You’re an Amazon FBA seller, navigating the bustling landscape of e-commerce with precision and foresight. Your business has flourished thanks to meticulous pricing strategies and fulfillment through Amazon’s FBA services. Yet, another shadow looms on the horizon—the announcement of further cost increases across FBA services, including inbound placement fees, on top of fee increases from past quarters.
Like many sellers, you are grappling with uncertainty amidst slowing e-commerce growth and recent bankruptcies for many large Amazon sellers. How will these ongoing changes affect your hard-earned profit margins? Will your carefully crafted pricing strategies withstand the strain? One thing becomes clear: proactive measures with your supply chain strategy are imperative to weather any storm now and ones yet to come. The emergence of shared services networks like Standvast is a solution to mitigate the impact of Amazon’s policy changes. Standvast’s leaders originated FBA and have built a solution complementary to (and breaks your dependence on) Amazon while helping you grow your margins and business. Using technologies like our auto-replenishment and our multi-node fulfillment network, we help you defend against storage cost increases, regionalization of the Amazon network, middle-mile price increases, changes to FBA pricing, and various penalties by creating a solution that can continuously adapt to further position you ahead of competitors in this dynamic Amazon and multi-channel e-commerce landscape.
As we delve into the intricacies of navigating FBA rate increases, consider the depth of expertise guiding our approach. Standvast, born from leadership roles instrumental in developing Amazon Prime and the FBA fulfillment ecosystem, brings knowledge and experience. This background isn’t just a testament to our capability; it’s the foundation upon which we built our shared services strategies to complement FBA and, more importantly, break your dependence on FBA and Amazon to double your organization’s value.
Understanding the Recent FBA Rate Increase
Once again, the Amazon FBA landscape has shifted, and like past announcements, they went into effect with little warning and a month to respond. The impact is still actively shaping the playing field for sellers. Standvast’s clients who followed our network guidance and used our technology could respond in days and, in fact, should be able to lower their total costs while increasing sales on Amazon and other channels. For others who are not employing a Standvast-like solution, this restructuring of the FBA fee system will require significant changes, impacting everything from storage costs to middle mile costs, and FBA fees. And to be clear, there are more coming.
Until recently, most FBA sellers never had to worry much about multinode networks, but all that changed as Amazon charges now to move inventory closer to demand. This change, however, represents zero cost increase or operational burden for FBA sellers already using a multinode network built to complement Amazon.
How the Standvast Network Offers Relief for FBA Sellers
For FBA sellers, multi-node networks closer to the end consumer and central Amazon sort centers have traditionally been a backburner concern. In the past, most tried to keep the logistics relatively straightforward and focused on the old-school reduction of inbound costs. If your business was based in New Jersey, shipping products to a nearby Amazon FC in Pennsylvania was the norm. From there, Amazon’s infrastructure would distribute the inventory nationwide without denting the seller’s bottom line. This arrangement that allowed sellers to slash inbound costs and put the costs on Amazon would not last. With that in mind, it was always best for brands and retailers to optimize their shipping strategies based on the total landed costs and create flexibility as inevitable changes occur. While there may have been value in capitalizing on proximity to ports while entrusting Amazon’s FBA system to handle distribution logistics independently, this was suboptimal in many ways, including being fully reliant on Amazon.
Amazon has revised its policies, introducing charges for inventory movement — a logical move that aligns with the e-commerce giant’s operational framework and inherent end-to-end supply chain optimization. The onus now falls on sellers to foot the bill for transporting inventory and managing the deployment of goods to FCs. This new landscape demands a proactive approach, with sellers now tasked to decipher demand patterns and strategically dispatch inventory to meet market needs and optimize the total landed costs.
For FBA sellers and aggregators already leveraging the Standvast solution, the recent policy shift, like others in the past, represents a win rather than a burden. They’ve experienced limited (if any) disruption because their inventory was already placed in the right places to optimize the middle mile for Amazon replenishment and the last mile for all of the other sales channels. Being in the right place at the right time may seem like luck, but it’s the Standvast strategy. Standvast was built on this principle so our sellers can circumvent the financial strain and operational complexities associated with Amazon’s revised policies, enhancing a competitive edge.
Navigating the Impact of Storage Cost Increases for FBA
For those who have forgotten, Quarter 4 of 2022 witnessed a significant announcement from Amazon: a 10% cost surge within their already brimming FCs. This adjustment hit hardest for sellers who had already dispatched more inventory than necessary (more than two weeks on hand at Amazon), amplifying their expenses at the most margin-sensitive time. Excessive inventory equated to excessive costs, leaving many scrambling to recalibrate their storage, margin, and pricing strategies.
However, sellers leveraging the Standvast auto-replenishment technology were cushioned against the brunt of these cost escalations. By adeptly synchronizing inventory levels with demand, these sellers maintained leaner stockpiles at Amazon. The unique Standvast technology-driven auto-replenishment is optimized for total handling costs, changing delivery cycle times, and consolidation potential for middle-mile cost savings. While the cost increases impacted our sellers, it was far less than most, providing a supply chain and cost advantage once again.
In the face of Amazon’s pricing adjustments—commonplace occurrences impacting FBA sellers—Standvast customers remained steadfast, shielded from supply chain cost hikes and operational complexities. This resilience stems from Standvast’s inherent synergy with Amazon and FBA, purposefully designed to complement the platform but with the ability to allow clients to optimize across the Amazon and multi-channel landscape. This allows the best of both worlds by leveraging Amazon for the sales value it creates and breaking the dependency on Amazon by creating a supply chain solution that optimizes for you, not Amazon shareholders. With this proactive foresight, Standvast consistently anticipates and adapts, positioning its customers several strides ahead in the ever-evolving e-commerce arena.
Ryan Mathews, Sales Director at Stanvast and industry veteran from organizations such as Stord and UPS, cites that being near Amazon FBA cross-dock sites and using auto-replenishment technology, ensures your product is in stock to avoid ‘low stock’ fees, maximizes sales opportunities, and yet avoids overstock so that you are not paying for premium Amazon storage. “Standvast enables FBA sellers to lower costs, achieve better lead times, improve overall stock levels, and end hours crunching spreadsheets to plan FBA replenishment.”
Standvast Fulfillment’s Expertise
At Standvast Fulfillment, we understand the challenges that Amazon FBA sellers face in the wake of impending rate increases. That’s why we offer a unique value proposition centered on composable fulfillment solutions and unparalleled expertise in navigating changes within the FBA ecosystem.
Customized Fulfillment Plan: We specialize in tailoring composable fulfillment strategies to your requirements. Whether you’re managing excess inventory, optimizing pricing strategies, hoping to grow your business across other channels, or seeking to optimize inventory management, Standvast can design a solution that fits like a glove. Leveraging cutting-edge technology and advanced data analytics with our shared service fulfillment network, we optimize every aspect of the end-to-end supply chain process to maximize efficiency and minimize costs.
Take Action with a Trusted Partner: Ready to take proactive steps to safeguard your profits and help your business grow? It’s time to partner with Standvast Fulfillment. Contact us today to schedule your free consultation and discover how our tailored solutions can help you thrive in adversity. Don’t wait until it’s too late. Let Standvast be your trusted guide in navigating the challenges of the e-commerce landscape.
