Amazon FBA/Prime is a wild ride, and the extent is mind blowing. A manager at the fulfillment center here in Phoenix does prime deliveries for extra $. I recently did a run with her to experience it for myself. We picked up 33 packages all ordered via prime within the previous 12 hours.
Apparently, USPS cannot get everything out fast enough, so Amazon will take almost anyone with two legs and four wheels as a delivery person.
She gets paid $52 for 33 packages which was 2 hours of work. She scans all of the packages with a phone app at pickup and delivery. If she has any issues, she has a local Amazon operator instantly talking to her is English on the app. Her delivery territory was 1/2 mile wide and just short of 2 miles long. 33 packages – 3 packages to the same street, 12 packages in one large apartment complex. We were at a bar drinking margaritas in less than 2 hours. I kept thinking of the little microwave like thing on the original star trek where they just told the computer what they want and boom there it is.
First, I write, speak and think from the position that Amazon is nothing more than a tool in my bag of tools to dominate the world with my (clients)products. Amazon is the biggest tool and the industry changing tool but at most only 50% of e-commerce, and I’m greedy, I expect full coverage so I have many other tools as well.
The Internet has made the world a much smaller place. It is easy to chat with someone on the other side of the world, and feel as though they are in the next room. Would the last uncharted frontier on the Internet be the ability to move product in an instant? How does this impact the small seller that wants to spread their product across the globe without creating an opportunity for knockoffs to sprout up in a market before they get to that market? What does this mean for marketplace competition? Remember that studies show that delivery times are still a major factor in the final product selection.
Already today, to achieve niche domination in the US, you should be located, locate your inventory in one way or another or just pay the extra shipping fees so that you have 24 to 48-hour delivery max to any point in the lower 48. 24 hour transit time and 24-hour delivery is not the same thing. To achieve less than 48 hour delivery times, first, the shipping companies have to consistently break the 24 hour transit time cycle.
Amazon makes reaching this standard much easier if you are in FBA/VE/VC because that enables you to spread out your product. Amazon favors those businesses via search results. I think FBM will ultimately fail the Amazon test because it impedes their ability to dominate 24-hour delivery unless you are spread out. 24-48 hr delivery is not yet required but is preferred. Most sellers will tell you that they certainly feel the pressure to achieve this. I expect it will be a by-product of the brewing e-commerce battles so get it forefront in your mind now.
Off of Amazon, Walmart.com is posting impressive traffic numbers, just opened a giant fulfillment center and is positioning itself to fight the long battle against Amazon. One huge advantage for Walmart is cash, lots of it, to be able to throw at the wall multiple times if necessary to find the key components to take market share from Amazon. QVC and HSN recently merged, don’t think this was by coincidence. eBay is stepping up the ad spend on TV showing multiple image ads. Is Costco a candidate for the fight or will it become a victim and get swallowed up. There are many smaller marketplaces and retailers alike that we may see jumping into the Walmart sponsored brawl or bought-out. Even losing the war against Amazon, Walmart may come out a winner through its acquisitions during the process.
Where Does That Leave A Seller?
If you are not already considering shipment and logistics into your potential costs when making product decisions you should be. Those very low margin items in your inventory… move them now while you still can at a profit. Obviously, if you are on Amazon, it is to your advantage to be participating in FBA/VC/VE, or have your systems set up well enough to distribute your products quickly.
There are many fulfillment centers located around the country that are cheaper and faster than Amazon; many will refill fba and retail outlets for you as well. If you self-fulfill, consider utilizing a fulfillment center or possibly team up with a couple of other sellers across the US and work something out to store and ship each other’s products. Jet.com considers transit time and product vs buyer location as major factors when deciding which seller to give a particular sale. With Walmart growing the e-commerce side of their fulfillment funnel, Jet sellers should benefit from that as well.
This time last year I did an evaluation of all of the fulfillment companies for my clients and this platform I’m working on. There are plenty of excellent ones with better rates than fba, faster delivery and will stock fba. If you are not in FBA, consider your alternatives. One of my companies automates jet.com sales through fba for hands-free fulfillment via fba. Amazon is pricing MCF out the window, and it would be wise for anyone doing MCF and all of my clients doing it to consider the alternatives.
Amazon dominated the field last year during Q4. They banned new sellers from FBA in Q4 after those vendors had shipped their stock to FBA. When they flooded the other marketplaces, they had to fulfill from MCF and Amazon went out of its way to make things difficult. Meanwhile, Amazon gained a ton of market insight regarding the competition. Quite a stroke of genius on their part, only good for them. Amazon moved MCF deliveries inter-departmentally only giving it to the final delivery service once it reached the city of delivery. For jet vendors required to ship and post the tracking number the same day, this couldn’t be accomplished.
How does this affect sellers that make the buyer wait three weeks for a product to come from China? Ask yourself, when was the last time you waited for 3 to 6 weeks for a product or even know of anyone who did without trying to find the product closer first?
Consider an option when brand building of focusing on the local and one day delivery markets as a way to break into a particular market and grow once you have a secure foothold.
As a seller, what are you doing to ensure that you are able to get your products delivered as fast as possible?
Check out our other articles all related to Dominating On Amazon irregardless of the niche. Our most popular Amazon articles are: AMAZING AMAZON PRODUCT LAUNCH WITH NO GIVEAWAYS and GET PAGE ONE LISTINGS FAST WITH THE AMAZON LAUNCH LIST