Direct shipping, unlike drop shipping, bypasses standard distribution channels. In essence, the product owner or company sends the products directly to the consumer without any wholesaler or retailer having to deliver the goods.
This service can be a boon for consumers as they are potentially able to receive an unlimited number of freebies right to their doorstep, giving them the chance to try a range of new products that they may never have encountered without this service.
But how does direct shipping help sellers?
In this guide, we explore everything you need to know about Amazon Direct Shipping, including how it works, why your business should consider applying this practice, and common Amazon sales pitches to avoid. Read on.
Amazon Shipping 101
Amazon has more than 1.5 million active sellers around the world and over 100 million consumers worldwide.1 With its wide reach, sellers have the right to be vigilant about how shipping costs can eat into their bottom line.
These sellers would be dissatisfied with trusting to ship their own products overseas to US consumers – packages could take weeks to deliver and the delivery fee would be astronomical.
Sellers have a few options when it comes to shipping their products: 2
Fulfillment of Amazon Merchant-Fulfilled Orders Amazon Direct Shipping
Understanding the fulfillment of Amazon
Around the world, Amazon boasts more than 150 million square feet of storage space. Independent sellers who sign up for Amazon’s Fulfillment By Amazon (FBA) service will have access to these shelves in addition to Amazon’s customer service, returns, and automatic Prime eligibility.
Salespeople who use FBA can behave like a large company without having to assume the cost responsibility of a large company. As an entrepreneur writes: 3
There are a number of different ways to leverage the FBA model, but the most popular way is private labeling. The idea is to establish a brand or label, apply it to your product and sell it on Amazon … If you take the time to find a popular product category, do competition analysis, research product reviews and identify a product that you can improve or sell at a better price, you have found the sweet spot.
Important details about FBA
On the fence about Amazon FBA? Here are some statistics on what Amazon FBA is: 2
FBA Fees – You can estimate what your FBA fees will be through an Amazon Seller Central tool.4 The primary FBA fee covers the cost of storing your products in Amazon’s warehouse, picking, packing and shipping your orders plus delivery of customer service for products once they have been sold. In addition to this fee, there are: Monthly Inventory Storage Fees Long Term Storage Fees Removal of Order Fees Pickup Order Returns Processing Fees Unscheduled Service Fees How the FBA-Amazon Fulfillment Service Works can be boiled down to four important steps: 2 Send your inventory to Amazon where it will be available for sale packs and sends each Amazon order directly to the consumer Amazon collects payment from the customer and pays you the funds every two weeks Amazon customer service team (for which you pay) handles questions, returns and refunds Additional FBA resources – Additional resources, video tutorials and newsletters can be found for sellers in Amazon Seller Central.4.
The alternative to FBA is to choose grocery-fulfilled orders. It simply means that you store and ship your products yourself.
That is how it works:
Amazon charges shipping prices based on the product category The shipping service is selected by the customer, which is then passed on to the seller in the form of a shipping credit. It is the seller’s responsibility to handle packaging products, produce shipping labels and track shipments.
Depending on the size and scope of your business and what products you specialize in, the merchant that is met or the FBA model may better suit your business goals.
If you choose the FBA model, you will be able to cover the cost of the service with revenue to make it worth your whale.
What is Amazon Direct Shipping?
Amazon Direct Shipping exists because of FBA.
Do you remember the various fees associated with the FBA service? That long-term storage fee can be a real thorn in the side of independent sellers, especially when they have a product that is not selling well or fast enough.
If a company’s goods are stored in an Amazon warehouse for a certain period of time, the long-term storage fee will start. According to Amazon: 4
Inventory that has been in a fulfillment center for more than 365 days is charged a monthly fee for long-term storage in addition to the monthly fee for storage storage[…]Inventory that has been in a fulfillment center for more than 365 days will be charged a monthly long-term storage fee of $ 6.90 per. Cubic foot or $ 0.15 per. Unity, whichever is greater.
These monthly plus long-term storage fees add up quickly, which means sellers will clean up their inventory ASAP before hitting this critical point.
With the help of Amazon Direct Shipping, sellers can get this unsold, increasingly expensive to store stock from the warehouse and into the hands of customers who have signed up to receive freebies with direct shipping.
How does Amazon Direct Shipping work?
Although the Amazon brand is not involved in direct shipping, Amazon stores are. Freebies are shipped directly from Amazon’s fulfillment centers to consumers who have signed up for direct shipping.
You might be wondering why the fulfillment centers are participating? Because sellers have already paid for FBA services, Amazon is still responsible for shipping their stored products. To fulfill direct shipping requests, the seller just needs to notify Amazon of free orders and where to ship them.
Sellers will typically try to hold up as long as possible before emptying their stock if they see an increase in sales, eliminating the need to ship out free items.
How do consumers sign up for direct shipping?
So who receives this extra inventory? Knowledgeable shoppers know who has done their due diligence and researched which vendors offer direct shipping.
Because Amazon Direct Shipping is not actually affiliated with Amazon, consumers can not just hop into their Prime account and fill out a form.
To find out which vendors offer freebies, they should research the following online sources: 5
Facebook Groups – Searching for “direct ship” groups on Facebook offers plenty of options. Some popular / researched sites include: KC’s Direct Ship Freebies and MORE (17.2K members, must request to participate) Direct Ship / Unicorn Gifts / Surprise Freebies (26.6K members, must request to participate) Direct Ship, Freebies and Fun ( 13.4K members, must request to join) Freebie Websites – Simply Gooogling “how to get free stuff online” will pull up more spam than anything else. Some legitimate freebie sites that shoppers can check for direct shipping offers include: The Internet Steals and Trades Consumer Queen Gimme Freebies Upfreebie Reddit – Some shoppers are brave enough to go down the Reddit rabbithole when searching for freebies. A popular sub-Reddit for Direct Ship groups are r / freebies that have over 778K members.
Once a consumer has found what they believe is a legitimate website, he fills out a Direct Ship form asking for name, address, email and phone number.
Why should companies use Amazon Direct Shipping?
If a company chooses to use the Fulfillment by Amazon service, they should consider whether they will also use Amazon Direct Shipping.
When making a business decision, a salesperson wants to understand what the consumer experience is like.
If the experience of Amazon Direct Shipping is overwhelmingly positive for those who receive free merchandise, chances are it can increase sales from customer to customer and also help a small business build a new audience.
Benefits of Amazon Direct Shipping to consumers include: 5
Two words: free products All unwanted freebies that the consumer receives can be restored or donated Consumers get to try products and brands they may have never heard of before this
The biggest advantage for sellers who use Amazon Direct Ship is that they are able to get in touch with a number of consumers who may have never discovered their product in any other way. The hope is that they would receive a freebie they loved, so log on to Amazon and buy more items from this brand.
As exciting as Amazon Direct Shipping is for customers, there are some disadvantages to consider:
A free item can not always lead to a purchase – The downside of Amazon Direct Shipping is that all of these external sources that promote sellers offering freebies are not guaranteed to have the seller’s or consumer’s interests in mind. Reputation Risk – The likelihood of a scam occurring between all the legitimate online offers is high and your business will not want to be associated with any negative press involving such a horrible activity.
If you choose to use Amazon Direct Shipping instead of paying a long-term FBA fee, you will be on top of the above sites, making sure that your company name is not associated with illegal activity or negative words-about – mund.
Master Amazon Direct Shipping, Advertising and more with Marketing-Ideas Marketing
It is not easy to stand out on Amazon as an independent seller. The competition is fierce (hey, Jeff Bezos-produced goods and services), and sellers need to stay constantly on guard to keep up with Amazon’s ever-changing algorithms.
If you are new to the Amazon marketplace or want to improve your status within the system, it may be in your best interest to hire a professional Amazon marketing management team to streamline your e-commerce offerings.
Marketing-Ideas Marketing possesses a basic understanding of how Amazon works and can help you expand your brand by reaching new customers and creating loyal fans, all while getting more for your money.6
The PDM team can help your business better understand the pros and cons of Amazon services like Amazon Moments or familiarize you with what Prime Wardrobe is to help you make the best decisions for your business.
MarketPlace Pulse. Number of sellers on Amazon Marketplace. https://www.marketplacepulse.com/amazon/number-of-sellers Amazon. The beginner’s guide for sale on Amazon. https://sell.amazon.com/beginners-guide.html Entrepreneur. Guide to starting an ‘Amazon fulfillment’ business. https://www.entrepreneur.com/article/282277 Amazon. Selling Central. https://sellercentral.amazon.com/gp/help/external/help-page.html?itemID=201074400&ref_=sdus_soa_bg_xscus_201074400&initialSessionID=apay%3D145-2248296-6342933&ld=NSGoogle Thrift Amazon Direct Ship Ultimate Guide. https://thriftyintrovert.com/amazon-direct-ship-freebies/ Marketing-Ideas Marketing. Amazon Marketing Services. https://Marketing-ideas.org/services/amazon-marketing/