Now that you’ve got your Amazon FBA business up and running, it’s time to ship your inventory to customers. After all, how can they buy your products if they don’t have access to them? The answer is: they can’t. So now you must decide how you want to ship your FBA items.
Do you want to handle the process yourself, or do you want to hire an outside service provider? If you choose the latter, which shipping services should you use? Which one is cheaper, faster and more reliable: UPS, FedEx or another service provider? The sheer number of options can be overwhelming.
Intended for first-time business owners new to the world of logistics and shipping services, this article will help explain the pros and cons of each shipping company so that you can make an informed decision about which option works best for your Amazon FBA business.
The Importance of Shipping
Shipping is a crucial part of any e-commerce operation. But it’s often overlooked, sometimes even by experienced Amazon sellers. Why is that? In many ways, shipping is a black box: it’s complicated, it’s expensive, and it’s not very glamorous.
Shipping is also perceived as a one-time thing; something to be taken care of as quickly and efficiently as possible, then forgotten about. This is a mistake. First, shipping is a complicated process. How you ship your products will have a massive impact on your business’s profitability. The wrong decision could cost you a lot of money.
Why You Should Outsource Your FBA Shipping
Amazon’s FBA program is built around speed and efficiency. As an owner of an FBA business, you want to get your inventory out to customers as quickly as possible. But is there a way to expedite the shipping process even more? Yes. And the best way to do this is to hire an outside shipping company to handle this aspect of your business.
Why is this? Here are a few reasons.
- Shipping is complicated. It’s a complicated process with a lot of moving parts. As an Amazon seller, you have enough on your plate – you don’t want to add shipping to the mix.
- Shipping rates can vary wildly. If you handle your own shipping, you’ll have to track rates and make sure you’re using the cheapest service.
- Shipping companies have special rates for FBA shipments. Because shipping is such a competitive business, there are lots of deals to be had. If you’re hiring an outside shipping company, you can take advantage of these special rates.
- Shipping companies have expertise in this area that you don’t. They know what’s best for your products, how to pack them, etc.
- Shipping companies have economies of scale that you don’t. They can hire the best people, use the best equipment, etc. You don’t.
Amazon Free FBA Shipping Service
You might think that the only way to reduce your shipping costs is to outsource. But did you know that Amazon offers a free shipping service for FBA products that are located in their fulfillment centers? This means that, if your products are being stored in an Amazon FBA warehouse, you can offer free shipping to your customers. As a bonus, you can also add this as a line-item on your product listing. This is a great way to attract impulse buys.
Pros of Using a 3rd Party Shipping Service
- They have expertise in this area. You don’t have the time or resources to become an expert in shipping. If you outsource this aspect of your business, you can focus on growing your sales.
- They have economies of scale that you don’t. Remember, they have access to special deals and rates that you don’t.
- They can handle all of the minutiae of the shipping process. You don’t want to be in charge of scheduling pickups, tracking shipments, etc.
- You don’t have to spend time looking for decent shipping rates. This is especially important if you’re just starting out. You don’t want to spend all of your free time trying to find the lowest shipping rates.
Cons of Using a 3rd Party Shipping Service
- You have to pay for it. As profit margins go, shipping is a necessary evil. You need it to get your products to customers, but it can also cut into your bottom line.
- There will be less control over the process. Sure, you’re paying someone else to handle this part of your business. But you’ll have less control over the process. You have the freedom to decide how you want your shipments handled now.
- You might have to hire multiple shipping companies. This isn’t necessarily a bad thing, but it is something to keep in mind. You might have to hire multiple companies to handle your shipments. This may mean that your shipments take longer to arrive.
Pros of Handling Your Own FBA Shipment
- You have full control over the process. As an owner of an FBA business, you have full control over your shipments.
- You can decide when your items are packed, what is packed with them, where they are going and how you want them routed to their destination.
- You can optimize your shipments for speed. If you’re shipping smaller quantities, you’ll want to optimize this process for speed.
- You can customize your shipping rates. This is a great way to incentivize impulse buys and increase sales.
- You can take advantage of Amazon’s free shipping. If your products are being stored in an Amazon FBA warehouse, you can take advantage of their free shipping service.
Cons of Handling Your Own FBA Shipment
You have to allocate time for the process. This may be something you want to outsource in the early stages of your Amazon business.
You have to be careful not to break Amazon’s rules. Amazon has strict rules about how products are shipped. If you break these rules, it could lead to your account being suspended or terminated. This is something to keep in mind, especially if you decide to handle your own shipments.
Which Option is Right for You?
It all depends on your situation and your budget. If you outsource your shipping, you might have to pay per shipment. If you decide to handle your own shipments, you can charge your expenses to your Amazon account.
You have to decide if Amazon’s free shipping is worth it. If you decide to handle your own shipments, you might be able to take advantage of Amazon’s free shipping offer. This may be worth it in the long run.
You have to decide how quickly you want to scale your business. If you outsource your shipping, you can scale your business faster. This is because you won’t have to spend time handling shipments. You can focus on growing your sales.
You have to decide how much profit you want to make. If you outsource your shipping, you’ll have less control over the process and your profit margins will be lower. On the other hand, if you decide to handle your own shipments, you can maximize your profits. But you’ll also have less control over the process.