FBA vs 3PL: Which Is Right for Your Business?

If you’re stepping into the e-commerce arena, you need some way to get your product to your customers.  While handling shipping yourself might be desirable at first, as business grows there’s going to be an increasingly intensive need to expedite the process.

That’s where third-party shipping options come in, and topping the list is Amazon fulfillment, or FBA.  Is trusting your brand and products to Amazon the best choice for you, or is choosing standard third-party logistics a better option?

Pricing

Business owners who have started out shipping their own products understand what costs are associated with both storing and transporting material goods.  Third-party logistics (3PL) separates these charges into four main categories:

  • Storage
  • Picking (having someone find and package your goods)
  • Packaging materials
  • Shipping costs

Fulfillment by Amazon bundles these expenses into one price, simplifying expenditures at the cost of individual itemization value.  While this multichannel approach can be beneficial and reduce overall pricing complexities, it may not be the least expensive option for high-volume shippers, but can be advantageous for small to mid-sized businesses.

See Amazon’s Fulfillment by Amazon pricing here

See Amazon’s Multichannel Fulfillment pricing here

Amazon also has a unique Fulfillment by Amazon Revenue Calculator that is intended to help compare Amazon fulfillment pricing to fulfillment pricing from a 3PL.

Involvement

Working with a big company like Amazon has its perks, and one of them is efficiency.  The company has been in the business of shipping for a long time and has streamlined the process immensely.  The tradeoff is that you have to settle for its methodology, which may be challenging from a branding perspective, and may require some additional time initially.

Choosing a 3PL definitely gives you more control.  With a good shipping company, you get to decide exactly how your items are packaged, what type of materials are used and even what method is used for transport.  Having that kind of involvement can help you connect more with your customers and really personalize the shipping process as well.

Branding

Amazon is a brand in and of itself, and when you get a package shipped by it, everyone who can see your doorstep knows.  Because it’s a trusted name, many small businesses prefer Amazon fulfillment because they know their goods will get there on time and packaged properly.

What you lose by going through FBA is individuality.  Items become associated with Amazon instead of your business, and if you’re trying to build a brand then you’re essentially competing with your shipping company.  A 3PL often allows for customized packaging, so if you want your name on the side of the box, it’s the best way to go.

When it comes to speed of shipping, there may be little difference between FBA and 3PL options.  If you’re more concerned about keeping products associated with your business’s brand and having more control over shipping in general, visit eFill today.  Our team is ready to help you find the best 3PL solution, and parcel shipping that fits your business! Additionally, reach out to our Global Logistics and eCommerce parter, VIEWDIA if you are looking for someone to help you manage your global logistics and eCommerce solutions.