This episode dissects Amazon's evolving FBA strategy, particularly its push away from traditional FBA due to COVID-19, supply chain disruptions, and rising labor costs. It offers e-commerce operators critical insights into navigating new inventory limits, evaluating Seller Fulfilled Prime (SFP), and developing robust fallback strategies to maintain business continuity amidst these changes.
Key takeaways
Amazon is actively pushing sellers away from traditional FBA through stricter inventory and restock limits due to increased logistical costs and disruptions.
Sellers should proactively explore and implement fallback fulfillment strategies like Seller Fulfilled Prime (SFP) or merchant-fulfilled models to reduce reliance on FBA.
Prepare for potential challenges and increased complexities when managing your own warehousing and fulfillment operations as an alternative to FBA.
Understand that rising labor costs and supply chain issues are key drivers behind Amazon's policy changes, impacting FBA's viability and cost-effectiveness for sellers.
Mike and Dave talk about why Amazon is pushing sellers away from FBA, how they are dealing with storage limits, and what fallback strategies you can use. "Amazon is not a retail company, it's a logistics company that does retail." Interesting adage. But is it still true today? In this episode, Dave and I will try to dissect Amazon's mindset—whether over the next several months, they will try to get more sellers to send more of their inventory into FBA, or push them towards Seller Fulfilled Prime (SFP) or merchant-fulfilled models. In particular, we'll go over key factors that might be affecting Amazon's recent moves, including COVID, supply chain disruptions, and rising labor costs. We'll also look into Amazon's recently-updated inventory and restock limitations, how it shakes things up for third party sellers, and what strategies we are putting in place to stay ahead of the curve. Finally, we'll talk about our general fallback options in case FBA does cease (whether partially or entirely) to make sense for ecommerce sellers. If you're looking for some insights as to what's been going on with FBA and how you can plan your business around that, definitely give this one a listen. Timestamps: Is FBA dying? – 4:24 How rising wages could affect Amazon's mindset on FBA – 12:10 Dealing with Amazon's new inventory and restock limits – 14:25 The pains of managing your own warehouse – 23:57 <span st
What does this episode say about amazon & marketplaces?
Amazon is actively pushing sellers away from traditional FBA through stricter inventory and restock limits due to increased logistical costs and disruptions.
What does this episode say about supply chain & operations?
Sellers should proactively explore and implement fallback fulfillment strategies like Seller Fulfilled Prime (SFP) or merchant-fulfilled models to reduce reliance on FBA.
What does this episode say about amazon & marketplaces?
Prepare for potential challenges and increased complexities when managing your own warehousing and fulfillment operations as an alternative to FBA.
What does this episode say about amazon & marketplaces?
Understand that rising labor costs and supply chain issues are key drivers behind Amazon's policy changes, impacting FBA's viability and cost-effectiveness for sellers.
