You want to take your ecommerce business to the next level, but you’re not sure if you should use a 3PL or FBA to fulfill your orders. Both 3PLs and FBA have their pros and cons, and it can be difficult to decide which is the right option for your selling needs.
In this article, we will cover everything you need to know about 3PL vs. FBA – so that you can make an informed decision about which option is best for your business. Let’s dive right in!
Use this outline to skip to any section of this page:
- What’s the difference between 3PL and FBA for selling on Amazon?
- Amazon FBA: Pros
- Amazon FBA: Cons
- 3rd-Party Logistics: Pros
- 3rd-Party Logistics: Cons
- Which is better for selling on Amazon… 3PL or FBA?
What’s the difference between 3PL and FBA for selling on Amazon?
3PL warehouses and fulfillment centers are those that are used by businesses to store and manage their inventory (often across multiple channels). When a business decides to use a 3PL warehouse, they are outsourcing the responsibility of storing, managing and shipping their inventory to the 3PL provider. This can be helpful for businesses that do not have the time or resources to manage their own inventory, or for businesses that are looking to scale their operations across multiple selling platforms.
With a 3PL provider, you can still sell with Amazon Prime, but you have to use seller fulfilled prime (check out this Seller Fulfilled Prime vs. FBA article to learn more).
Amazon FBA is a streamlined fulfillment service similar to 3PLs – it allows businesses to send their products to an Amazon warehouse for storage, handling and shipping. When a customer places an order, Amazon will handle the shipping and delivery for the product. FBA can be helpful for businesses that want to take advantage of Amazon’s massive customer base with Prime shipping – while also selling multi-channel too (outside of Amazon).
With FBA, you can still have your (Shopify, eBay, Walmart, Etsy, etc.) orders fulfilled outside of Amazon too, but the costs will vary depending on the complexities of your orders and fulfillment needs.
Amazon FBA: Pros
Cheaper shipping fees
When it comes to shipping costs, Amazon FBA is the clear winner. By using Amazon FBA, businesses can take advantage of Amazon’s lower shipping rates, which are often much cheaper than the rates offered by third-party logistics (3PL) providers. This can save businesses a lot of money on shipping costs, which can be a major expense for ecommerce businesses.
In addition to lower shipping rates, Amazon FBA also offers businesses other benefits, such as access to Prime members, who are more likely to buy items from Amazon than from other websites. Businesses that use Amazon FBA also benefit from Amazon’s customer service and fulfillment infrastructure, which helps them reduce the amount of time and resources they need to spend on order fulfillment.
Overall, Amazon FBA is a great option for ecommerce businesses that want to save money on shipping costs and improve their customer experience.
Robust fulfillment network
When it comes to fulfilling orders, Amazon FBA offers a more robust fulfillment network than using a 3PL. With Amazon FBA, you can tap into Amazon’s extensive logistics network, which includes dozens of fulfillment centers across the globe. This allows you to reach more customers in more countries than you could if you were relying on a 3PL.
Another advantage of using Amazon FBA is that you can take advantage of Amazon’s world-class fulfillment and seller support. Amazon is known for its exceptional service, and this can be a major selling point for your products. With Amazon FBA, you can rest assured that your customers will receive their orders quickly and reliably.
Overall, Amazon FBA offers a number of advantages over using a 3PL to fulfill orders. If you’re looking to expand your business into new markets, Amazon FBA is the ideal solution.
Easier to drive sales on Amazon
When it comes to fulfilling orders, Amazon FBA makes things a lot simpler and easier when compared to using a 3PL. With Amazon FBA, you can drive sales on Amazon since all of your inventory is stored in Amazon’s warehouses. This means that when someone orders from your product listing, Amazon will take care of picking and packing the order for you and then shipping it to the customer. This takes away a lot of the hassle and uncertainty that comes with fulfillment.
Since using a 3PL can be more complex and difficult to manage, using Amazon FBA can be a great way to simplify things and ensure that your sales are driven through Amazon. Not only does this take care of the fulfillment process for you, but it can also help increase your visibility on Amazon since Amazon will rank your product higher when it’s sold through their platform.
Amazon customer support
When you use Amazon FBA to fulfill your orders, you have the benefit of Amazon’s world-class customer support. If there is ever a problem with an order, customers can contact Amazon’s customer service department for help. This can be extremely helpful if there is a problem with an order or if the customer needs assistance with something related to their order.
3PLs do not offer Amazon’s customer support, so if there is a problem with an order or if the customer needs assistance, they will need to contact the 3PL directly. This can be frustrating for customers if they don’t know who to contact or if they have trouble getting in touch with the 3PL.
Overall, using Amazon FBA to fulfill your orders is a great way to ensure that you have access to Amazon’s world-class customer support. This can be extremely helpful if there are any problems with orders or if the customer needs assistance with something related to their order
Amazon FBA: Cons
Not as efficient for sales outside of Amazon
When it comes to fulfilling orders for ecommerce businesses, Amazon FBA is a great option for businesses that sell products through Amazon. However, Amazon FBA is not as suitable for businesses that sell products through other platforms such as Shopify, eBay, etc.
This is because Amazon FBA specializes in orders to be placed through Amazon, which can limit the customer base for businesses that sell products outside of Amazon. And while you can still ship orders outside of Amazon, their FBA program isn’t cost-effective for doing so.
When using Amazon FBA, it is important to be aware of the strict requirements. These requirements are in place to ensure that products shipped through Amazon FBA meet certain standards and are of the highest quality. If products do not meet these standards, they may be removed from Amazon’s inventory.
Some of the requirements that sellers must adhere to include:
- Products must be new and in their original packaging
- Products must be correctly labeled with all information required by Amazon
- Products must meet Amazon’s quality standards
Meeting these requirements is essential for sellers who want to ensure that their products are sold through Amazon FBA. Failing to adhere to these requirements can result in products being removed from Amazon’s inventory, which can be costly and damaging to a business.
Limited seller support
When it comes to Amazon FBA, one of the main drawbacks is that there is limited support available for sellers. If you have any questions or need assistance with anything related to your account or orders, you will need to contact Amazon directly. This can be frustrating if you are trying to troubleshoot an issue and need help, as you may be left waiting for a response from Amazon.
The support that is available can be tricky to navigate, so it can be difficult to get the answers you need. This lack of support can be a major downside for those who are new to Amazon FBA or those who are not familiar with the platform.
3rd-Party Logistics: Pros
Better for multi-channel sales
Multi-channel selling is when a business sells products on more than one sales platform. There are several benefits of multi-channel selling:
- Reach more customers
- More control over their inventory
- Centralize inventory and fulfillment
- Streamline multi-channel sales across the ecommerce landscape
There are several benefits of using a 3PL provider for multi-channel selling. First, 3PL providers are experts in shipping and fulfillment. This means that they can help businesses save time and money when shipping products to customers. Second, 3PL providers offer warehousing, prep and storage services (often at cheaper costs compared to FBA).
This means that businesses can store their products at the 3PL provider’s warehouse, which will free up space in their own warehouse.
3PL providers offer order tracking and tracing services. This means that businesses can track where their products are at all times and they can find out where any order is in the fulfillment process.
So, which is better for multi-channel selling: using a 3PL provider or using Amazon FBA? The answer depends on the business’ needs and preferences. 3PL providers are better for businesses that need help with shipping and fulfillment or that need extra storage space for their products. Amazon FBA is better for businesses that want to focus on Amazon’s marketplace or that want Amazon to take care of shipping and fulfillment for them.
Dedicated seller support
When it comes to choosing a third-party logistics provider (3PL), support is key. Sellers need a partner who can help them grow their business and navigate the ever-changing landscape of eCommerce. 3PL providers may offer better support than Amazon FBA, which can often be unresponsive and unhelpful.
3PL providers are experts in shipping and fulfillment, and they can help sellers optimize their supply chain beyond Amazon FBA. They have the experience and resources to handle any shipping challenge, big or small. Sellers can rely on their 3PL provider for dedicated seller support, from order processing to delivery.
Centralized storage & fulfillment
When it comes to fulfillment and storage, 3PL providers often have more cost-effective options than Amazon FBA.
With FBA, you are charged by the cubic foot for storage, which can add up quickly if you have a large inventory. Some 3PL providers will often charge a flat rate, regardless of how much space you use, making it a more affordable option for businesses with a large inventory.
This allows you to shop around and find a 3PL provider that offers the customized pricing, instead of Amazon FBA’s rigid pricing that may not be optimal for your inventory.
With FBA, you are responsible for shipping your products to Amazon’s warehouses, and then Amazon will ship them out to customers. With a 3PL provider, the provider will handle all of the shipping for you. This can be especially helpful if you are selling products internationally, as shipping can be expensive and complicated.
Overall, 3PL providers may offer a more cost-effective and convenient option for fulfillment and storage than Amazon FBA – depending on your needs and complexity. If you are looking to reduce costs and simplify your shipping process, a 3PL provider could be the best option for you.
3rd-Party Logistics: Cons
Lackluster FBA prep capabilities
When it comes to fulfillment by Amazon (FBA), third-party providers are often recommended for their ability to prep and ship products to Amazon’s warehouses. However, many of these providers offer poor services in this area, which can lead to missed deadlines and inventory shortages.
One common issue is that these companies often do not have the necessary infrastructure in place to handle large volumes of orders. This can result in long processing times and missed shipping deadlines. In some cases, products may even be shipped late to Amazon’s warehouses, leading to inventory shortages.
Another issue is that many third-party providers don’t have deep experience preparing products for FBA. This can lead to products being incorrectly labeled or prepared, which can cause delays when they are received by Amazon. Ultimately, using a third-party provider for FBA prep can be risky and may not provide the same level of service as using an FBA prep service like ZonPrep.
No customer support provided by Amazon
When you use a 3PL provider to ship your Amazon products, you lose access to Amazon’s customer support services. This means that if there is an issue with your order – whether it’s shipping late or arriving damaged – you won’t be able to rely on Amazon’s team of experts to help you resolve the problem.
Instead, you’ll need to handle the communications yourself, – or contact the 3PL provider directly, which can often be a frustrating process.
Keep in mind – if something goes wrong with your order and you’re not happy with the 3PL provider’s response, you won’t be able to take your complaint to Amazon. This can be a major downside for businesses that are looking for a comprehensive shipping and customer service solution.
Limited fulfillment center locations
When it comes to choosing a third-party logistics (3PL) provider, one of the most important factors to consider is the number of warehouse locations that the provider has. This is because 3PL providers typically have limited warehouse locations, which can lead to increased shipping costs. Amazon FBA, on the other hand, has warehouses in almost every major city in the USA, which can reduce your shipping costs.
When you store your products in an Amazon warehouse, you’ll need to send them to one of Amazon’s fulfillment centers. Once they arrive, they’ll be put into stock and will be available for sale on Amazon.com. You can also choose to have Amazon ship your products directly to your customers’ homes. This option is called Fulfillment by Amazon (FBA) and it comes with a number of benefits, including lower shipping costs and faster delivery times.
And with faster delivery times, you can expect greater sales and better reviews – which helps snowball your business and grow quicker.
When it comes to using a third-party logistics (3PL) provider, there can be higher fees associated with that service, compared to using Amazon FBA. That’s because 3PLs provide a more comprehensive range of services, including order fulfillment, inventory management, and shipping. In some cases, using a 3PL can even save you money, as they may be able to get your products to market more quickly and efficiently than if you were to handle fulfillment yourself.
That said, it’s important to do your research before choosing a 3PL provider. Make sure you understand what services will be included in your contract, and ask for quotes from a few different providers so you can compare prices. Also be sure to read reviews from other businesses that have used the same 3PL provider you’re considering. This will give you a good idea of what to expect in terms of quality of service and pricing.
In the end, the decision of whether or not to use a 3PL provider is up to you. But if you’re looking for a more comprehensive solution that can save you time and money, a 3PL may be the right choice for your business.
Which is better for selling on Amazon… 3PL or FBA?
Most Amazon sellers prefer to stick with FBA – since it’s easier to grow and scale your business with Amazon, while still selling multi-channel.
Remember – there are a few benefits of using FBA over 3PL:
- FBA takes care of all the shipping and handling for sellers. This can be helpful for sellers who don’t have the time or resources to handle shipping and handling themselves.
- FBA helps sellers reach a wider audience, as products that are stored in Amazon’s fulfillment centers are eligible for free two-day shipping.
- Finally, using FBA can help Amazon sellers increase their product rankings and sales in a marketplace loaded with shoppers.
Overall, FBA is a helpful tool for Amazon sellers who are looking to grow and scale their business. The benefits of using FBA make it an appealing choice for many sellers, and it can help sellers reach new heights with their business.