COVID-19 has done a lot of damage to many industries and businesses around the world. Even the biggest and most successful have been struggling to find their footing in this ‘new normal’, and Amazon is no exception. The lessons that have been learned by Amazon itself and all of those who work with and for the giant company will cement themselves in a world where things aren’t quite like they used to be.
Things have changed for sure, but perhaps this is no more apparent than for those of us who sell on Amazon. The past few months have been a tumultuous ride from having to deal with the giant company shutting down their warehouses to handling the longer ship times and unhappy customers who could not get what they wanted as fast as they were used to. As sellers, we’ve had to adjust our approaches and our strategies on the fly, but the payoff may well be worth all that we’ve learned.
Dealing with Shutdown
In a very unexpected move, Amazon shut their inbound acceptance down in order to focus solely on moving essential products and meeting dramatically increased demand for certain products. This demand was driven initially by the large numbers of people that were forced to stay home, but it remains as people are finding shopping online, especially with Amazon, to be faster and easier than running all over to get what they needed.
But with Amazon not accepting seller’s inbound shipments to replenish goods that were not considered essential, not all sellers were able to partake in the boom of sales. The numbers didn’t lie. Something that resembled a holiday rush appeared with Amazon sellers who had inventory enjoying record sales and profits. Everyone wanted a piece of that, and so, as we adaptable Amazon sellers generally do, we learned a way to things so that our businesses could carry on.
The Rise of Alternative Warehousing Solutions
Alternative warehousing, also known as 3PL or third-party logistics solutions, have been around for quite some time, though not as widely used by Amazon sellers as they now are. During the heart of the COVID-19 crisis, 3PL partners are what kept many Amazon sellers in the business. They were able to offer services very similar to what the Amazon Prime program offered, without restrictions on what kind of products were being accepted and with costs that were lower than what sellers were used to paying.
While Amazon has opened up their warehouses to all products now, savvy Amazon sellers are still employing their 3PL partners because this journey has taught us a valuable lesson - don’t put all your eggs in one warehouse.
A Front Warehouse - Cheaper Storage Space
By offering alternative space in which to store products and goods that will eventually be sold on Amazon, but in a location that is not Amazon, you can save money by avoiding the long term storage fees that are generally assessed for large or slow-moving inventories. Sellers can simply ship small chunks of their inventory housed in an alternative warehouse to Amazon for replenishment and maintain the balance of keeping items in stock while reducing the cost of having an inventory.
This allows Amazon sellers to avoid stocking out on anything they sell by importing in bulk from their suppliers, even if those suppliers are international, ahead of time so it is ready to go to Amazon with just a click of a few buttons. 3PL providers offer up to the second inventory management monitoring, allowing sellers to know exactly what they have and where it is in the logistical pipeline.
What it all means is that by employing a 3PL partner as a part of your Amazon selling strategy, you’ll get more control over every aspect of what drives your business.
Opening More Sales Channels
Partnering up with a 3PL provider can do more for Amazon sellers than just offering a cheaper place to store large inventories, it can offer a way to open up many more sales channels. This is one of the easiest ways to grow any business, especially where there are lots of selling platforms out there that can be integrated to leverage the benefits of a full-time logistics provider.
With centralized warehousing and contracts with various carriers or shipping methods, 3PL alternative warehousing options can give sellers the ability to sell to customers off of Amazon. The warehouse can then ship individual orders out to anywhere in the world using proven packing and shipping methods that make sure the items a customer orders get to them in perfect condition. What’s more, the warehouse has the know-how to use the right methods to get your shipments to where they are going on time, making less worry for you as a seller.
Reduce the Complexity
3PL offers more than just a warehouse, it offers services to cover all aspects of the costly and complex logistics process. Getting your goods to customers might sound simple, but it rarely is easy and it never is cheap unless you have lots of experience and time. Where most of us sellers don’t have this, 3PL companies are very experienced because they are composed of those who work in or very closely with the companies that get things from here to there.
Logistics professionals know how to pack, how to organize, and how to ship things without ending up with mad customers. This kind of understanding can take decades to learn, and the partnerships they’ve created with shipping carriers and other companies may never be built if you were to go it alone. With knowledge and buying power that drives the cost of organizing, managing, and shipping goods way down, keeping a 3PL on your side as an Amazon seller just makes sense.
And with online sales projects to stay high as our ‘new normal’ becomes our routine, sellers everywhere can be sure that 3PL will be what gives them an edge on the competition.