Remote Fulfillment with FBA Overview
So what is Remote Fulfillment with FBA?
If you are selling on Amazon.com, and if you want to expand off the marketplace, the logical choice would be to sell on Amazon.ca or/and Amazon.mx. Since your Amazon.com seller central account already includes those 2 additional marketplaces, listing the product you are already selling seems like low-hanging fruit.
The only issue with listing on additional marketplaces is fullfillment, which means you have on of two options:
- Send inventory to the FBA of the country of the marketplace
- Merchant fulfill the orders from Amazon.ca and Amazon.mx
Both of the above options will include more logistics and admin work, so the low-hanging fruit is not too low hanging.
Enter Remote Fulfillment with FBA, also called NARF (North America Remote Fulfillment). NARF allows inventory from your USA FBA FC to be fulfilled to Amazon.ca and Amazon.mx marketplaces. Basically, it can consolidate your fulfillment hub between .com, .ca, and .mx on all three marketplaces, you can send your product on one logistics journey (from supplier to the US) instead of shipping to three separate countries.
Pretty neat hah? But with all things, there are Pros and Cons. It is up to the seller to get all the information they can and weigh the pros and cons
Pros and Cons of Remote Fulfillment with FBA
Pros of Remote Fulfillment
- Save money on Shipping and time in logistics, you no longer need to coordinate shipping to Amazon.ca and Amazon.mx FBA warehouses. This can save the shipping cost from China to FBA and the storage fee for these FBA locales. You potentially would also order less inventory and can free up some cash for other opportunities.
- Less intensive Inventory Management process, having to ship to multiple destinations means you will have to keep track of inventory levels multiple times. Keeping track of more SKU/destination combinations will mean the need for inventory management software to manage the process. It’s very much like how our client would use Amazon advertising software to manage Amazon PPC across accounts and marketplaces.
- Great for Market Testing, Narf allows you to test your product’s viability outside your home marketplace. You will not need to order a batch of inventory if you want to test out the Amazon.ca market for example. Update your listing in the .ca marketplace and then confirm you are enrolled in remote fulfillment.
- Avoid local tax regulations. If you have already been to different selling countries, you know there is a whole new set of local tax regulations you will step into. A well-known example is the VAT in the EU. In Canada, you would have to pay GST (federal tax) and PST (provincial tax), though it will be merged as HST in most provinces. If you use NARF you can avoid stepping into another black hole of taxes
- Avoid local certification on certain product categories. For different products, each country will have its specific standard and certification in order to sell that product in their country. For example, a product that is covered by FDA in the United States, would not automatically be counted as proper certification in Mexico.
Cons of Remote Fulfillment
- The exchange rate fluctuations, with Remote FBA you are importing in $USD, but you are selling in local currency so you will need to keep track of the FX to make sure your margins are stable. This can also be automated via the sell globally function inside seller central
- The extra imports fee borne by the customer, the buyer will see that they will have to pay the “Import Fee Deposit” that can result in them choosing another product. Driving down conversion rates.
- Your sales will take a hit if you are already selling on those marketplaces, this is a bid con. At the end of the day, we are in it to sell more and achieve more profit, this reason alone can be a dealbreaker for using the remote FBA option. Higher FBA fees mean competition can easily price more competitively compare to your remote FBA product. The effect can mean lower conversion rate, ranking, and sales.
How much does it cost?
The FBA fees for Remote FBA can be almost double that of the local FBA. You can see the cost of the Remote Fulfillment fees here, and you can compare that with the normal Amazon FBA fulfillment fees here.
For example, a large standard size product that weighs 15 oz will cost $3.48 to fulfill, while its remote FBA fulfillment fee is $6.61 ($8.38 CAD). Not quite double the FBA fees but it is close. This extra cost is significant, and will really eat into margins if your price is not raised.
Step by Step: How to Enroll
- Login to your Primary account, as of writing this function cannot be given access to secondary users.
- Go to Inventory→Click “Remote Fulfillment with FBA”
3. On the “Remote Fulfillment with FBA” screen click “Generate Report”
4. Once the report is loaded, click “Download”
5. Open the downloaded report, filter by the SKU/ASIN combination that is eligible by filtering “Offer status” as “Action Required”. To enroll enter “Yes” under the “Enable/disable” column. Save your changes.
6. Back on the “Remote Fulfillment with FBA” screen click “Choose file” and select the file in step 5, the click “Upload”
7. Once uploaded, the upload status in the bottom of the screen will be change to “Done”
That’s it! Your product is enrolled in remote FBA.
Another Option to NARF (FBA Export)
If you find NARF is not to your liking, or you don’t want to directly sell on the marketplace. The next best option is to enable the option of FBA Export.
To turn this option on, in your seller central account click on Settings → Fulfillment by Amazon , then under Export Settings turn the option FBA Export from Amazon.com to “Enabled”
By turning on this option, it allows customers outside your home marketplace to purchase and deliver to their home country with no additional FBA fee to you.
This concludes our Remote FBA article. Remote FBA is great function offered by Amazon to scale your exisiting products into other marketplace. Use it strategically to test the water of iffererment place before going all in on another marketplace will give the best results.
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