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If the seller has to ship the product to Amazon anyway, why not just ship it to the customer instead and not pay the extra fees? What need is Amazon fulfilling

If the seller has to ship the product to Amazon anyway, why not just ship it to the customer instead and not pay the extra fees? What need is Amazon fulfilling that Fedex or DHL do not?

ianburrell 4y ago
Storing the product and packing it up. If you have small volume, then garage might work and can pack yourself. But Amazon and customers have expectations on speedy shipping. For larger volumes, you need warehouse and people to package orders. Doing yourself makes sense if already have own store but otherwise probably easier and cheaper to pay Amazon. Also, my impressions is that Amazon shipping is cheaper since they have volume discounts, use their planes for long-haul, and use their trucks for cities.
- wewtyflakes 4y ago
  That makes sense I think. So as a seller, I could buy bulk from some producer, get it bulk shipped to Amazon, and they will take care of meting it out to individual purchasers. Did I get that right?
  - smallerfish 4y ago
    Yes but competition between sellers in most niches is so tight that as a new seller you'll struggle to make profit, even if you've innovated on the product, because you'll be paying Amazon for search engine ads and also dropping your price as far as you can to win sales. You essentially end up as an unpaid employee of Amazon, managing and optimizing a listing.
hammock 4y ago
Ever ask that of your grocery store? Do you order cereal from Kelloggs.com?
brianwawok 4y ago
Mostly 1 and at worst 2 day delivery for the entire continental US. You would need between 3-6 warehouses around the US to meet this. Which isn’t a small starting place for most sellers.
- thaumasiotes 4y ago
  > Mostly 1 and at worst 2 day delivery for the entire continental US. Amazon does not offer reliable shipping speeds and most certainly does not make any shipping speed guarantees. If you want worst-case two-day delivery, you can't use Amazon, because they don't do that.
  - brianwawok 4y ago
    The near 300 packages a year they deliver to me disagrees.
    - thaumasiotes 4y ago
      Assuming you are the only customer for all products sold through Amazon, that's good evidence.
nonethewiser 4y ago
You mean the 200 different customers?
bobbyi 4y ago
Maybe they get more sales that way? If I can pick between two items on Amazon for the same price and one is fulfilled by Amazon, I buy that one.
stickfigure 4y ago
Next day delivery for "free". Price out overnight service from Fedex or DHL. It's frightfully expensive.
AussieWog93 4y ago
I actually run an FBA business. For me to ship 500x units to the warehouse, from my home in Australia, it costs around US$200. Factor in the FBA fee of around $3 per unit, and you get a total shipping and logistics cost per batch of $1700. For me to ship 1x unit from my home in Australia to the US, it would cost around US$20 and take 2 weeks to get there. In this instance, I've paid $10,000 and the customer experience is worse. Even if I were based in the US, I'd be looking at $6 per package via USPS, plus all the fucking around to label and box up those 500x units. (That's maybe $3200 total including packaging, plus about 10 hours' labour distributed over the course of two months.) I guess the point is that making use of highly-efficient logistics services allows both small businesses and courier companies to access Amazon's economies of scale.
- thaumasiotes 4y ago
  > For me to ship 500x units to the warehouse, from my home in Australia, it costs around > For me to ship 1x unit from my home in Australia to the US, it would cost around US$20 and take 2 weeks to get there. In this instance, I've paid $10,000 and the customer experience is worse. Why are the units starting from your home? Is that where they're manufactured?
omgomgomgomg 4y ago
Logistics and order destination and they will work 247, give or take. There is quite some overhead if you have to schedule all the pick ups and update the order and shipping status. They have all this automated and they have warehouses strategically located everywhere. This is something that many of the chinese sellers still do not use. They are relatively new and inexperienced, they struggle to do the corporate onboarding paperwork etc. They will get around, though, some have improved fast.

If the seller has to ship the product to Amazon anyway, why not just ship it to the customer instead and not pay the extra fees? What need is Amazon fulfilling that Fedex or DHL do not?

ianburrell 4y ago

Storing the product and packing it up. If you have small volume, then garage might work and can pack yourself. But Amazon and customers have expectations on speedy shipping. For larger volumes, you need warehouse and people to package orders. Doing yourself makes sense if already have own store but otherwise probably easier and cheaper to pay Amazon. Also, my impressions is that Amazon shipping is cheaper since they have volume discounts, use their planes for long-haul, and use their trucks for cities.

wewtyflakes 4y ago
That makes sense I think. So as a seller, I could buy bulk from some producer, get it bulk shipped to Amazon, and they will take care of meting it out to individual purchasers. Did I get that right?
- smallerfish 4y ago
  Yes but competition between sellers in most niches is so tight that as a new seller you'll struggle to make profit, even if you've innovated on the product, because you'll be paying Amazon for search engine ads and also dropping your price as far as you can to win sales. You essentially end up as an unpaid employee of Amazon, managing and optimizing a listing.

hammock 4y ago

Ever ask that of your grocery store? Do you order cereal from Kelloggs.com?

brianwawok 4y ago

Mostly 1 and at worst 2 day delivery for the entire continental US. You would need between 3-6 warehouses around the US to meet this. Which isn’t a small starting place for most sellers.

thaumasiotes 4y ago
> Mostly 1 and at worst 2 day delivery for the entire continental US. Amazon does not offer reliable shipping speeds and most certainly does not make any shipping speed guarantees. If you want worst-case two-day delivery, you can't use Amazon, because they don't do that.
- brianwawok 4y ago
  The near 300 packages a year they deliver to me disagrees.
  - thaumasiotes 4y ago
    Assuming you are the only customer for all products sold through Amazon, that's good evidence.

nonethewiser 4y ago

You mean the 200 different customers?

bobbyi 4y ago

Maybe they get more sales that way? If I can pick between two items on Amazon for the same price and one is fulfilled by Amazon, I buy that one.

stickfigure 4y ago

Next day delivery for "free". Price out overnight service from Fedex or DHL. It's frightfully expensive.

AussieWog93 4y ago

I actually run an FBA business. For me to ship 500x units to the warehouse, from my home in Australia, it costs around US$200. Factor in the FBA fee of around $3 per unit, and you get a total shipping and logistics cost per batch of $1700. For me to ship 1x unit from my home in Australia to the US, it would cost around US$20 and take 2 weeks to get there. In this instance, I've paid $10,000 and the customer experience is worse. Even if I were based in the US, I'd be looking at $6 per package via USPS, plus all the fucking around to label and box up those 500x units. (That's maybe $3200 total including packaging, plus about 10 hours' labour distributed over the course of two months.) I guess the point is that making use of highly-efficient logistics services allows both small businesses and courier companies to access Amazon's economies of scale.

thaumasiotes 4y ago
> For me to ship 500x units to the warehouse, from my home in Australia, it costs around > For me to ship 1x unit from my home in Australia to the US, it would cost around US$20 and take 2 weeks to get there. In this instance, I've paid $10,000 and the customer experience is worse. Why are the units starting from your home? Is that where they're manufactured?

omgomgomgomg 4y ago

Logistics and order destination and they will work 247, give or take. There is quite some overhead if you have to schedule all the pick ups and update the order and shipping status. They have all this automated and they have warehouses strategically located everywhere. This is something that many of the chinese sellers still do not use. They are relatively new and inexperienced, they struggle to do the corporate onboarding paperwork etc. They will get around, though, some have improved fast.