Pandemic Provides Lessons in Fulfillment Flexibility
Before March 2020, many of us took for granted the way things always seemed to work when we needed them. Grocery stores always had toilet paper, cleaning supplies, and hand sanitizer, and Amazon’s shipments always arrived in a timely manner. By the end of March, all that changed when Amazon closed its doors to receiving and shipping non-essential items.
What happened when Amazon closed its doors to “non-essential” items?
On March 17, 2020, Amazon made an announcement that they would only allow shipments of “household staples, medical supplies, and other high-demand products” into their warehouses through April 5, 2020 in response to the pandemic.
With 1.9 million active sellers on Amazon, the company’s decision left those using Fulfillment by Amazon (FBA) with unfulfilled orders and major backlogs once Amazon began filling non-essential orders.
According to Digital Commerce 360, “COVID-19-related boosts in online shopping resulted in an additional $174.87 billion in ecommerce revenue in 2020.” With more people shopping online than ever before, sellers were left with negative reviews, unable to provide the fast deliveries buyers were accustomed to receiving in pre-pandemic times.
Insulating your business against a future distribution shock
While negatively impacted businesses that rely on Amazon fulfillment can hope that 2020 was an anomaly, it’s important to have backup plans in place.
An alternate to FBA is Fulfilled by Merchant (FBM), also know as Merchant Fulfilled Network (MFN). In this scenario, sellers are responsible for completing the shipment of their product– either on their own or through a third party logistics supplier. Walmart+ is another option that we covered last week.
In the aftermath of Amazon’s non-essential ban, many businesses opted to move some of their inventory to on-demand warehouses, choosing short-term solutions rather than 5-10 year leases. By stocking products at strategically-placed fulfillment centers around the country, you can save on shipping costs.
This past year has taught us that to be successful, we must be flexible. Instead of placing all of our proverbial eggs in Amazon’s basket, consider diversifying your fulfillment methods. Have plans in place to use third party or in-house fulfillment methods when needed.
As things begin to return to normal, now is the time to create a plan. ShipRx can help you audit your parcels and negotiate carrier rates to determine whether your current solution is the best option for your business. Get in touch with our parcel experts so you will be prepared for the future– no matter the circumstance!
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