Benefits of Direct Fulfillment from Amazonwp_admin
Amazon Vendor Central is the platform for Suppliers to manage their orders from Amazon
Seller Central, Fulfilled by Amazon, Vendor Central
Amazon has many channels of selling for suppliers
Seller Central: Suppliers manage their listings by themselves. Amazon only provides a platform to display the product and sell it. Prices are decided by the suppliers. They compete against other suppliers who sell the same product. Shipping the product in time is the responsibility of the supplier.
Fulfilled by Amazon (FBA): This is also using seller central platform and price decided by the seller. But inventory is maintained by Amazon. Suppliers are expected to ship the products in advance to Amazon Distribution Centers (DC). Amazon ships the products from its warehouses instead of sellers shipping it.
Vendor Central: This is the purchasing platform for Amazon. Sellers can join vendor central only if Amazon invites them to become part of this program. In this program, Amazon sells the products in its name. Amazon issues bulk purchase orders to suppliers every week. Suppliers are expected to ship the orders to Amazon Distribution Centers. Amazon decides the price of the products and keeps the margin. This will be a volume business for suppliers as they get bulk assured orders every week. But the price
Amazon pays to its suppliers may be lower than the market price. It’s a tradeoff between price and volume
Vendor Central Direct Fulfillment: This program is also by invitation only. In this program, Amazon does not stock the items but still sells it in its own name. Stock is maintained by suppliers in their location. Suppliers are to update the available inventory frequently. When Amazon gets an order from the online shoppers, it turns it around and sends a purchase order to the actual supplier. Actual supplier is expected to ship the items under Amazon name directly to the buyers. So, material does not go through Amazon Warehouse
Benefits of Direct Fulfillment process to suppliers
According to Amazon, there are many benefits to the suppliers in the Direct fulfillment program.
Direct Fulfillment gives you the opportunity to add all your selection to Amazon’s catalog and make it available for our customers to shop online.
- Adding these products to your Direct Fulfillment catalog will provide out of stock protection. This will not impact your current purchase orders.
- Trusted brand – Your products are displayed as “Ships and Sold by Amazon.”
- Increased number of ASINs – Make your entire catalog available to customers.
- Selection added instantly – You don’t have to wait for a PO to start selling products.
- Out of stock protection – You always have an offer available to the customer.
- Hassle free returns – Amazon handles all customer service and returns for you.
- No outbound shipping costs – Amazon pays all shipping fees.
EDI for Processing Amazon Orders
Doing business with Amazon comes with a price. Speed and Accuracy.
In addition to shipping the product quickly and accurately, suppliers are expected to provide status update on the orders frequently.
Order Confirmation: Each order need to be confirmed as soon as it is received. Confirmation will include fill or kill, partial shipment, delayed shipments etc.
Routing Request: As amazon pays for most of the inbound shipment, suppliers are to contact amazon to assign the freight forwarder for the shipment. This is called routing request
Advance Ship Notice: As soon as the material is shipped, suppliers should provide details of what has been shipped, tracking number details. This notice should have detailed information like how the shipment has been packed, what items are included, quantity etc.
Invoice: This is the last step. Suppliers are to submit an invoice in the vendor central portal for payment
All this is lot of manual and timely work. Adding EDI (Electronic Document Interchange) to this process reduces the manual work and improves accuracy.
Using a system like TPSynergy (https://www.tpsynergy.com/integrations) adds the automation to the process. While the transactions are done in the system and labels are printed from the system, EDI also processed. So, no additional manual work needed