What is Amazon’s Multi-Channel Fulfillment? You’re probably familiar with Amazon FBA (Fulfilled by Amazon,) but what is this multi channel Fulfillment program, or MCF as it’s called? In this post we’re going to take a deep dive into the Amazon MCF. We’ll discuss what exactly it is, and we’ll cover how to know when it may be right for your brand to use.
What Is Amazon Multi-Channel Fulfillment?
The easiest way to think of Amazon MCF is as an extension of their FBA program. It allows you to use the shipping services provided under FBA for sales that take place outside of Amazon in places like your personal website, or you can even use it in conjunction with brick and mortar stores.
Let’s say you’re a growing brand. You have a single person, or maybe a small team that handles all of your direct to consumer orders. What happens if that person calls in sick, or becomes incapacitated, or you come in after a long weekend and your usual volume of 30 orders has ballooned to 150 or 200? You may have to take on the task of fulfilling these orders yourself, or pull other members of your team in to help. It’s exciting the first time or two, but pretty soon you’re going to realize that this is not sustainable.
Likewise, say you have a big bulky item that you need to ship from the East coast to the West coast. When you make that shipment you’re going to have to deal with zone-based shipping and you may even be losing money when you make shipments.
Amazon has a solution for this. One of the most common phrases that I find myself saying to growing brands is that Amazon is just as much of a logistics company as they are an e-commerce company. With Amazon MCF you can actually lower your brand’s overall cost of shipping, but more importantly turn it into something that you don’t have to worry about.
How Do You Use Multi-Channel Fulfillment?
Using the Amazon MCF may seem very overwhelming, but it’s actually not. Obviously, the first step is you’ll have to be using the Fulfillment by Amazon program. You have to have your inventory stored in their fulfillment centers.
I always advise brands to place a test order manually so you can see the process of how you input the order. You can even have it shipped directly to yourself to get an idea of how the product arrives, how it is displayed in Seller Central and how the order is tracked.
From there you need to make a decision whether you want to try this for some orders or all orders. That’s going to dictate the next step you take because you’re then going to have to begin setting up your process. You may decide it’s best to do it manually in Seller Central and assign it to a member of your team. Alternatively, there are a number of different software providers out there that take the orders that you get from your Shopify site, or other channels, and automatically funnel them into Amazon’s network. Amazon will see that as a Multi-Channel Fulfillment order and fulfill it.
There are even more sophisticated softwares that offer solutions based on rules you input. For example, let’s circle back to our East and West coast example from earlier. If you are on the East coast, you can set rules that cause orders placed by anyone in the Rocky Mountains or the states to the West to go automatically to Amazon MCF. The advantage of Amazon MCF is that it is all flat-fee based. They’re not zone-based like a traditional UPS or FedEx shipping account is.
The most important thing to understand is there’s no “one size fits all” approach. It’s going to be different for every brand based on their needs and what they’re looking for. And, like anything with Amazon, things are always changing and evolving, so making sure to stay current with the changes is key.
What’s Changed Recently with Multi-Channel Fulfillment?
As we covered in the last section, Amazon’s fees for MCF orders are all flat rate as opposed to zone-based. Amazon recently announced that in May of 2022 they will be implementing a slight rate increase the same way other services such as UPS or FedEx increase theirs every year.
Beyond that, there are three major changes that are currently in the works. These programs have not launched yet, but we fully expect beta launches for 2, if not all 3 of them, by the end of 2022:
- On-Brand Packaging: Maybe you don’t want your brand’s products being shipped to consumers in one of the standard bubble Amazon mailers, or Prime-branded boxes. For an extra fee, your product can be shipped out in plain packaging with no indication that it is coming from Amazon. This is a great service to avoid customers wondering why their product came in Amazon packaging if it is an order that was placed directly on your website and fulfilled with Amazon’s MCF.
- Block Amazon As A Carrier: One of the major things Amazon has implemented in recent years is their own delivery service, just like UPS or FedEx. Amazon has their own fleet of trucks and vans that rove around neighborhoods and deliver items. Similar to the beta mentioned above, if you don’t want your customer to know that their order was fulfilled by Amazon you can select an option to prevent Amazon from using their own fleet to deliver your packages. Packages are delivered by traditional carriers such as FedEx or UPS instead of the Amazon truck or van, so you can maintain brand loyalty.
- International Shipping: Amazon is hard at work on the logistics of international shipping. You may soon be able to use Amazon MCF to ship your products outside the United States.
Pro Tip: Walmart and Shopify both have been working to build off their own fulfillment capabilities. There’s a lot of competition in the order fulfillment space, and Amazon is aware of that. Amazon understands that if you already have your inventory stored through one of those services that it makes sense for you to send out orders from other channels from there. It’s always changing, in a year or two it could be entirely different, so make sure you’re always staying up-to-date with any changes while making sure to maximize taking advantage of the services available to your brand right now.
What Does Success Look Like With Multi-Channel Fulfillment?
To understand what success looks like when using Amazon MCF you have to understand what your average shipping rate for a sale is. You need to have a full understanding of the price you pay to ship. If you’re using an outside service such as a third-party logistics partner, be sure to add up all the costs such as pick and pack storage, and all the other associated costs, not just the cost of the shipping label.
Once you have that cost figured out, Amazon has a great table located in the Seller Central help section for MCF that tells you exactly what your cost would be to fulfill one or multiple items based on the size and weight of that item.
Once you understand your costs to ship yourself, through a third party, or through Amazon, you’ll want to analyze those results and make the best decision for your brand. You might decide that Amazon MCF isn’t right for you. Or that it’s only right for you in certain situations such as shipping in different zones. Another great use of the MCF service is for one-off shipping situations. If a customer contacts you and needs a replacement you’ll be able to utilize MCF to ship the order instead of tasking someone on your team with it.
Results are always going to be different for every brand. There’s no right or wrong way to use the Amazon MCF. The trick is finding the best way that you can take advantage of it as a tool for your own brand.
How A Customer Used Multi-Channel Fulfillment to Manage Inventory Levels
Before we wrap this article up, let’s take a look at how we were able to use Amazon MCF to benefit one of our customers.
One of the brands we work with ran into serious supply chain issues during the pandemic. They could not get the raw materials they needed to produce their product fast enough. Because of that, they had to make some difficult decisions about where to send finished inventory. They had two locations to ship their product to: Amazon warehouses, and a third-party logistics provider which supplied and shipped their orders from Shopify and other various channels.
We recommended they pause their third-party logistics service, and stop sending inventory to them, and instead use the Amazon MCF to fulfill all of their orders. The client had to set up their back-end software so that Shopify orders would automatically be sent from MCF.
As we mentioned earlier, Amazon is as much of a logistics company as they are an e-commerce company. They have employees on the job 24/7 sending items out. The turnaround time for Amazon to send products out to the end customer is the fastest in the industry. So, when the brand decided to utilize Amazon MCF exclusively they no longer had the headache of deciding where to send their inventory, or how to juggle the supply they had between two different logistics companies.
Amazon’s MCF is one of the most powerful and flexible tools that you can use for your brand. It can allow you to optimize the shipping process by handing it off to professionals trained to make the process a breeze.
Not sure if Amazon Multi Channel Fulfillment is right for your brand?
Book a call to discuss best practices with our strategists