Finding ways to create an efficient fulfillment process should be one of your primary concerns when expanding to a new Amazon market.
Enrolling in the Amazon FBA program is a great solution that fixes most of the problems international sellers face, but joining this program also has certain disadvantages.
Let’s see if Amazon FBA is the best fulfillment solution for your international Amazon store.
Last Updated on September 18, 2024 by Zeljko Drazovic
All Amazon marketplaces have their peculiarities, but one thing remains constant regardless of where in the world you offer your products. Online shoppers want to get the items they purchase from your Amazon store as quickly as possible.
Shipping and delivery are the pillars of outstanding customer service. Moreover, free shipping, the speed of the delivery, and a product’s availability are among the key factors shoppers consider when buying items online.
Each factor affects customer satisfaction and ultimately decides your Amazon store’s fortunes on the international market. Amazon’s FBA program takes the logistics off your hands and enables you to focus on other aspects of your business.
Despite countless advantages, participating in this program has its downsides, such as high fees, lack of branding options, and having to comply with Amazon’s inventory organization methods.
So, let’s see if the FBA is the best fulfillment option for international sellers on Amazon.
If you’re running a successful Amazon store on a domestic market, you’re likely already familiar with FBA. However, you may not be aware that participating in this program could make selling on international markets easier.
The way FBA works is straightforward, at least in theory. To participate in the program on their domestic market, sellers must activate this option from the Seller Central dashboard and add their products to the FBA inventory.
In addition, listing items in the FBA inventory makes them eligible for Prime Delivery, ensuring that customers can get the products they purchase from your store quickly and without paying for shipping.
Afterward, merchants must prepare the products in accordance with Amazon’s packaging guidelines and send them to one of Amazon’s fulfillment centers.
So, whenever a customer purchases a product from your store, Amazon packs and delivers that product for you from one of its fulfillment centers.
You’ll have several options at your disposal if you want to start selling products on multiple marketplaces.
Merchants can also sell the products listed in their FBA inventories to Amazon to ensure their placement on the global marketplace.
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The costs sellers who decide to join FBA must cover depend on multiple factors, ranging from the types of products they want to sell internationally to how long an item is stored in an Amazon fulfillment center.
Generally, sellers must cover fulfillment fees and a monthly storage fee. The exact monthly cost varies depending on the size, weight, and number of items businesses keep in Amazon’s warehouses.
Besides the monthly inventory storage fees, Amazon can charge merchants with the following fees:
The FBA revenue calculator, available in the Seller Central dashboard, enables international sellers to estimate the monthly cost of participating in this program.
Joining the Global Selling program makes starting an Amazon store in a new country easy.
However, expanding to a new market is more complicated than creating a new Amazon store because you must research the market, check the tax regulations, ensure that your products meet the market’s safety requirements, and complete countless other tasks.
The FBA options you’ll have at your disposal will depend on the market you choose. Hence, the best and the most affordable FBA solutions for US merchants expanding their operations to Canada, Mexico, or Brazil and those considering selling in the EU aren’t the same.
Let’s go through the FBA programs merchants selling on different markets can use to optimize their fulfillment process.
The program allows merchants to sell items from their US store on Amazon’s Mexico, Canada, and Brazil domains. The program is also available to UK-based sellers and merchants from select EU countries that offer products across the UK-EU border.
To join the program, sellers must already have a Professional Selling plan, a North America Unified Account, or the UK or EU equivalent, and enable the FBA Export option for their account.
Please note that the requirements for joining Remote Fulfillment with FBA in the US, UK, and EU aren’t the same.
Moreover, participation in the program involves registration for the FBA in the US and the selected destination countries.
Merchants don’t have to ship products listed in their stores to fulfillment centers in Canada or Mexico because joining the program means that Amazon delivers all items from fulfillment centers in the US to shoppers in these countries.
Keep in mind that some products aren’t eligible for Remote Fulfillment with FBA due to differences in rules and regulations between countries.
An Amazon FBA seller considering an expansion into the EU market has several fulfillment options.
The European Fulfillment Network gives merchants the option to store their products in a fulfillment center in one country and ship those products to shoppers in other EU countries.
The network currently spans France, Sweden, Poland, The Netherlands, Spain, Italy and Germany. In addition, the EFN is available in the UK, so merchants can rely on it to deliver products to their customers in England, Scotland, and other parts of the UK.
To join the European Fulfillment Network, merchants must set up a Global Selling account, obtain a VAT number, register for Extended Producer Responsibility, and meet various other requirements.
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Unlike the EFN program, which requires sellers to keep their inventories in a single fulfillment center, the Pan-European FBA enables ecommerce businesses to strategically place their products in Amazon fulfillment centers in Poland, France, Germany, Italy, and Spain.
Participants can export products to one fulfillment center, and Amazon distributes their inventories to the countries where they’ve enabled FBA storage.
Items must be listed in active FBA offers for Germany, France, Spain, or Italy to be added to the Pan-European FBA. Additionally, sellers need at least two VAT numbers to participate in this program.
Ecommerce businesses targeting the Central European markets can benefit from joining the CEE program, which allows them to store products in Amazon’s fulfillment centers in Germany, Poland, and the Czech Republic.
The program enables merchants to distribute their FBA, Small, and Light inventory across the fulfillment centers in these countries instead of keeping it only in fulfillment centers in Germany.
Still, it’s paramount to check which product categories can be shipped from Poland and the Czech Republic before enrolling in the CEE programs because some types of items cannot be delivered from these countries.
Amazon has more than fifty fulfillment centers across Australia and Asia. So, for most Amazon sellers using the FBA is the most efficient and affordable way to deliver products to customers on these continents.
The list of requirements sellers must meet to start delivering their products to Japan, India, China, or Australia varies by country.
That’s why you must get acquainted with the market’s rules and regulations before setting up a new store in one of these countries and choosing the fulfillment method.
The advantages of joining the Amazon FBA, such as having products featured in the Buy Box or speedy delivery, outweigh the program’s disadvantages.
Still, international sellers should be aware of the program’s potential downsides, besides the FBA costs, in order to understand how joining it can affect their businesses.
Here are some of the downsides of using Amazon FBA:
Exploring the alternatives to the FBA gives merchants the opportunity to compare the fulfillment costs offered by different logistics providers. International sellers on Amazon can choose from several fulfillment options and select the one that best fits their business’s needs.
Opting to manage your Amazon store’s fulfillment process will give you the freedom to choose how and where the items you sell on international markets are stored and delivered to your customers.
It also enables you to provide customer service following your brand’s guidelines.
However, opting for the Fulfilled by Merchant (FBM) option puts pressure on businesses to find a shipping and delivery solution that enables them to quickly deliver the products they offer on international markets to their customers.
Third-party logistics companies provide warehouse storage, shipping, delivery, and retail distribution services. Choosing the 3PL option allows Amazon sellers to outsource fulfillment and a potentially high FBA cost.
Moreover, opting for this fulfillment option can lower the merchant’s initial costs when entering a new market while allowing them to manage the inventory without any restrictions.
3PL also allows for a more centralized approach to product storage since merchants can keep all items they offer on a particular market at a single facility and ship them to their Amazon customers from the same location.
Establishing a brand presence on a new Amazon market is challenging even for businesses that have logistics processes in place for their domestic markets.
Joining one of the Amazon FBA programs is the fastest way for merchants operating on the world’s largest marketplace to overcome those challenges and start offering their products to consumers in different countries.
Still, FBA isn’t an ideal shipping and delivery solution for all Amazon stores, so before committing to it, you must check if the FBA Export, Pan-European FBA, or the European Fulfillment Network is the optimal solution for your business.
Fortunately, finding an alternative to FBA isn’t difficult as there are so many 3PL providers to choose from.
Webinterpret’s Managed Shipping Program, available to Amazon sellers on domestic and international markets, streamlines an Amazon store’s logistics and enables merchants to deliver products to global destinations at favorable shipping rates.
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Our AI-based solution enables more effective selling through automated listing localization, advertising, and logistics (shipping and returns).
By giving your international customers a full, end-to-end local shopping experience, Webinterpret improves your conversion and helps establish your business globally.
Webinterpret enables online retailers and marketplace sellers on eBay and Amazon to instantly expand worldwide and boost their online sales.
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