What Is Direct Fulfillment?

Virginia Miller

October 11, 2023

In this article

What is direct fulfillment? This is a question that business owners may ask themselves from time to time. In today's blog post, we will explore what this term means and how it can benefit your business. Stay tuned!

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What is Direct Fulfillment?

"Direct fulfillment" refers to sending an order directly to a customer. Direct fulfillment is when your eCommerce firm performs D2C (direct to consumer) sales and sends orders to your consumers. However, if you sell wholesale to other internet shops, you will ship them large quantities of your items. These shops will then keep your merchandise and fulfill customer purchases. Indirect distribution is the term for this type of distribution.

Amazon lists things it hasn't acquired and doesn't have in stock via Direct fulfillment. Once a customer places an order, Amazon sends it to the supplier, which ships it to the customer. Once an item is ordered, Amazon compensates for it. Dropshipping is essentially what this is.

Direct Fulfillment's Benefits

There are several benefits to using Amazon's direct fulfillment program, which include:

You can focus on your strengths: By using Amazon's direct fulfillment program, you can focus on what you're good at - making great products. You don't have to worry about storage, packaging, or shipping. All of that is taken care of by Amazon.

Increased reach: Your products are exposed to a broader audience using Amazon's direct fulfillment program. Not only will they be seen by people who visit Amazon, but they'll also be featured in search results and in the "Customers Also Bought" section on product pages. This increased exposure can increase sales and help you grow your business.

Save money: When you use Amazon's direct fulfillment program, you'll save money on shipping and storage. You won't have to pay for a warehouse or someone to pack and ship your orders. And, if you're selling products that are already popular on Amazon, you can take advantage of their Prime Shipping program, which offers free two-day shipping to Prime members.

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Direct Fulfillment's Drawbacks

There are a few drawbacks to using Amazon's direct fulfillment program, which include:

Less control: When you use Amazon's direct fulfillment program, you have less control over your product. You'll have to adhere to Amazon's strict guidelines and requirements. And, if there are any problems with an order, you'll have to deal with customer service.

More expensive: While you may save money on shipping and storage, you'll likely pay more in fees to use Amazon's direct fulfillment program. There are fees for listing your products, storing your products, and shipping your products. And, if you're not a Prime member, you'll have to pay for two-day shipping.

Need to adjust your pricing: Since Amazon's direct fulfillment program has fees, you'll need to factor those into the price of your product. This may mean you have to raise your prices, potentially deter customers.

Need More Warehouse: If you plan to use Amazon's direct fulfillment program, you'll need more warehouse space to store your products. This is because Amazon will ship your products to their warehouses first, then ship them to customers when orders are placed.

Oversees Shipment: If you use Amazon's direct fulfillment program, your products will be shipped overseas. This is because Amazon has warehouses in different countries. So, if you're selling items sensitive to temperature or light, you'll need to consider that when using this program.

Related: What Is B2B Fulfillment?

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What Is Amazon Direct Fulfillment, And How Does It Work?

Amazon Direct fulfillment is a fulfillment solution for Amazon sellers. Amazon Dropship Central was the previous name for the program. Remember, vendors are not the same as Amazon merchants.

A seller is a self-employed online retailer who sells things on Amazon.com. The products of an Amazon merchant are not listed on the platform. On the other hand, a vendor is a corporation that sells stuff to Amazon commercially. Their items are labeled "sold by amazon," and Amazon sells them to customers.

A seller ships a wholesale order to Amazon in the ordinary course of business. Amazon stores the goods, selects and packs orders, and ships orders via eCommerce. Whenever Amazon's inventory gets low, it sends a purchase requisition to the seller, who ships more goods.

On the other hand, Amazon merchandise flew off warehouse shelves quicker than warehouse employees could refill them during COVID. Vendors do not have adequate lead time to avoid items running out of stock.

Amazon Direct fulfillment is a service that helps Amazon fulfill orders. When Amazon loses out of an item, a participating merchant can ship it straight to customers rather than listing it as out of inventory.

Since the retailer (Amazon) offers items to customers and the producer sends the article when a customer puts an order, Amazon is akin to drop shipping. But, while Amazon has some influence over the purchase, it isn't precisely the same. Amazon covers the cost of delivery and also customer support and returns.

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Direct fulfillment vs. Drop Shipping

In drop shipping, the retailer (Amazon) never has stock on hand when a customer purchases an item from Amazon, the retailer contacts the supplier, who ships it to the customer's door.

However, in Direct Fulfillment, things are a bit different. The retailer (Amazon again) does have inventory on-hand. But when that inventory runs low, Amazon contacts the merchant and asks them to ship more goods.

The critical difference between these two programs is that, with drop shipping, the retailer never has any inventory. But with Direct Fulfillment, the retailer does have a list but relies on merchants to keep their shelves stocked.

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How to set up Vendor Central Direct fulfillment

Enrolled in Amazon's Vendor Central program: If you're not a Vendor Central member, you can't participate in Direct Fulfillment.

Create a Shipping Plan: You'll need to set up a shipping plan and include the products you want to be fulfilled by Amazon. Be sure to fill out the information completely and accurately.

Configure Product Settings: After you've created your shipping plan, you'll need to configure your product settings. This includes setting how much inventory you want Amazon to have on hand and choosing your shipping method.

Review and submit: Once you've reviewed and submitted your product settings, Amazon will review them and determine whether or not they can fulfill your orders. If everything looks good, they'll start fulfillment!

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How to choose the right direct fulfillment provider for your business

You'll want to consider a few things when choosing a direct fulfillment provider for your business.

Shipment

When shipping your freight, you must consider how it will be handled. Will it be sent via UPS, FedEx, or another carrier? If you're using Amazon's Direct fulfillment program, your freight will be shipped directly from Amazon. This means that you don't have to worry about the hassle of dealing with a third-party carrier.

Plus, Amazon's direct shipping amazon means that your freight will get to its destination faster and with less chance of damage. So if you're looking for the most convenient and efficient way to ship your freight, consider using Amazon's Direct fulfillment program.

Storage

Regarding storage, there are two main options: Amazon's Direct fulfillment or third-party warehouses. With Amazon's Direct Fulfillment, your products are stored in Amazon's warehouses and shipped directly to customers when they order. This is an excellent option if you're looking for fast and reliable shipping times. However, it can be more expensive than using third-party warehouses.

With third-party warehouses, your products are stored in the provider's warehouse and shipped to Amazon when customers order. This option is usually more affordable, but it can take longer for products to reach customers. Ultimately, your best choice will depend on your budget and shipping needs.

Pricing

If you're selling products on Amazon, you'll want to compare pricing between different fulfillment providers. Consider all the fees associated with each provider before making your decision. Amazon's Direct fulfillment program offers free shipping for orders over $25, and it charges a per-order fee of $4.99 for orders under $25. However, there are also monthly membership fees associated with this program.

Direct shipping amazon is another option that offers competitive pricing and no monthly membership fees. So, be sure to compare all the fees before making your decision.

Customer service

Excellent customer service is essential for any business, but it's necessary if you're planning on using a drop shipping provider. After all, you'll be relying on them to get your products to your customers promptly and efficiently. Thankfully, you can do a few things to ensure that you're choosing a provider with excellent customer service.

1. Take a look at their Amazon seller rating. This will give you an idea of how well they've handled other customers' orders in the past.

2. Be sure to read through their policies and procedures carefully. This will help you understand their process and what to expect if there are any issues with your order.

3. Don't hesitate to contact them directly with any questions or concerns. By taking these steps, you can be confident that you're choosing a drop shipping provider with excellent customer service.

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Tips for getting the most out of your direct fulfillment service

Now that you know a little more about direct fulfillment, here are a few tips to help you get the most out of your service:

1. Choose the right provider for your needs

There are a lot of factors to consider when choosing an eCommerce fulfillment provider. Be sure to compare pricing, shipping times, storage options, and customer service rating before making your decision. Amazon's Direct fulfillment program offers excellent benefits for eCommerce businesses.

With direct shipping from Amazon, you can take advantage of their world-class logistics network and get your products to customers quickly and efficiently. In addition, Amazon's storage options are second to none, so you can be sure your products will be safe and sound. And with their excellent customer service rating, you can rest assured that your customers will be taken care of. So if you're looking for a top-notch eCommerce fulfillment solution, check out Amazon's Direct fulfillment program.

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2. Understand the fees

When looking for a shipping provider, it's essential to understand all the fees associated with their service. This will help you avoid any surprises down the road.

Amazon's Direct fulfillment program is one of the most popular shipping options for sellers, but it's essential to be aware of the fees associated with this service.

A monthly fee for using Amazon's fulfillment center.
A charged per-order fulfillment fees vary depending on the size and weight of your products.
Storage fees are also charged if you keep inventory at Amazon's fulfillment center.

3. Compare pricing

If you're selling products on Amazon, it's important to compare pricing between different fulfillment providers. This will help you get the best deal for your business. Amazon's Direct fulfillment service is an excellent option for companies that want to ship products directly to customers.

With Direct Fulfillment, you can take advantage of Amazon's massive customer base and world-class shipping infrastructure. However, it's important to compare pricing with other providers before deciding. Shipping costs vary significantly between providers, so shopping around is essential and getting the best deal for your business.

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Related: What Is eCommerce Fulfillment?

4. Use excellent customer service

Excellent customer service is essential for any business, but if you're drop shipping through Amazon, it's even more critical. Make sure you're working with a provider with an excellent Amazon seller rating and carefully read their policies and procedures. By using excellent customer service, you'll provide your customers with the best possible experience and build a loyal customer base that will keep coming back to you for all their shopping needs.

5. Contact them directly

Consider using Amazon's Direct fulfillment program if you want a genuinely hassle-free Amazon shopping experience. With Direct Fulfillment, your orders are shipped directly from Amazon rather than a third-party seller. This means you can be confident that your products will arrive on time and in perfect condition.

If you have questions or concerns about your order, you can contact Amazon customer service directly. In other words, Direct fulfillment is a great way to get the most out of your Amazon shopping experience.

Conclusion

Direct fulfillment is one of the newest and best ways to save time, money, and resources. We can help you with everything from picking orders off your shelves in real-time to packing each order individually so that it's ready for shipping when we pick it up. If you're looking to cut costs without having a negative impact on customer service or product quality, contact us today!

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