Third-party sellers, including many who take advantage of Fulfillment by Amazon (FBA) and Multichannel Fulfillment (MCF), are an integral part of Amazon’s ecommerce business, accounting for 60% of sales on Amazon.com.
Amazon decided to open its store to these sellers back in 1999, and over the years, the number of businesses selling on Amazon.com has steadily increased. Today, we have over 1.9 million selling partners worldwide.
Third-party sellers are a critical component of Amazon’s success, and we, in turn, are deeply committed to their success.
One area where many sellers need support is with order fulfillment services. Amazon—which has the world’s largest fulfillment network, with over 2,000 facilities (including more than 200 fulfillment centers), nearly 100K trailers, containers, and planes, and 1.5M+ employees and partners—is well positioned to help.
Amazon offers two different services to help businesses handle their multichannel fulfillment:
- Fulfillment by Amazon (FBA) is a service for sellers to outsource the fulfillment of their Amazon.com orders to Amazon. Nearly half of US Amazon sellers use FBA to pick, pack, and ship their Amazon.com orders.
- Multichannel Fulfillment (MCF) is a service for businesses to outsource the fulfillment of their orders placed on other sales channels (including their brand websites, other ecommerce marketplaces, and social media platforms) to Amazon. Since MCF was launched in 2007, over 300,000 sellers have used this service to pick, pack, and ship their orders from channels beyond Amazon.
Both of these services are part of Amazon Supply Chain Services (ASCS), Amazon’s end-to-end supply chain solution, so businesses also get access to other supply chain support that their business might need, like inbound transportation, warehousing and distribution, and more.
Many sellers already know that using MCF can help them scale their ecommerce business beyond Amazon.com. But they might not know that using MCF together with FBA can actually help to boost their Amazon.com business. In this blog, we will explain the three main reasons how, by leveraging Amazon’s two fulfillment services, FBA and MCF, you can see an uplift in your Amazon.com sales and realize a whole host of other business benefits.
Reason #1: Effective inventory consolidation and distribution
When you use FBA and Multichannel Fulfillment, you send your inventory to an Amazon fulfillment center where it’s consolidated into a single pool, which can be tapped to fulfill your Amazon.com orders (with FBA) as well as for orders across your other sales channels (with MCF).
This ability to utilize the same pool of inventory to satisfy demand from multiple sales channels, on and off Amazon, is hugely beneficial to sellers—and we see that sellers who use both MCF and FBA send 2.9 times more inventory to Amazon1 than sellers who don’t use both services. By doing this, they reduce the likelihood of overstocking or stockouts on any of their ecommerce channels.
And the more inventory you send to Amazon, the better, because once Amazon receives your inventory, we strategically distribute it across our network of fulfillment centers, so it’s as close as possible to your customer base.
Our machine learning-based inventory management system automatically determines where to position your inventory across our fulfillment network, based on numerous factors, including demand forecasts and historical sales data.
With your inventory consolidated into a single pool that can be used for all your orders and distributed optimally across Amazon’s network of fulfillment centers, so it’s near your customers, you are ready and able to utilize that stock to meet demand across all your channels and markets.
Reason #2: Improved inventory availability and turnover
Using MCF and FBA together can enable you to improve your inventory availability and utilization.
Having your inventory consolidated into a single pool that’s distributed strategically across Amazon’s fulfillment network allows you to optimize:
- Inventory availability: You can ensure you have the right amount of the right products in the right places at the right times— so that you can satisfy demand from all your ecommerce channels and help prevent stockouts.
- Inventory turnover: You can expose the same pool of inventory to all your channels—including Amazon.com, other ecommerce marketplaces, your brand websites, and social media stores—thereby increasing the likelihood that it will be sold faster. Sellers who use both MCF and FBA are able to improve inventory turnover by an average of 12%.1 And improving inventory turnover can free up working capital that you have tied up in your inventory—allowing you to use those funds to unlock opportunities for business growth.
By committing more of your inventory to Amazon and leveraging both MCF and FBA to fulfill your orders, you can maximize the utilization of your stock—dramatically decreasing your out-of-stock risk and increasing your inventory turnover rate.
Reason #3: Faster delivery promises and increased chance of products appearing as featured offers
Finally, using MCF with FBA can help fuel your Amazon.com revenue growth. Having your products in stock and strategically positioned across Amazon’s fulfillment network will help you:
- Make faster delivery promises on Amazon.com, because your stock will be located as close as possible to your customers’ doorsteps. Being able to make faster delivery promises can help boost shopper conversion – as, according to recent research, 22% of online shoppers abandon their carts during checkout because the delivery options are too slow.
- Increase your chances that your products appear as featured offers on Amazon.com.
As part of the ASCS’s broader end-to-end supply chain solution, MCF and FBA are both powerful services, which allow you to leverage Amazon’s world-class fulfillment network to rapidly and reliably deliver customer orders and help you to drive bottom-line growth.
Using FBA and Multichannel Fulfillment can help you grow your ecommerce business across all your sales channels, enabling you to delight customers by giving them the fast, reliable Amazon order fulfillment experience that they know and love.
With MCF and FBA, businesses have been able to boost their Amazon.com sales by:
- Consolidating inventory into a single pool for multichannel fulfillment
- Distributing inventory across Amazon’s network of fulfillment centers so it’s as close as possible to customers
- Improving inventory turnover rates by an average of 12%1
- Increasing chances of having products appear as featured offers on Amazon.com
Learn more about MCF and FBA, and how they can help your business streamline ecommerce order fulfillment.
1Based on trailing twelve-month data from 590,000 sellers who shipped more than 100 units with FBA throughout 2023, comparing performance between sellers using both MCF and FBA versus those using FBA only.
