Amazon Fulfilment: Why eCommerce Brands Are Switching to Dedicated 3PL Services

Amazon set the benchmark for the speed and efficiency people demand from eCommerce fulfilment today. 

This is largely driven by fulfilment by Amazon (FBA), first introduced in 2006, which rewrote the rules surrounding fulfilment and delivery times. Receiving an order within a day or two became the norm rather than the exception.

However, Amazon is very much its own beast. As a marketplace that attracts millions of sellers and billions of buyers, it’s tough (if not impossible) to grow brands solely through the platform. 

Businesses globally are also finding that Amazon’s one-size-fits-all approach to fulfilment is no longer as cheap and efficient as it once was. Fees are high and unpredictable, and stock is challenging to control. 

Luckily, there are alternatives, such as third-party logistics (3PL), which can support brands both inside and outside of the Amazon ecosystem. 

This is vital for building businesses that truly resonate with and retain customers for the long term – fundamental to building a brand with positive growth prospects. 

This article will explore fulfilment options and strategies for Amazon store owners, including the strengths and limitations of FBA, the benefits of 3PL partnerships, and how thinking outside of the box regarding fulfilment can drive your business forward. 

How FBA Changed Fulfilment

Amazon FBA enabled sellers of every shape and size to tap into Amazon’s vast logistics network, offering enterprise-level shipping without infrastructure investment and staffing.  

Today, next-day delivery has become the norm for Prime members, and millions of products are available for same-day delivery. 

Here’s a short recap of how FBA reshaped eCommerce fulfilment:

1. Rapid Deliveries Become the Norm: The vast majority of buyers now expect next-day delivery, often without extra costs. Amazon is one of the main driving forces behind this, with its extensive network of fulfilment centres making rapid deliveries possible on a massive scale – and often without extra cost for the buyer. 
2. Simplified Operations: FBA takes care of storage, picking, packing, and shipping. For many sellers, this meant less time worrying about logistics and more time focusing on product development and marketing. This changed the very nature of brand building, making Amazon more about finding effective products and less about building brands. 
3. Prime Eligibility: FBA products became eligible for Amazon Prime, exposing sellers to Amazon’s most loyal customer base. There are 200 million Prime members worldwide.
4. Customer Service Handling: Amazon also handles customer service for FBA orders, including return processing, which shrinks the time sellers need to spend on customer service. 

Despite FBA’s evident benefits, it comes with its own set of strict rules. Of course, Amazon remains a vital sales channel, but as businesses scale, they often encounter obstacles that can slow their growth and curb their ability to establish a strong, enduring brand identity. 

The Hidden Costs of Amazon Fulfilment

While Amazon fulfilment offers speed and convenience, hidden costs can make it tough to optimise sales processes and deliver excellent customer experiences. 

This hasn’t gone unnoticed by eCommerce leaders. One European survey conducted by Censuswide showed that over half (51%) of eCommerce decision-makers find Amazon “hard to navigate”, while more than two in five struggle to gain control of their brand on the platform. 

While brands can reach millions of potential buyers, Amazon considers these shoppers “their” customers. It’s in Amazon’s best interests to create barriers between brands and consumers.

For example, as per an article published in Forbes, Amazon has recently removed customer details from order reports, restricted brands’ ability to respond to product reviews, and narrowed the acceptable use cases for buyer-seller messaging. 

As a result, it’s now tougher than ever for brands to create meaningful connections with their customers.

Even Amazon’s new “Manage Your Customer Engagement” tool, which allows brands to initiate email campaigns, comes with caveats. 

Customers must actively “follow” a brand to receive communications, and the user interface rarely drives shoppers to brand stores unless paid advertising is involved.

Here are some additional challenges brands commonly describe when relying solely on Amazon:

Challenge of Amazon Fulfilment	Description
Inventory Management Constraints	Stock limits during peak seasons, long-term storage fees for slow-moving products, and difficulties adjusting stock during demand spikes (especially Q4) can lead to lost sales.
Data and Customer Relationship Limitations	Amazon guards valuable customer data, limiting sellers’ access to insights and preventing targeted marketing campaigns or strong customer relationship building.
Complex and Changing Fee Structure	Hidden costs like long-term storage fees, disposal charges for unsold inventory, and other expenses can erode profit margins with little room for negotiation.
Brand Identity Challenges	The standardised Amazon unboxing experience and the risk of commoditisation can dilute brand differentiation.
Platform Dependence Risks	Exclusive reliance on Amazon makes businesses vulnerable to policy changes and account suspensions, which can disrupt operations unexpectedly.
Intense Competition	Standing out requires significant investments in advertising and optimisation, with the risk of competing directly with Amazon’s private-label products.
Atypical Sales Strategies	Selling on Amazon requires a unique strategy and specific skills, which can create competing priorities for brands looking to build long-term success.
Difficulties Building Customer Loyalty	Building lasting relationships and loyalty on Amazon is challenging, as many customers are more loyal to Amazon than to the individual brands.

This isn’t all to say Amazon doesn’t belong in a brand’s sales channel mix. But, it’s no panacea for growth and longevity, and many successful brands raise their sites and explore other avenues. 

The 3PL Alternative: Custom, Flexible Solutions for Growing Brands

As eCommerce brands grapple with Amazon’s benefits and limitations, many are turning to third-party logistics (3PL) providers as a more flexible and brand-friendly alternative. 

In a nutshell, 3PL means outsourcing eCommerce logistics and fulfilment processes to a specialised company. 

By partnering with a 3PL provider, eCommerce businesses can focus on their core brand while leaving the logistics operations to experts. It offers far greater flexibility and customisation than dealing with a huge company like Amazon.

How Does 3PL Work?

So, how does 3PL actually work? When you partner with a 3PL provider like J&J Global Fulfilment, the process typically unfolds as follows:

1. Inventory Storage: You send your products to the 3PL’s warehouse facilities.
2. Integration: Your eCommerce platform is integrated with the 3PL’s system for seamless order processing.
3. Order Receipt: When a customer places an order, it’s automatically sent to the 3PL.
4. Pick and Pack: The 3PL staff selects and packages the ordered items for shipment.
5. Shipping: The package is sent to the customer using the most efficient shipping method.
6. Tracking and Support: The 3PL provides tracking information and handles shipping-related customer queries.
7. Data Analytics: If you partner with us at J&J, you’ll also gain access to a management platform called ControlPort™ at J&J, which provides powerful insights into your fulfilment processes. 

When properly implemented, partnering with a 3PL provides a seamless, transparent, and fully integrated fulfilment process that scales and adapts alongside your business.

Why Brands Are Switching To 3PL

A 3PL provides a robust alternative to managing fulfilment in-house or relying on platform-specific services like Amazon FBA. Here’s why many are making the switch:

Brand Control and Customization

With 3PLs, brands keep their identity front and centre.

You can design your own packaging, add personal touches like thank-you notes, and manage your inventory more freely. It’s about creating an experience that feels like your brand, not just another package.

Data That Actually Helps

3PLs offer more detailed, granular data than Amazon. And importantly, nothing is ‘off limits’ or restricted from you. 

You can track inventory across locations, see what’s selling and why, and measure your overall fulfilment performance. 

Room to Grow

As your business expands, your 3PL can scale with you. Need more storage? No problem. 

Want to sell in new markets? Global warehouses and expertise simplify the process. Dealing with holiday rushes? They can handle it without hidden costs.

Costs That Make Sense

3PL services can offer better value than in-house fulfilment from Amazon or other eCommerce platforms like Shopify. 

The pricing is clear and predictable, so you know what you’re paying for. As you sell more, you might pay less per order. And unlike dealing with Amazon, you can actually negotiate to get a deal that fits your business.

The Benefits of 3PL in Action: Nutravita Case Study

Nutravita is a health supplement brand that started as a bedroom-based business relying solely on Amazon as its shopfront. 

By partnering with J&J Global Fulfilment, they were able to scale their business far beyond the Amazon ecosystem, building a lasting brand in the process.

“By partnering with James and James, we’re able to spend less time packing and shipping orders, and have more time to focus on plans to grow our company,” says Arash Peyami, CEO and Founder of Nutravita.

“Our D2C business is now our focal point, and that’s why James and James is so important. We’re able to deliver a great customer experience and have full visibility of our order fulfilment.”

This is a key point. 3PL offers more control over everything from costs to the customer experience, supporting the journey of building a lasting brand that mixes DTC with other sales strategies. 

Benefiting from Modern 3PL Technology

As we’ve discussed, Amazon limits access to certain data and technology, making it difficult to fully track your customers. 

This is by design – Amazon keeps valuable insights that could empower businesses to succeed on other platforms or establish a thriving DTC brand. 

In contrast, 3PL providers like J&J offer the advanced data and technology that put you in control, empowering growth across any sales channel. Here’s how it works:

Advanced Inventory Management

By partnering with J&J, you’ll gain access to our ControlPort™ software, which gives you total visibility and control with real-time supply chain data. 

With end-to-end stock tracking, you can monitor inventory levels across all our global fulfilment centres. AI-powered insights help you optimise stock levels, reduce storage costs, and avoid being caught off guard by sudden spikes in demand. 

Real-time Tracking and Reporting

ControlPort™ offers live order tracking, keeping customers informed from the moment they buy a product to when their package arrives.

It provides detailed analytics that helps you spot trends, identify bestsellers, and pinpoint areas for improvement. With 99.99% pick-and-pack accuracy and 98% of orders dispatched on the same day, you can reliably exceed customer expectations.

Seamless eCommerce Channel Integration

Your online store and fulfilment processes need to communicate reliably. 

ControlPort™ makes this happen. We’ve built integrations with all major e-commerce platforms, including Shopify, Amazon, eBay, TikTok and WooCommerce.

Orders flow automatically from your store to our warehouse, and inventory updates sync across all your sales channels in real time. 

Automated Order Processing

ControlPort™ works in tandem with our AI-powered warehouse management system, ensuring that every order is picked, packed, and shipped with lightning speed and pinpoint accuracy.

This automation extends to returns processing, too. We can quickly assess returned items, update inventory, and process refunds while keeping you and your customers informed at each stage of the returns process.

In the end, the right 3PL technology doesn’t just streamline your operations – it acts as a powerful tool for growth. 

Whether you’re shipping 1,000 or 100,000 orders per month, the right 3PL partner will ensure you’re always ready for the next level. 

3PL Offers Global Reach to Expand Your Brand Internationally

Global expansion is no longer reserved for major eCommerce businesses. These days, even small brands are shipping worldwide. 

Amazon doesn’t make international selling easy. It has different policies, terms, and fees for different geographical areas, making selling outside of one region challenging. 

Moreover, FBA inventory is country-specific. You can’t simply move stock between different Amazon marketplaces, leading to potential oversupply in some regions and stockouts in others.

3PL companies like J&J don’t impose these limitations, making global cheaper and more practical.

Strategic Fulfilment Center Locations

Part of the puzzle of selling abroad is positioning stock in the right locations so it can reach buyers in reasonable timeframes. Reputable 3PLs offer a network of fulfilment centres in key markets around the world:

• Reduced Shipping Times: Storing inventory closer to your customers for faster delivery.
• Lower Shipping Costs: Taking advantage of local shipping rates in different countries.
• Easier Market Entry: Testing new markets without significant upfront investment.

J&J operates fulfilment centres in the UK, EU, US, and Australia, allowing brands to reach customers worldwide efficiently. Don’t just take our word for it – let’s look at a real-world example from our Case Studies.

Cosmetics and beauty brand Dr. Squatch was looking to expand globally, but they were facing challenges with long shipping times and high costs. 

After partnering with J&J, they’re now fully operational in three of our sites: Northampton, UK; Venlo, Netherlands; and Brisbane, Australia.

“J&J’s regional expertise has helped us improve service and reduce shipping costs exponentially to areas in which we were struggling,” explained Jason Welsh, Senior Fulfilment Manager at Dr. Squatch.

The results? Dr. Squatch can now deliver to customers in the UK, Europe, and Australia in 1-5 days using their preferred economy services. Previously, shipping from the USA would take anywhere from 7 to 28 days. 

Cost Comparison: 3PL vs. FBA

Many sellers are understandably concerned about the cost of 3PL, especially when comparing it to the familiar fees of FBA. However, on balance, partnering with a 3PL provider tends to be an economically savvy choice. 

Let’s examine the key cost considerations and compare 3PLs like J&J Global Fulfilment to Amazon’s FBA service.

Feature	J&J Global Fulfilment	FBA
Transparent Pricing	Customisable pricing based on business needs	Complex fee structure with upcoming increases (e.g., fulfilment, storage, returns processing)
Storage Fees	Flexible storage options to accommodate inventory needs	Average storage fees increasing by ~10% during peak and off-peak periods in 2024; new tiers for storage utilisation surcharge came in June 1st, 2024
Long-term Storage Fees	Predictable storage fees tailored to what you use only; flexible storage options	Aged inventory surcharge increasing significantly across most tiers in 2024
Customisable Services	Bespoke service plans to fit specific requirements	Standardised services with limited flexibility
Potential for Discounts	Volume discounts available as the business scales	No volume discounts in the upcoming fee changes
Value-Added Services	Included (e.g., custom packaging, kitting)	Only basic gift wrapping and notes
Fulfilment Fees	Tailored to business needs and are more predictable	Fixed and no room for negotiation
Return Fees	Predictable, transparent fully managed returns	Additional fees apply (e.g., new returns processing fees for high return rate products starting 2024)

Making the Transition From FBA to 3PL

While the shift from Amazon’s FBA to a 3PL provider may seem challenging, with the right planning, it can be a smooth and efficient process. 

If you’re considering the switch, here are some key steps to ensure a swift, frictionless transition:

1. Assess Your Needs: Evaluate your current fulfilment requirements and future growth plans. Consider factors like order volume, product types, and target markets.
2. Choose the Right Partner: Research potential 3PL providers, considering factors like technology, locations, and industry expertise. Look for a partner that aligns with your business goals and values.
3. Plan the Integration: Work with your chosen 3PL to map out the integration process, including any necessary software connections. This might involve connecting your eCommerce platform to the 3PL’s management system.
4. Manage Inventory Transfer: Coordinate the transfer of your inventory from Amazon’s warehouses to your new 3PL partner. This process should be carefully planned to minimise disruption to your sales.
5. Test and Optimise: Start with a small portion of your orders to test the new system, then scale up as you optimise the process. Use this phase to identify and address any issues before fully committing to the new system.

J&J Global Fulfilment has refined these processes to make your transition swift and straightforward. 

Our experienced team will support you through the setup and integration process, from assessing your needs to connecting and testing sales channels.

Charting Your Fulfilment Future With J&J

If you’re feeling limited by Amazon and want to build an enduring brand that thrives outside of the platform, it might be time to explore your options. 

At J&J Global Fulfilment, we’re passionate about helping brands like yours unlock their full potential. 

We combine cutting-edge technology, a worldwide fulfilment network, and exceptional customer service to build strategies that scale with your ambitions.

We keep things transparent and won’t withhold valuable data. We want to help you grow and thrive, no matter where your customers are or what sales channels they use. Ready to take your brand to the next level? Let’s talk. Our team is standing by to answer your questions and explore how we can help you achieve your goals.

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