Updated fulfillment options with Multi-channel fulfillment (MCF) on Amazon and Walmart’s Fulfillment Service (WFS) emerging solution can be valuable tools for sellers as we approach Q4.
The way to realize the greatest advantage of these services, and minimize any headaches, is to match your strategy to your underlying business.
In this webinar, Teikametrics is joined by Zentail to provide a detailed overview of these latest developments across Amazon and Walmart.
We cover key tactical and strategic elements that inform the value of fulfillment options to your business, along with a structured checklist around fulfillment you should consider for your holiday season planning.
Here’s what we cover
- The latest on Amazon Multi-Channel Fulfillment, and why it matters
- Observations on Walmart’s Fulfillment Service, and what sellers should know
- Key operational trends from 2021 that should color your holiday fulfillment plans
- A holiday checklist for fulfillment in advance of the upcoming shopping season
- Follow Liz Downing, Ecommerce Marketing Manager, Teikametrics
- Follow Michael Goldmeier, Director of Sales, Zentail
Watch the Fulfillment Webinar Replay
Key Fulfillment Terms
Liz and Michael used a lot of acronyms when talking about ecommerce fulfillment. Here are brief definitions of the ones they used frequently.
Fulfillment By Amazon (FBA)
Amazon’s product storage, packing, and shipping program.
Fulfillment by Merchant (FBM)
This refers to the seller handling storage, packing, and shipping themselves, not using a marketplace’s fulfillment program. In practice, this actually involves using a third-party logistics company.
Inventory Performance Index (IPI)
A score Amazon assigns sellers for how well they manage their inventory.
Multichannel Fulfillment (MCF)
Amazon FBA’s MCF program enables sellers to utilize the same logistics they use for Amazon fulfillment, to fulfill orders from multiple channels.
Third-Party Logistics (3PL)
A company that is neither the seller nor the marketplace that handles order storage and fulfillment.
Walmart Fulfillment Services (WFS)
Walmart’s product storage, package, and shipping program.
You can now use Amazon MCF for Walmart
Walmart and eBay forbid fulfillment via Amazon logistics. So now Amazon FBA Multi-Channel Fulfillment provides an option to opt-out of Amazon logistics and use USPS or FedEx instead.
“So now Amazon provides the option for sellers who are doing FBA multichannel fulfillment to opt-out of using Amazon logistics. There’s a 5% surcharge for them to use USPS, FedEx, whoever they end up using instead of Amazon logistics, but it removes one of the blockers that historically has prevented sellers from leveraging FBA MCF for Walmart and these other marketplaces.” -Michael Goldmeier
Amazon MCF is making other improvements
MCF AfterShip info can now be sent to other channels like Wish and Etsy. On top of that, you now have the ability to ship in a non-Amazon branded box. This prevents the confusion where you get an Amazon-branded box when you didn’t order from Amazon.
“So a lot of these changes that Amazon rolled out really recently is enabling sellers to leverage the FBA network for their non-Amazon channels and remove that really difficult hurdle of going multichannel being the fulfillment piece.” -Michael Goldmeier
MCF volume counts toward IPI
Amazon does count MCF volume when calculating Inventory Performance Index (IPI). This seems to have started on June 1, 2021.
“There are several things that are factored into your Inventory Performance Index on Amazon. So we don’t know at this point, how much of an impact MCF is going to have. I think they started counting it in June and we’ve seen some accounts go up several points, several tens of points, 10, 20, 30 which still might not move the needle for you if you want to be at that 450 threshold.” -Liz Downing
Walmart Fulfillment Services is lagging behind
Despite having an incomparable brick-and-mortar infrastructure, Walmart is still lagging behind Amazon on developing its fulfillment services.
“FBA has been around for a lot longer than WFS has. So there’s been some challenges I think that sellers have experienced getting inventory there, how to allocate inventory at WFS versus call it seller fulfilled or merchant fulfilled the non-WFS inventory, keeping track of it.” -Michael Goldmeier
But WFS is improving
WFS seems to be moving toward its own MCF. Some Walmart sellers have been contacted by Walmart to gauge their interest in a Walmart MCF program. And WFS doesn’t appear to comingle inventory whereas FBA comingling inventory can create headaches for sellers.
“You can look at what Amazon has done really well so far. And if this MCF is a really established, successful strategy it makes sense that Walmart WFS would have second-mover advantage. They could say, great, let’s use our infrastructure. Let’s learn from first-mover’s mistakes and take advantage of this demand for multi-channel within our network.”-Michael Goldmeier
The purpose of IPI is to keep inventory moving
Amazon rolled out the IPI program to incentivize sellers to keep inventory moving and not use their warehouses as long-term storage facilities.
“Don’t send in 10,000 Easter cookie cutters for Q4 for them to just sit on Amazon’s shelves. We’ve got a finite amount of space, and that’s why we’ve rolled out the Inventory Performance Index because we want items to move off of our shelves.” – Liz Downing
Prepare for a long holiday season
Michael’s prediction is that consumers will stick with ecommerce for their holiday shopping, but they’ve also learned that fulfillment can take longer than it did pre-pandemic, so he thinks we’ll see the 2021 holiday shopping season reach right into October.
“I think with what we and the consumers have learned from the past 12 months from last holiday season, we’re probably going to see that holidays’ spike, that Black Friday through the week before Christmas spike, just keep creeping up a little bit… So I think we’ll still see a really strong trend there and that holiday rush will start to creep into October more comfortably than it has before.” –Michael Goldmeier
It helps to have a backup
Because you can’t always predict how quickly Amazon is going to have your inventory available for FBA many sellers set up a non-FBA backup.
“What a lot of people that we work with do is they’ll have a non-FBA option for Amazon and they’ll have FBA will really prefer that if it can be fulfilled by FBA, especially for an order on Amazon, let them handle it.“ -Michael Goldmeier