Resources - Blog
FBA Onsite: Amazon’s Next Move Against Warehouse Congestion
Stay on top of the latest e-commerce and marketplace trends.
Finding additional, efficient avenues to decrease warehouse overcrowding has been a thorn in Amazon’s side for the last year. We’ve noticed steps that the online marketplace leader has taken such as alter the assessment of FBA long-term storage fees from semi-annual to monthly beginning in Q3 2018 and the rise of Seller-Fulfilled Prime amongst third-party sellers, both allowing Amazon to minimize the number of slow-moving SKUs that are housed in their FBA fulfillment centers.
Enter FBA Onsite. The trial program entered its beta phase in the last quarter of 2017, with 50 hand-picked sellers that were allowed to test the program via invitation only. In the email invite from Amazon, they referred to FBA Onsite as a “groundbreaking program [that] offers the best parts of Fulfillment by Amazon and Seller-Fulfilled Prime.”
It is essentially warehouse management software that provides third-party sellers with faster and simpler shipping and less expensive delivery costs, therefore streamlining these services for the sellers. It’s a unique mesh of FBA and SFP: sellers store their inventory in their own locations and maintain control over their products and Amazon handles the bulk of the work by picking up ready-to-ship product from a seller’s storage location and chooses the most effective way to fulfill the order. Amazon will either use its own logistical network to deliver the product, use third-party delivery services such as UPS or FedEx, or use an independent company.
With Onsite, sellers have complete control over their inventory, while Amazon takes care of the minute details that come into play with delivery. They also handle the customer service and troubleshooting if any above and beyond issues arise during the delivery process. It transforms the seller’s own warehouse into their own, mini Amazon fulfillment center – making the Prime user experience seamless, whether their product originates from Amazon or a third-party seller.
Although right now FBA Onsite is only available to a small group of elite sellers on an invite-only basis, sellers should be aware of the program perks in the case that Amazon rolls it out to all 3P sellers:
- A nationwide, 2-day Prime offer for a flat fulfillment rate
- Fast and easy set-up with Amazon’s FBA Onsite warehouse management software
- Immediate, no-cost inventory receipt and removal
- Integration with previously FBA-only programs like Subscribe and Save and Small and Light
- Simplified returns
- Prime offers for Hazmat inventory
- Flexible same-day shipping SLA
With the program, sellers save money by avoiding sending their product to FBA fulfillment centers and paying the associated storage fees. The program frees up time for the sellers so that they can instead focus on optimizing their business in totality. The beta program seems to be a win-win so far: it assists Amazon in sticking to its word to Prime subscribers for fast delivery and aids Amazon in its pursuit of improved warehouse space management.