With e-commerce now worth an estimated $220 billion dollars per year in the United States alone, it is no surprise that the internet has seen a rapid increase in online stores selling everything from shoes, to toys, to assorted home-care goods.
One site in particular has been grabbing headlines for the past few years however, and while it is not new by any means, it is moving quickly to become the biggest retailer in the world.
That site is, of course, Amazon.
With around 183 million visitors each month, Amazon is a sellers dream and not only allows almost anyone to list a product for sale, but also offers a unique fulfillment solution known as Amazon FBA (Fulfillment by Amazon).
It is one of the most advanced fulfillment networks in the world and allows sellers to send items to Amazon warehouses across the US where they will then ship out to customers.
This is a great system and when it is paired with low-cost products manufactured in China is a match made in heaven. However, one of the most common questions (especially among newcomers to e-commerce) is how on earth to effectively get shipments of products from China to Amazon FBA.
Shipping Goods from China – What are the Options?
When you want to ship products from China to Amazon FBA, you have two options. The first is to have the products sent directly from the supplier to Amazon’s warehouses, or to have them sent to you/a US-based fulfillment company first. Each option has its pros and cons and in this post we will discuss both.
Pros & Cons of Shipping Directly to Amazon FBA
Shipping directly to the FBA warehouses from China offers a few pros, but realistically more cons than it is worth. For example, shipping direct brings less transit time, but also widens the window for errors and quality control issues. We will discuss each pro and con below.
Less Transit Time
Shipping directly from your supplier to Amazon FBA comes with the benefit of less transit time for your products as they go from manufacturing to customers. This is great if you are in a time crunch and want to get your items to the warehouse and out again as fast as possible. However, by not stopping at a fulfillment company (or yourself) first, you are losing out on critical quality control.
Duties & Freight must be Prepaid
Shipping hundreds of products can get expensive and Amazon knows this, which is why they pay for absolutely none of those costs. In fact, if you send them a shipment and they get charged any amount of money for it, they will reject the shipment all together and you will still be stuck with the bill (plus all the extra costs).
If you are intent on shipping to Amazon FBA directly, you will need to ensure that your products are Delivered Duty Paid (DDP), which basically means you are responsible for all of the costs associated with transporting your goods (shipping, insurance, duties etc.).
Unable to Inspect Products prior to Arrival at Amazon
The biggest (and potentially most business-damaging) pitfall of shipping from China directly to FBA warehouses is that you are unable to run proper quality control/inspection on your products. While many sellers enlist the help of third party inspection companies, there are still a staggering amount of errors that happen when your products do not have that secondary set of checks.
When errors do get through, it could lead to unhappy customers, refunds, and (worst of all for an online business) a ton of negative reviews.
Pros & Cons of Using a 3rd Party Fulfillment Company
The alternative to shipping directly to Amazon is using a US-based third party fulfillment company or sending the items to yourself first. In most cases however, sellers do not have the time to manually inspect their own products, and opt to use a third party company instead. This saves them time, money, and decreases the chance for errors and rejected shipments; but also increases the amount of time products take to arrive at the warehouses.
Shipments take Longer to Arrive at Amazon
The biggest con that comes with using a third party fulfillment company to handle your shipments is the added time it will take for the products to reach the FBA warehouses. The time difference occurs because the middleman must first receive your products, prepare them, and then send them to Amazon. In general this will add about a week – two weeks to the time it will take your products to get to FBA compared to shipping directly from China.
Increased Quality Control
Having an extra set of eyes checking your products before they arrive to FBA can mean the difference between customer complaints/rejected shipments and everything going smoothly.
This increase in quality control is one of the primary reasons many FBA sellers choose to use a fulfillment company as a buffer between suppliers in China and Amazon, and is the recommended choice for beginners and those who want a decrease in rejected shipments.
Reduction in Rejection by FBA
While Amazon’s packaging and labeling requirements aren’t terribly stringent, they do want individual items to have scannable barcodes (FNSKU’s) and each box to have a carton label attached. If mistakes are made, they will generally correct them for you, but you will be charged. Third party fulfillment companies do the labeling for you, which decreases error rate at the warehouses and ultimately will save you money. They also eliminate the need to organize shipping costs, which ensures that products do not arrive at Amazon with an outstanding balance (meaning your shipment will not get rejected from the warehouse).
When to use a China to FBA Middleman
The decision is ultimately up to you and what is best for your business. Below are summaries of the two options discussed above.
Option 1: Ship Directly to FBA
Ship directly to FBA if you:
- Are shipping a relatively low quantity of items
- Have worked with your supplier for a long time (and trust them)
- Utilize a third party inspection company overseas that does a good job
- Have calculated the costs and know it will be cheaper to ship directly
Option 2: Use a Reliable Third Party Company
Consider calling a middleman if you:
- Are new to the industry
- Are sending large quantities of products at a time
- Want to eliminate shipment rejection
- Want a structured shipping schedule
- Consider eliminating packing errors a top priority
- Have calculated the costs and find it cheaper to ship to a middleman