MAXIMIZING AMAZON FBA PROFITABILITY: WINNING THE BOTTOM LINE WITH LOGISTICS

Maximizing Amazon FBA Profitability

MMany Amazon agencies talk about how they are “killing it” with Amazon advertising creating skyrocketing sales for their clients. We can appreciate how many agencies and consultants optimizing the Amazon Advertising platform. Having this competency in-house or through a trusted partner is critical to growth on the Amazon platform.We are going to discuss ways to maximize your Amazon channel’s profitability from the logistics point of view. While you see the success of your Amazon advertising, you want to make sure your bottom line crushes it with Amazon as well.As many FBA sellers have noticed, Amazon has increased their storage fees both off-peak $0.75 and peak $2.40 per cubic foot (compared to $0.44 per cubic foot at Greenline). At the same time, Amazon is restricting the amount of inventory you can ship into Amazon. For domestic and international Amazon FBA sellers, that poses two challenges.How do import products into Amazon cost-effectively?With accelerated air freight costs and unstable transit times, how do you ship products to Amazon at a higher frequency?While you can have your Amazon advertising team “killing it,” having all your profits can be easily washed away by not properly managing your logistics strategy. Here are a couple of recommendations from Greenline:

Here are a couple of recommendations from Greenline:

Plan sea shipments
Yes, we are still seeing extended lead times to get products into the port, but this does require discipline to plan out your business. This means planning an additional 90 days out but you can save 75% on your shipping costs if you build in this discipline.

Find USA manufacturing partners
USA manufacturing is going to be competitive, especially when you look at the big picture of your total costs.

Partner with a local 3PL to schedule Amazon shipments
Not all 3PLs and logistics providers are the same. Many of the big box 3PL providers focus on just eCommerce pick, pack, and ship. Large scale 3PLs offer very competitive rates, but do not offer customization and are not structured to offer real-time customer service. This can cause additional touch costs by the 3PL to be excessive.

Amazon Multi-Shipping Strategy 
Putting 100% of your stock into FBA may not always be the right thing for your business. Allocate stock for FBM (Amazon Fulfilled by Merchant) so you can also have that stock available for direct or one-off sales opportunities. Remember the closer to the holiday season you get, the harder it is to get that stock back.

Think Omni-Channel
The retail partners are fully adopting a digital-first strategy. Be open to these channels and see which retail partner may be a fit for the brand. Understand where your customers like to shop and see what those supply chain requirements are to see if it is the right fit for your business.

How Greenline Can Help

Find a 3PL provider that will be your partner and understand your business. Greenline’s long history of helping brands with the sales and marketing on Amazon gives our team a unique understanding of the Amazon ecosystem.

If you would like to learn more about how Greenline helps FBA sellers scale and maximize profitability from the logistics point of view, contact us atlogistics@gotogreenline.com or visit  https://gotogreenline.com/logistics.