“One of the biggest benefits Amazon offers independent entrepreneurs, businesses, and brands is the Fulfillment by Amazon (FBA) program. Through FBA, Amazon can meet sellers’ product storage, packaging, shipping and other fulfillment needs and make their products Prime-eligible.

One of the biggest benefits Amazon offers independent entrepreneurs, businesses, and brands is the Fulfillment by Amazon (FBA) program. Through FBA, Amazon can meet sellers’ product storage, packaging, shipping and other fulfillment needs and make their products Prime-eligible.

It’s convenient, accessible, and very popular, but it’s not always suitable for Amazon sellers. Sometimes, alternative options are needed.

In this article, we’ll review the disadvantages of using FBA, the benefits of using alternatives, what some of these FBA alternatives are, and what information you should consider before making the switch.

Amazon Fulfillment Issues

Amazon has changed FBA storage limits several times over the years, prompting sellers to quickly adapt to these changes. One of the recent changes (March 2023) is the new FBA capacity limit.

FBA capacity limits are monthly limits that determine how much inventory a seller can send and store in an Amazon fulfillment center. While sellers are still "limited," the capacity limits will provide most sellers with more inventory capacity and control than other FBA inventory storage and replenishment limits in the past.

Capacity limits limit sellers to storing up to three months' worth of inventory at a time, depending on your IPI score.

While this sounds like a good thing, the problem is that if a seller needs more space for current products or launches new products, you either have to wait for current inventory to sell out or be subject to a "reservation fee."

While the new FBA capacity limits provide sellers with greater flexibility, some Amazon sellers may still need to seek alternative fulfillment or storage options.

2023 Holiday Rush Fulfillment Fees Update: Amazon announced in Seller Central that orders shipped by Amazon between October 15, 2023, and January 14, 2024 will be subject to a Holiday Rush Fulfillment Fee. Please check out our FBA Fees article to learn more about fee increases.

Why Use Amazon Fulfillment Alternatives?

In addition to solving Amazon's storage limitations, as a seller, you may have other reasons for wanting to utilize a third-party logistics (3PL) service to fulfill your products.

cost. You're looking for lower inventory storage fees, especially during the holidays when Amazon's storage fees almost quadruple.

custom made. You are looking for additional customization services such as product inserts, custom packaging, etc. A 3PL can help you deliver your products under your own unique brand (rather than Amazon’s).

Account support. You want the support of a dedicated account manager to handle any questions or concerns without having to open a ticket with Amazon Seller Support.

freight. You may find that certain 3PLs have shipping rates that are much lower than your own, which can help ensure you keep your profit margin as high as possible.

Transportation time. Most 3PLs offer 1- or 2-day shipping options that compete with Amazon’s Prime shipping.

So, if you have limited FBA warehouse storage or ASINs, what are your options?

Fulfillment Alternatives to Amazon FBA

If you don't have enough storage space on Amazon, how do you make sure all your products are in stock and ready to ship?

Let’s take a look at some other ways you can fulfill Amazon orders as a seller.

1. Merchant Fulfillment

The first alternative to using FBA is to fulfill your Amazon orders from your own location or warehouse. This is called FBM or Fulfillment by Merchant.

FBM is when you store inventory at your own location and ship your own orders, rather than storing inventory in an FBA warehouse and letting Amazon handle picking, packing, and shipping.

On Amazon, popular items sell regardless of whether the order is fulfilled by Amazon or a seller. If you have room in your house or warehouse to store additional inventory, and are able and willing to pack and ship your orders, then creating an FBM offer on your ASIN will be your best (and cheapest) option.

For your products, you can create FBA SKUs and FBM SKUs. This means you can have two active offers under one ASIN. This way, if your FBA inventory goes out of stock, there's no downtime and your listings will remain active.

However, if you select this option, your FBM offer will appear in the Golden Cart when your FBA offer is out of stock.

We recommend offering free shipping on any items you ship yourself to ensure conversion rates don't drop significantly (which might happen if you charge extra for shipping).

2. Seller-fulfilled Prime

Seller Fulfilled Prime (SFP) is basically FBM, except for one major difference: the Prime badge. SFP allows sellers to offer 2-day Prime shipping to customers without having to store inventory in an Amazon warehouse (or pay FBA fees).

To qualify for SFP, you must first go through a trial period to prove you can meet Amazon's standards. During this trial period, your products will not have a Prime badge, but you will still need to deliver them within two days.

Fortunately, Amazon reopened registration for new sellers in the Seller Fulfilled Prime (SFP) program on October 1, 2023. If you are interested in this delivery method, please join the waitlist.

Third-party storage and fulfillment

What if you run into storage or ASIN restrictions with Amazon FBA and don’t have your own warehouse or shipping location? A third-party fulfillment company will provide you with a secure place to store your inventory and provide you with the services to handle order fulfillment, just like Fulfillment by Amazon.

On Amazon, your products will be listed as FBM unless you will have a third party ship the order for you instead of fulfilling the order yourself. Essentially, if it’s not FBA, Amazon doesn’t know (and doesn’t care) who is delivering the products, as long as they are delivering them.

There are many reasons to use a 3PL besides wanting to avoid FBA storage limitations.

Reduce storage costs

When using a 3PL, the fees involved are usually pretty straightforward. In comparison, Amazon’s FBA fees can get expensive and vary based on the season.

For example, Amazon’s storage fees increased nearly 4x from October to December compared to the rest of the year.

Get better control of your inventory

As you learned above, Amazon will penalize you for storing too much inventory in their warehouses. Some 3PLs allow you to store as much or as little inventory as you need without charging you long-term storage fees.

QC

Using a 3PL can help if you want to ensure your product is in the expected condition. Sometimes, Amazon may accidentally send the wrong product to your customers, causing further issues.

Dedicated account manager

As an Amazon seller, you probably know how frustrating it can be to contact an Amazon support representative. Most 3PLs will provide you with a dedicated account manager to handle any questions or concerns without having to open a ticket with Amazon Seller Support.

Reduce shipping costs

If you fulfill your own orders or use Seller Fulfilled Prime, you may not get the same shipping discounts as Amazon or the big fulfillment companies.

Shipping costs, especially 2-day shipping, can eat into your profits. Therefore, by taking advantage of third-party fulfillment center rates, you will save a lot on shipping costs.

Ship with your brand

If you've ever purchased a Prime item on Amazon, you know exactly when your order will arrive because every package they ship has large Amazon branding on it. By shipping yourself or using a 3PL, you can ship your order in your own custom branded packaging.

This helps create a better brand experience for customers.

Multi-channel fulfillment

Not only can you use third-party fulfillment centers to ship your Amazon orders, you can also use them with any other marketplace or platform you sell on. These companies will make your products available to your customers, whether they purchase them from your Shopify store, Walmart Marketplace, eBay, etc.

Additionally, leveraging a 3PL will provide you with greater flexibility and control over your inventory this holiday season.

Provide third-party fulfillment centers for your Amazon sales

Fortunately, there are many FBA alternatives available today, but each offers different services and pricing structures. Therefore, it is important to do your due diligence and choose the best provider for your business.

To make this research easier for you, we’ve found some FBA alternatives you can use for your inventory storage and fulfillment needs.

All of the companies I list below have experience shipping orders for Amazon.

1. A2b Fulfillment

A2b Fulfillment provides support for companies that work with Amazon through Vendor Center and Seller Central, all of which have a strong track record of compliance and program success.

Most suitable:

• Prime order fulfillment by merchant or seller

• Small and medium-sized e-commerce enterprises

• storage

Benefit:

• Focus on e-commerce platforms such as Amazon

• Delivers bi-coast to 94% of U.S. households within 1-2 days via ground shipping

• Same-day shipping, meeting strict shipping requirements for sellers fulfilling Prime orders

• Offer bundled services

2. Boat Bob

ShipBob is a technology-enabled 3PL that uses proprietary software across its fulfillment network to deliver a coherent experience. Orders are automatically sent to its warehouse, where the inventory is picked, packed, and shipped to your customers.

ShipBob's fulfillment services help you optimize time and costs, exceed customer expectations with a delivery experience, and have more customer relationships.

Most suitable:

• E-commerce sellers on any major platform or marketplace

• Businesses that sell directly to consumers

• Wholesale order fulfillment

Benefit:

• Storage capacity will not be capped and storage fees will not increase in the fourth quarter

• Provide on-site customer success representatives at each location to help resolve any issues that may arise

• Integrate with Amazon software

• Offering affordable 2-day express delivery

3. Red Deer Fulfillment

Red Stag Fulfillment’s packaging and shipping services meet the requirements for Seller Fulfilled Prime and Merchant Fulfilled listings.

Most suitable:

• Fast direct-to-consumer fulfillment

• Small and medium-sized e-commerce enterprises

• Prime order fulfillment by merchant or seller

Benefit:

• Offers a 30-day free trial

• There is no limit on storage space during holidays and no increase in storage fees during busy periods.

• East Coast and West Coast Fulfillment Centers

• 2-day delivery to 97% of US addresses

4. Ship Monk

ShipMonk integrates with your sales channels to make shipping and fulfillment stress-free so you can focus on scalable growth.

Most suitable:

• Multi-channel e-commerce fulfillment

• FBA preparation services

• Seller Fulfilled Prime

• Subscription box fulfillment

• retail fulfillment

Benefit:

• They offer custom packaging preparation and bundling services.

• A dedicated account manager handles any issues that may arise.

• Easy to use software.

• They have the capacity to ship you between 1 and 10,000 orders per day.

• Reduce shipping costs on SFP orders to increase profits.

• No long-term storage fees.

In Conclusion……

Today, Amazon sellers have many great options for fulfilling orders quickly, easily, and affordably. In some cases, using a third-party fulfillment company may be better than using Fulfillment by Amazon, especially if you qualify for Seller Fulfilled Prime.

The point is, if you encounter some of the inventory or storage issues listed above, don't panic. You still have time to figure out what you're going to do.

Contact the companies listed above or do your own research to find the best solution for your business.

If you have any other questions about FBA alternatives, let us know in the comments!