Direct fulfillment is a new and revolutionary method through which e-commerce platforms can now make their supply chain much more efficient. Through this method, the sellers can send the products directly to the customers without going through unnecessary routes. This is a streamlined approach that is made to ensure that there is less time taken for the customers to get their orders and is a much more reliable method.
In this article, we have mentioned everything you need to know about direct fulfillment and the benefits of it. So, let’s jump right into the article and have a look at it.
What is Direct Fulfillment?
Direct fulfillment is the model through which the sellers have to send the products to the customers directly. This is the perfect way to reduce the delay in shipping and skip unnecessary delivery pathways. Hence, this is an amazing model that allows the business to streamline its logistics.
What is Amazon Direct Fulfillment?
Now, what is Amazon Direct Fulfillment, and how does it help with direct-to-consumer fulfillment? Amazon direct fulfillment is basically a retail dropshipping program that Amazon arranges. This means that when a customer places an order through the Amazon website, then Amazon will forward the order to the vendors that can provide the same products. From here, the vendor will directly send the products to the customers.
When a vendor opts for Amazon direct fulfillment, then Amazon will purchase the products from the vendors wholesale. They will then take care of the marketing. Hence, this is a beneficial way for vendors to sell their products under the name Amazon.
Amazon Direct Fulfillment vs Fulfilled by Amazon (FBA)
Below, we have mentioned some of the major differences between Amazon direct fulfillment vs fulfillment by Amazon.
Inventory Location
The first difference between Amazon’s direct fulfillment and fulfillment by Amazon is that the inventory location is different. For Amazon direct fulfillment, the inventory remains at the seller’s warehouse. However, if they require sellers to send their products to Amazon fulfillment centers, they manage all the storage and inventory.
Shipping Responsibility
In the case of direct fulfillment, the shipping responsibility for the packaging of each order is on the seller. This means when the order is placed, the seller has to package the order and ship it directly to the customer. On the other hand, fulfillment by Amazon takes care of the entire process and packages and ships the products directly to the customers.
Packaging Control
Direct fulfillment offers sellers full control over the packaging. They can easily customize the package according to their need, add different promotional materials, and have full control over the packaging. However, with FBA, there is standardized Amazon packaging, which limits the customization and personalization of the brands.
Customer Services and Returns
Amazon direct fulfillment handles customer service for the sellers, but the seller generally manages the returns. If you are using Amazon’s FBA service, then they take care of both customer service and even returns, making the entire process much simpler for the sellers.
How Does Direct Fulfillment Work?
Below, we have mentioned the entire process of direct fulfillment, so let’s have a look at it.
Order Placement: The process begins when the customer places an order on Amazon for the product that is listed. If the product is from the direct fulfillment program, then Amazon will route the order to the vendor.
Order Notification: Amazon will send all the information to the vendors, such as customer information, shipping information, and the prepaid Amazon branded shipping label.
Picking and Packing the Order: Once all that information is received by the vendor, they will start picking the products from the warehouse and securely packing them according to Amazon’s standardized packaging.
Shipping the Order: The vendors will now ship the order quickly within 24 hours to meet Amazon delivery standards. The item is directly shipped from the vendors to the customers to reduce the time and ensure that the customers are getting the product quickly.
Customer Service: Customer service is handled by Amazon. This means that Amazon processes Amazon processes the return request and all the inquiries and complaints.
Inventory Management: The management of the inventory comes under the responsibility of the sellers. They have to ensure that the inventory data is accurate and updated in real time.
Direct Fulfillment vs Indirect Fulfillment
When it comes to order fulfillment, there are two different types of models that a business can choose from – direct fulfillment and indirect fulfillment. Below, we have mentioned all the major differences between these two models so that you can pick the one that is right for you.
Inventory Management
Direct recruitment is when the sellers ship the products directly from their warehouse to the customers. However, indirect fulfillment requires the sellers first to send the inventory to a centralized fulfillment center. These fulfillment centers will then manage the entire order and ensure that the customers get the orders.
Shipping and Delivery
If you’re choosing direct fulfillment, then the shipping and delivery speed depends on the seller. This means that it can vary according to the capabilities of the vendor. On the other hand, indirect fulfillment offers much faster delivery and shipping to the customers.
Control and Customization
If you are trying to have more control over your packaging, then direct fulfillment is the best model for you. Here, you will have complete freedom on the packaging, branding, and inserts, allowing you to add personal touches. However, with indirect fulfillment, standardized packaging will be used on all the packages.
Direct Fulfillment vs Dropshipping
Below, we have mentioned some of the major differences between direct fulfillment and dropshipping.
Inventory Management
In direct management, the seller will hold the inventory and manage all the orders themselves. However, in dropshipping, the supplier will have the inventory, but the seller never sees or handles the inventory physically.
Upfront Investment
When it comes to investment, direct fulfillment requires a good amount of investment. This will cover the inventory, storage, and all the logistics. Dropshipping, on the other hand, has minimal upfront investment, which is great for small businesses.
Control
Direct fulfillment sellers have full control over the shipping speed, quality, and packaging. Drop shipping is managed by the supplier, which means there is limited control from the seller’s end.
Shipping Speed
The shipping speed of direct fulfillment is much quicker and faster than that of dropshipping, which involves longer degree times, especially when the supplier is from overseas.
Scalability
Dropshipping is easier to scale because you don’t require warehousing or logistic expansion. On the other hand, direct fulfillment can be more complex and costly when it comes to scalability.
Customer Experience
As far as customer experience is concerned, direct fulfillment is more consistent and offers better customer service. Drop shipping is known for inconsistency in packaging delays, and also sometimes, it can cause quality issues.
Benefits of Using a 3PL for Direct Fulfillment
Following are some of the major benefits of using 3PL for direct-to-consumer fulfillment.
Decreases Operational Burden
Third-party logistics can help with fulfillment and take over the main processes, such as the warehousing, picking, and packing of the products, as well as shipping. This will allow businesses to focus on other aspects of their company operations.
Scalability
3PL for direct fulfillment offers much more chances of scalability and flexibility. In the peak season, when there is a sudden demand for products, 3PL can quickly adapt and ensure that the customers can receive their orders in the promised time.
Cost Efficiency
3PLs are also considered as a much more cost-effective method. This is because they often reduce the shipping and storage cost if you are using the back shipping dates and optimize the warehouse operation. This allows businesses to save money and increase their profits.
Faster Shipping
Another major benefit of 3PL is that it offers much faster shipping and more geographic reach. This means that the customers will have a quicker service, and this will also increase customer satisfaction.
Optimize Direct Shipping with NextSmartShip
Direct fulfillment can be great for small businesses, and this is where NextSmartShip comes into action. They help streamline e-commerce businesses by offering fast, flexible, and cost-effective shipping solutions. NextSmartShip is known for its amazing services, which allow companies to leave their logistics to them and focus on other aspects of the business. This means that NextSmartShip will help with the picking, packing, shipping, and customer services to the companies so that the customers can have a better shopping experience.
Conclusion
Direct fulfillment is a powerful method through which supply chains can streamline their productivity. Direct fulfillment is great if you want to reduce delays and improve order accuracy while enhancing customer service. It also offers better control over the inventory and the packaging of the products. Therefore, if you want to improve your business, then direct fulfillment is an amazing option for you, and you can also check out NextSmartShip for its amazing services.
