29 March 2023
Amazon Seller Central vs Vendor Central: Which is Better for Your Business?
TweetLinkedInShareEmailPrint If you’re considering selling your products on Amazon, you have two main o...
Selling on Amazon via FBA requires actually move products from the supplier to the Amazon FBA warehouse. In most cases, shipping from China to Amazon FBA will be required.
You have started your Amazon FBA journey. You have researched your product and found your supplier (in many cases, in China). Eventually, all new Amazon sellers will hit a sticking point. Figuring out how to ship their product (in bulk) to the Amazon FBA warehouse!
Why do I know this? Because this is what happened to me. As a beginner, I understood the Amazon product research, finding my supplier on Alibaba, and product launching on Amazon. To me, those seem like the easy part. The tough part is figuring out all the details of FBA and shipping/logistics.
In 2015, there is a complete lack of resources on shipping to Amazon FBA that is searchable. Any resource that I searched for was not Amazon-specific and led to even more confusion. Eventually, I did figure out how to ship to Amazon FBA through trial and error. In this article, we will do a deep dive on how to ship your product from China to Amazon FBA. So you don’t have to reinvent the wheel and do hours upon hours of research.
There are loads of articles talking about Amazon FBA so I won’t write too much about it. FBA stands for “Fullfilment by Amazon”. FBA is the logistical journey of a product where it is shipped from an Amazon warehouse to the end customer. This part of the journey is called the “last mile”. By using Amazon FBA, you can plug into their warehouse network. Amazon will be confident that your product will be shipped to the end customer on time. This gives your listing the “Prime” badge.
There are pros and cons with Amazon FBA, but the general rule of thumb is:
If you plan for Amazon marketplace as your main sales channel you should be using Amazon FBA
In terms of the cost associated with Amazon FBA, there are 4 types of cost.
Fulfillment cost happens on a per order level. This cost is charged when the product is purchased & fulfilled. By the way, fulfillment or fulfilled means the act of pick, pack and ship your customer orders. I had some confusion over that as a first-time E-Com seller, thought I would mention that.
The actual fulfillment cost will be a function of the weight, category, and size of your product. See here for the FBA fulfillment fees for the US marketplace.
Storage cost is the cost of Amazon storing your product inside their warehouse. It is measured in a cubic foot, and the cost varies during high and low seasons of inventory storage. Hence, it makes sense to ship to Amazon FBA via the indirect method using a 3PL during high season, more on that later. For the completion inventory storage fee, you can visit the link here
Inventory placement cost is the cost of Amazon distributing your shipment to their different warehouses around the country. By doing this Amazon can optimize their warehouse space and shipping time to the end customer.
By default, you are required to ship your shipment to more than one FC (Fulfillment Center) in which case this placement cost will be waived. You can prevent this from happening and ship to one FC by changing the settings for Inventory Placement ➔ Inbound Settings ➔ Click “edit” ➔ Select the option “Inventory Placement Service”.
Once this is selected, the inventory placement fee will apply.
Amazon-Partnered Carrier Shipment Fee is the cost of the prepaid carton label when shipping from a domestic location to an Amazon FBA warehouse. The cost is calculated when you step through the inbound shipping process to create the prepaid shipping label. If you chose to send your shipment direct to Amazon FBA this cost will not apply, more on that later.
Before reaching out to a freight forwarder for shipping from China to Amazon FBA, you need to make a decision on the following:
The above decisions will have an effect on cost and shipping time. So conscientiously deciding on above two point will allow you to really think through your logistics/shipment planning.
Direct shipping from China to Amazon FBA means you will ask the supplier to ship your inventory from their factory to Amazon FBA. While, indirect shipping from China to Amazon FBA means you will get your supplier to ship your inventory to a middleman, then to Amazon FBA.
The latter requires an extra step in the shipment journey, which could potentially mean double the work and extra cost. The cost/labor can add up as you scale up your SKU offerings and with more suppliers.
The middleman can be yourself working out of your garage or a 3PL (3rd party logistics). A 3PL is a non-Amazon warehouse whose main duty is to store, pick, pack and ship your orders. They should also know how to ship products in pallets and cartons to Amazon FBA.
A 3PL I’ve used in the past and had a good experience with is Deliverr. Deliverr is one of the few 3PLs that are eligible for seller fulfilled prime. They also have real-time data on inventory levels so that you can track your inventory in real-time.
It seems like based on time and cost, direct shipping to Amazon FBA is a no-brainer, but there are real tangible benefits to shipping indirectly to Amazon FBA. Let examine the pros and cons.
For the middleman or 3PL to receive, prep and ship your inventory into Amazon FBA, it would take at least an additional 1-2 weeks’ worth of lead time.
Most 3PLs will charge a receiving fee (normally around $1-$5 per carton or $10-$50 per pallet), a pick/pack fee to actually ship the products (not including carrier fees of course) to Amazon FBA (normally around $1-$4) any labeling fees like barcodes (normally around $0.1-$0.25), and storage fees on top (charge by to Cubic meters or by Pallet). Of course, all the just mentioned costs would be eliminated if you choose to do all the prepping in your own garage where the only cost is your time and sweat. This option only works if your operation is quite small and dealing with inventory that is less than a pallet.
In general, if you are a beginner Amazon seller or just started to import from China, it is recommended that you start with the indirect shipping method. You will have much more control over the shipping process from the inspection and the prepping, it also gives to more leeway to make a mistake than direct FBA shipping. Direct shipping from the supplier should be done when the relationship between the Amazon seller and your Chinese supplier is firmly established.
Shipping from China to Amazon FBA will have its hurdles. There is nothing worse for Amazon FBA private label sellers than “poor quality products”, poor quality leads to poor reviews on Amazon and you will be on your way to a negative feedback loop. Another potential issue for new Amazon sellers is that their inventory is rejected by the FBA warehouse due to incorrect labeling.
For new Amazon sellers, the cost of inspection can be hard to take, as it can be a significant overhead, especially for a batch of inventory that is less than $1000. There is a wide range of services out there for the inspection, you can search for freelancers or you can find a professional inspection service. A recommended and well know inspection service amongst Amazon sellers is QIMA (formerly AsiaInsection), for $300 they will send an inspector anywhere in China and send you an inspection report, like so.
The $300 could be money very well spent if you want to make sure you are in the Amazon game long term. Here is what you want the inspector to do on the supplier site.
If do not choose to pay for a professional inspection service, you can mitigate your risk by asking the supplier to make a detailed live video recording of the inventory. Here is what should be included in the video:
Whatever your options are, you need some sort of vetting process on the supplier’s side, and not just take the supplier’s word for it, especially in the early beginnings of the seller and supplier relationship.
When you prep your shipment for Amazon FBA, there are 3 types of labels you need to apply:
If you are shipping directly from China to Amazon FBA, make sure to only ship to one Amazon FC, this is explained earlier on the Inventory placement settings.
A pro tip, when you create a shipment plan in your Seller Central account, set the “Ship from” address to an address in southern California. This will give you a much higher chance of having a southern California Amazon FC as the destination FBA warehouse. The reason you want this is that SoCal has the closest FC to China, which can result in faster shipping time and cheaper shipping costs.
After you have created the 3 types of labels mentioned above, you will ask your supplier to apply these barcodes to your inventory on your behalf. The FNSKU label applied on each piece, the carton label applied on each carton, and the 4 pallet label applied on each side of the pallet. Please note that if your shipment doesn’t reach a pallet, you will not need to use the pallet labels.
Make sure to have your supplier double-check those labeling, as shipping directly to Amazon FBA would leave little to no room for labeling errors. One major potential mistake, if you are ordering more than one SKU from a supplier, there is a decent chance of mislabeling the product variation/FNSKU. Making an FNSKU labeling mistake is very costly and difficult to fix.
If you are shipping pallets from China, make sure they are of the specification ISPM-15, the supplier may charge you extra for this.
Freight Forwarders are shipping agents/companies that will do the actual task of picking up and shipping your inventory to the destination. Before I go any further, I would like to explain the different shipping incoterms.
Basically, the different incoterms will set the logistical journey obligation by the freight forwarder. The more complete the journey the more risk and effort the freight forwarder will take, thus more costly. BUT, it is highly recommended that you go for DDP (Delivery Duties Paid) as the service level with your freight forwarder.
There are 2 reasons why you want your shipment to be DDP:
So if you are getting a quote from a freight forwarder make sure you mention that you want DDP service and get a quote on that service level so you can compare apples to apples on the quotes that you get.
There are 3 main ways to ship, below is the listed ways and by the order of the shipping time:
Air express is the DHL and FedEx of the world, they have the in-house infrastructure to deliver your good end to end very quickly. From China, they can ship end to end to the FBA destination in little more than a week. This option is very expensive and only makes sense if you are running out of stock and need to replenish quickly.
Airfreight is having your inventory shipped via commercial airlines, they would consolidate inventory of the same destination and be handled and received by multiple parties. Door to door for this service is normally 2 weeks during normal time.
Sea shipping is probably the most cost-effective way, but it will take more than 30 days to ship from the supplier to the FBA warehouse. Also, you will need to have more than 1 CBM as the minimum to shipment size via sea.
The freight forwarder will give a volumetric weight quote in kilograms (kg) via air, while it will be in CBM (cubic meters} for via sea. Please note the volumetric kg is calculated by the formula [(Length x height x width (cm)) / 5000 ]*number of cartons. As of September 2020, the air freight cost is about $6/kg (volumetric kg), while sea shipping is $2/kg
To find the freight forwarder, you can find domestic freight forwarders in the US or freight forwarders in China. The tradeoff will be cost versus communication. For any freight forwarder you use, the constant criteria you need to ask is if they have Amazon FBA experience. If so, it will make your job much easier.
Hope the above article clear things up about Shipping from China to Amazon FBA. Also, you are educated about the pros and cons of the different option of shipping your inventory from China, such as direct/indirect shipping and how you want to ship it (air or sea). Taking the first step is always the hardest, just take the first step. Happy importing!
If you have questions or insights to share, please feel free to post them via the comments section. Please also consider joining our Facebook Group where we discuss any questions you may have about running an Amazon business.