Multi-Channel models not only increase reach and sales, they also make your business independent of single marketplace.
Fulfillment is the foundation of your long-term success, when relying on FBA isn’t enough anymore. Choosing the right model isn’t easy, when so much depends on picking the right mix between FBA, specialized 3PLs and your own operations.
There are 5 general points to consider by any business to answer that question:
1. How many marketplaces am I using?
2. Where are my suppliers?
3. In which countries do I sell?
4. Do I want to restrict certain products to certain marketplaces?
5. How much margin do I have?
Answering the first question gives you a basis for your fulfillment model. For example, if your main business happens on Amazon, all other marketplaces can be served from one central inventory at a specialized 3PL, including replenishment of your FBA stock.
The second question is important, because oversea suppliers extend your supply chain and require tight control of inbound flows. Domestic suppliers on the other hand, can supplement your fulfillment by becoming dropshippers or by directly replenishing FBA inventories.
For EU-based companies, this question is two-fold. Do you want to sell only nationally or across the EU? And do you want to sell outside the EU? For pan-EU sales, FBA can make live a lot easier. For sales outside the EU, 3PLs may be better suited. Just be mindful of the added complexity. Export operations mean higher costs and require specialized knowledge. Be sure your international strategy justifies that.
The fourth question is important to decide where to put inventory. If there are no restrictions, only the fast moving articles can be tagged for FBA, while all other marketplaces ad lower moving articles are shipped from one central inventory. If certain articles are dedicated for certain marketplaces, all inventory can be put in e.g. FBA or comparable services.
And finally, whatever set-up you choose, it has to be cost efficient. How much margin you have on your products defines the limits of your fulfillment set-up. High margin articles can support all kinds of things, from express and same day deliveries to scheduled delivery slots. Low margin articles are more restricted without adding shipping costs.
Finding the right mix, and constantly adapting this mix, is important for long-term success and good customer experience, as is the operational management. Which brings us to the last point, making sure whatever set-up is chosen can be supported on a daily basis. FBA-only set-ups are very easy, Amazon is taking of that already to a large degree. The more partners are added, the more attention fulfillment needs. It is counter-intuitive, but yet another partner, an independent forth party taking care of daily operations, can be a solution.
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