What is your best fulfillment option for 2021?
Before all this COVID business, Amazon used to offer “Guaranteed Delivery” dates for Prime members, which was one of the more alluring reasons to sign up. However, once the pandemic hit, problems quickly followed. For example, when my package arrived four days after the guaranteed date, I was informed by customer service that “guarantee” doesn’t actually mean “guarantee.”
It begs the question: Does “guaranteeing” anything even matter? Heck, do definitions matter?
They matter to consumers. There are 125 million Prime users (about 65% of Amazon shoppers), and the vast majority of them report their reason for using the service is fast, free shipping.
They can pay off for sellers. For the past couple years, there has been a groundswell of Fulfillment By Amazon (FBA) sellers, who are the primary beneficiaries of the Prime program. In exchange for less work, they pay higher fees and are totally dependent on Amazon to fulfill their orders and handle customer service, all guaranteed. Convenient in “normal times,” but at the outset of the pandemic it was problematic\with widespread cases of shipping delays, repackaging problems, and general disarray.
They leave something to be desired. Yes, FBA makes shipping faster and cheaper for customers, and yes it can help transform businesses into turnkey, money-making machines. However, it’s up to sellers to decide if the hit to their bottom lines is worth paying someone to essentially slow down to a jog to distract the bear that’s chasing them.
They discount other available options. Fulfillment By Merchant (FBM) could be an increasingly attractive alternative for sellers, especially if consumers leave the Prime program because of shipping delays and broken promises. Additionally, choosing FBM could yield higher profits for the seller depending on the efficiency of the warehouse or 3PL. Again, it is up to sellers to manage fulfillment and customer service, because hell hath no fury like a scorned retiree. They have more time than you, just lay down and play dead!
Our assessment: Definitions matter loosely. Looking deeper, the number of Prime users actually grew in 2020, and Amazon has incredible retention rates with the program, even amid shipping delays. Despite various fees and requirements, FBA is likely still the answer your business is looking for. Or, you know, you can fight the “Final Boss” on your own.
Godspeed, you beautiful entrepreneur, you.
