There are many facets to running a business. You must consider the type of product you are selling, where you will source it from, how to market it the right way, and the best way to ship it to your customer. On top of that, you need to consider the customer experience and brand control. This matters when considering 3rd party logistics vs Amazon fulfilment.
As you may have read in one of our previous blogs, 5 eCommerce fulfilment tips to drive sales, we discuss the importance of branded packaging. Also known as custom packaging; this is an attractive option for many business owners as they know the importance of brand recognition. Customers also prefer it. In fact 40% of online shoppers say they are more likely to recommend a product to a friend if it comes in branded packaging. Some of the best and biggest brands focus on this as a top priority. However, these brands also know that time is money.
3pl vs amazon fba
Table of contents
3pl vs amazon fba
Brand control & custom packaging drive sales
When your business is expanding, eventually you need to bring on more staff to help with the workload. From accounting to customer support and more, eventually, you need a team to help drive sales. This is where eCommerce fulfilment comes into play.
3pl services and 3rd party logistics are the solutions for fulfilling orders. Companies can outsource their product fulfilment to a 3pl like Selazar. We also offer custom packaging solutions so that your packages get to your customer exactly the way you envisioned them.
There are many great companies out there that offer custom packaging solutions. Amazon FBA (Fulfilment by Amazon) does not offer a fully catered solution. So, as a comparative analysis for transparency, it is important to remember these 3pl vs FBA options when considering your order fulfilment supplier.
Amazon fulfilment does not offer custom packaging
As the largest supplier of consumer goods in the world, the Amazon FBA program is largely embraced by many sellers. Business owners can send their products to Amazon warehouses where they store them and sell on their marketplace. Then they ship directly to customers, just like a standard 3pl.
Amazon could be considered a 3pl because they store and ship consumer goods like many other logistics providers. However, as a manufacturer of their own signature products and marketplace, I would not place them in the same category. Their business model isn’t strictly focused on order fulfilment. It is part of the numerous services they offer as a multi-national corporate conglomerate.
Custom packaging means your orders arrive with clear branding displayed. It can be simple or complex but from a glance, your brand is recognisable instantly. Through FBA your products will always arrive in an Amazon-branded box. Adding inserts, free samples or other experience boosting collateral is not possible through FBA. At least not in a seller-friendly way.
So what do sellers need to do to improve the FBA unboxing experience?
Well, pre-build your boxes at home and ship them to amazon as a single unit item. That means sourcing and shipping the individual components of your desired packaging to your home or other location. From there you will build each and every box to your specifications. When you think about order volumes it becomes very time-consuming! Oh, don’t forget you have to store a large quantity of material too.
At the end of all that work, you can ship into the FBA warehouse and then have your orders arrive inside an Amazon box anyway. Not the brand awareness booster you were hoping for.
While partnered with a 3rd party logistics you can ship all the components to the warehouse and have the box created during the Pick & Pack process. Saving you lots of time and keeping resources available for dynamic manipulation.
If you fulfil with Amazon, you will not have custom packaging provided for you. This is one of the more unfavourable aspects of order fulfilment with Amazon vs fulfilment with 3rd party logistics.
Amazon does not share buyer information
One of the rewards of selling yourself and not with Amazon fulfilment is knowing your end customer. An important tenant of owning a thriving business is repeat sales.
You want to build relationships with customers so that you develop a lifelong customer instead of a one-time sale. People love brands and prefer to buy from the ones they trust.
“65% of business comes from existing customers”
Unfortunately, you no longer have access to this information with Amazon. They do not allow you to know the end customer. This is one of the major downfalls when you become an Amazon seller. Some would argue this is for privacy’s sake, however, it would also seem that it is a way to corner the market for Amazon.
In special circumstances, Amazon does allow some sellers to view the email and phone numbers of customers. This is what’s known as “seller fulfilled prime.” In this case, the seller agrees to deliver the order themselves from their own storage facility. Even in this circumstance, you are not allowed to market or solicit any website or products outside of the Amazon marketplace. If you do, this will suspend your account, as shown in their seller agreement.
Sellers are the ones who provide most of the products for Amazon. In this business relationship, there seems to be more taking than giving. Rather than enriching the seller, they take the product, a portion of the profit, and numerous fees on top of that.
This business model is synonymous in a way with Facebook and Instagram. These companies rely on “user-driven content,” or in this case, “seller-driven” products. With Amazon, most items sold are independent seller-driven products.
“60% of Amazon’s eCommerce sales are third party sellers”
These sellers provide over half the value of Amazon and allow them to thrive.
Amazon marketplace has both its advantages and disadvantages for third-party sellers. All these selling points should be considered when deciding your overall business strategy and operational setup.
Does Selazar allow me to see my customers?
Your customers belong to you. You made the website and provided the products. Selazar has nothing to do with your marketing or sales. We simply provide the end process of order fulfilment, and final mile delivery, along with robust technology that allows you to track and update your products online.
When you partner with Selazar, you will have access to our seller portal that links with your online store. Therefore, as sales come into your website, Selazar’s portal is automatically updated at the warehouse to be fulfilled right away. This is known as two-way stock sync.
We then pick and pack, and ship your products to your customer as efficiently as possible. Third-party logistics includes no fuss, no headaches, just stream-lined intelligent automated operations.
What are my options for custom packaging?
Custom packaging is a great investment in your brand value. 70% of consumers form their impression of a brand based solely on the packaging, so, it matters. When you can give customers more value than they were expecting, it provides the “wow” factor. However, you also need to consider the costs of this process.
Costs of custom packaging include:
Custom boxes contain brand logos and custom messaging. You can see some fitting examples from packaging works, a UK company. The overall cost per box is determined by the size and shape you prefer, along with the quantity you order obviously, and the amount of text printing involved. The average cost of a custom box can range anywhere from £.15 – £10 per box. See their custom quotes here.
Custom ink printing
Digital printing technology uses three-dimensional software to custom print text on your packaging and inserts. The nice thing about this is personalisation.
According to the Pantone Colour Institute, people experience 80% of their awareness from sight. So, colours like bright pink and bright yellow are real attention grabbers.
It’s important to note that you do not have to include lots of extra ink to stand out and be effective in your marketing. That could inflate your bottom line. Even a minimalistic packaging approach can reduce packaging costs while making an impression. You can still be bold, but simple.
See some great custom ink printing designs here with Packaging Works. You can start with a minimum order of 30 boxes.
The truth is it makes a difference. However, if custom boxes and printing are simply not an option for you, unbranded boxes and mailers can still be a good option.
The point is that custom packaging works and it is effective. Now you must decide how important it is to your business when it is delivered to the end customer. Do you prefer your brand be the sole focus or Amazon?
Custom inserts & materials
Custom inserts can include a wide arrange of designs based on your product. This could include divider sets, customizable printed inserts, layer pads, and even cushioning.
These can come in the form of paper inserts, cardboard inserts, or foam inserts. These allow you to display your products well, adding to a better unboxing experience. Paper inserts are good for small lightweight items such as beauty products. Cardboard inserts are ideal for heavier products that need more protection. Foam inserts are best for fragile items.
Courtesy of American Box Company
This is obviously an added cost, so you will need to do some research with companies near you.
After you have completed this process, you can simply forward your materials to our warehouse where we store and prepare for your order fulfilment.
What should I consider when working with 3rd party logistics eCommerce fulfilment?
When deciding to work with a fulfilment partner, you want to consider if the company will benefit your business. You want to ensure they have the right operations and resources available to meet the demands of your customers while saving you time and money.
You should consider the following:
1) Do I have enough monthly order volume to pay for the costs of 3rd party logistics services?
2) Does their technology save me time and streamline my operations?
3) Do they offer 24-hour delivery?
4) Does the 3pl have a strong courier network?
We provide all this and more with our eCommerce fulfilment services. Set up a discovery call to learn more about our services.