Amazon is well-known for its advancements in cloud technology, original content, AI and machine learning, but the e-commerce giant also has the edge on rapid fulfillment.
With its Multi-Channel Fulfillment (MCF) program, third-party sellers who sell more than half of their products on Amazon can take advantage of its vast shipping network to fulfill orders placed on other marketplaces such as Walmart, eBay, Jet, and their own e-commerce sites.
Amazon recently announced several important changes to MCF, which went into effect on August 30 of this year: MCF shipping prices dropped, and sellers also saw a significant decline in Expedited and Priority shipping costs, which were lowered by as much as 15% to 32%. Amazon also made it easier to calculate fees for items by consolidating the Order Handling, Pick & Pack, and Weight Handling into a single per-unit fee, and now offers discounts for multi-unit orders.
While these may not seem like earth-shattering changes, they represent another statement of intent by Amazon in the logistics space. Because MCF places all inventory from each seller in Amazon’s warehouses, the data provided through the program gives Amazon insight into competing marketplaces and e-commerce operations. With details such as the most popular products across channels and the most popular channels by order volume, Amazon will further solidify its lead among online marketplaces and in the e-commerce industry as a whole.
Additionally, because Amazon will package all orders with its own branded packaging, they will receive brand recognition for products that are ordered through a retailer’s website or another online marketplace.
These changes have implications for Amazon, but they also have important ramifications for retailers and third-party sellers. By using the updated Multi-Channel Fulfillment service, retailers and sellers benefit from reduced fulfillment costs, and they also benefit from Amazon’s fast delivery, brand equity and scalability. Therefore, sellers can simplify their business operations by only using one logistics service.
Because we see that marketplaces are becoming the fastest growing channel in the e-commerce space, many retailers and sellers that have multiple e-commerce channels will see Amazon’s service as a logical next step.