day 

• Full customer support 

• A transparent fee structure 

With FBA you get access to Amazon’s over 100 Prime subscribers. This means your product(s) are potentially already in front of the eyes of many. Prime shipping has made shipping free for orders over a certain dollar amount which is typically around $25 or $35, depending on where you live. This can be a big leg up.  

In addition, with FBA you potentially gain extra exposure through promotions like Prime Day and other Amazon sales.  

Finally, unlike some third-party players, Amazon offers a pretty transparent fee structure. This allows you to more easily estimate your profits. You can even fulfill orders gathered from other sales channels, like your company’s own website, using the inventory stored in Amazon’s distribution centers.  

Cons 

All the above being said, Amazon FBA also has its drawbacks. These can include: 

• High fees 

• A lack of control over inventory quality 

• A lack of branding 

• Difficulty contacting Amazon for help 

• Amazon could be your direct competition 

Fees! Amazon charges fees for its comprehensive service. Sometimes these could be too high for your business. If you don’t have that many sales and you aren’t expecting to scale up very soon, you might not make a profit by using Amazon Fulfillment.  

In addition, with FBA you may lack control. Amazon fulfills orders with the most conveniently located merchandise. So, you can’t guarantee that the product you shipped to Amazon is the same that’s going out in orders next week. Amazon may have the same merchandise sitting someplace else and ship that first.  

You also cannot brand your product well working with FBA. Boxes arrive at the customer in Amazon packaging leaving them to believe they bought it from Amazon, not you.  

Finally, it can be difficult to contact a live person at Amazon if you need to discuss some aspect of your business. This lack of customer service can be frustrating to navigate. It also could be the fact that Amazon itself is selling a product very similar to yours and is your direct competitor. This could present a conflict of interest! 

Amazon FBA is generally beneficial for businesses that have a large number of orders to fulfill, or those who are using Amazon as one of multiple shipping channels for their business.  

What is Self-Fulfillment? 

Self-fulfillment happens when you do all of the work. You store your product, fulfill all orders, deal with returns and complaints, and run a one-stop shop yourself. Self-fulfillment has many benefits and drawbacks that include: 

Pros 

• A higher degree of quality control 

• Ability to brand packaging 

• Chance to save money 

Cons  

• Loss of time 

• More expensive in the end 

By fulfilling orders yourself, depending on your situation, you can potentially save money. If you already have access to storage space (like your garage), you can skip the cost of leasing warehouse space from someone else. Going the DIY route also gives you more control over your inventory and the ability to slap your own brand on your packaging, thereby increasing your brand’s exposure.  

The drawbacks to this approach include the fact that most people can’t run their business out of their garage eternally! It gets too time-consuming and complicated. In the end, buying or renting your own warehouse and doing all the shipping yourself can be more expensive than outsourcing the job to a third party.  

It’s also a fact that self-fulfillment can result in you spending almost all of your time on shipping and not enough on marketing your products and building your brand. You can get stuck in the warehouse or the post office. However, some companies do have the right balance to make this work. 

What is 3rd-Party Logistics (3PL)? 

Third-party logistics involves outsourcing your storage and shipment needs to another company besides Amazon or yourself. This company will typically handle your inventory management, shipping and returns, storage, and more. 3PL provides you with the services of many companies in one place, helping to streamline your logistics.  

Pros 

3PL offers: 

• Reduced rates 

• Increased expertise 

• The chance for customization 

Cons 

The drawbacks to using 3PL include: 

• Potentially higher fees 

By using 3PL, you can potentially lower your costs on many fronts. You won’t need to lease an entire warehouse but can rent space within a shared area. You have a team of experts at your fingertips who deal with storage and shipping all the time. They may do it better than you do! And with 3PL you can still customize your orders with your own branding (unlike with Amazon), which can be a big plus.  

The only drawback to this route is that you may end up paying higher fees. Fees can be charged for set up costs (software integration, training, and warehouse tours), receiving (flat fee, hourly rate, or flat rate per CPU), storage (per square foot), fulfillment (packaging, labels, etc.), and shipping. In the long run, however, many businesses find 3PL solutions to be a great way to go. 

How can Cymax Group help your business?  

At Cymax, we focus on building the best eCommerce experience for your business. Our integrated, all-in-one intelligent logistics platform connects you to a comprehensive network of freight service providers. Whether it’s shipping or returns, we take care of all your logistics requirements. Get a first-hand report of all damages, including real product images. Get in touch with us today to know more about our services.