As a multichannel merchant, you are probably looking for the best sales model that would keep you at the highest profit margin. Amazon Multi-Channel Fulfillment (MCF) is one of the programs offered by an eCommerce giant that allows sellers with a limited budget and inventory space to market their goods through different marketplaces without pain in the neck.
In this article, we will explain how it works and whether this fulfillment model will allow you to generate some decent revenue.
What is Amazon’s Multi-channel FBA?
In a nutshell, MCF is an Amazon seller management fulfillment model that supports multi-channel businesses of all sizes by providing them with the world’s largest fulfillment network. In other words, Amazon stores your goods at their warehouses and handles orders received outside of Amazon at a certain fee.
It works like this. For instance, you sell some goods through your brand’s website. Due to some circumstances, you can no longer handle all the orders that come your way or do not have enough space to keep your inventory.
That’s when the Amazon FBA inventory management model for multi-channel sellers comes in handy. Amazon’s staff will take care of all orders received through your website. At a certain fee, of course. They will store, pack, and deliver the item(s) to your customer, which enables you to avoid shipping and fulfillment issues.
IMPORTANT!
MCF doesn’t work for all platforms. It can be synced with eBay, Shopify, WooCommerce, and BigCommerce. You can also build your own integration to link your custom website. However, Walmart and Jet.com don’t allow Amazon to fulfill their orders due to Amazon-exclusive branding on shipping boxes.
How Multi-Channel Fulfillment (MCF) Works?
The key point of the MCF Amazon seller inventory management method is that the order will be handled by Amazon staff, wherever it is placed. You will also use the perks of Amazon inventory control for all the goods you would like to sell through MCF.
MCF looks pretty similar to the FBA system. You send the goods to Amazon warehouses according to some labeling and shipping rules (they are the same for FBA and MCF), pay fees for storage and order fulfillment, and control the inventory levels. You are responsible for keeping inventory at an optimal level to avoid running out of goods and promoting your brand, while Amazon is in charge of storing your items, packing orders, and sending them to the customers.
But there are some critical differences that might convince you to consider using MCF instead of the FBA program. To cut a long story short, here is a chart of key dissimilarities between FBA and MCF.
So, unlike FBA, the MCF Amazon fulfillment program handles orders placed on websites and other third-party channels. You get an additional standard shipping option, which entitles 3-5 business days delivery. Fees for MCF are a little bit higher, which is pretty understandable as Amazon encourages sellers to market their goods through their platform.
Benefits of Amazon Multi-channel Fulfillment
MCF FBA management option will definitely impress you with a long list of advantages. It surely allows sellers to expand their online presence without any additional headache and the need to move to another warehouse when their businesses grow. But there are other things online merchants love about this type of FBA inventory management system.
Convenience and Total Inventory Control
If you would like to grow your business without additional stress, MCF might be a great option for you. Amazon will take control over order fulfillment and item storage, which definitely costs less than hiring additional staff to your team or moving your inventory to a bigger premise.
Besides, you will be using a centralized Amazon warehouse management system for controlling Amazon and non-Amazon inventory from one dashboard. Thus, you will always have an idea of when it’s time to restock to have enough goods available for sale.
Fees
No surprises are waiting for you when you use MCF. The three-tiered pricing policy might confuse you at first. But when you carefully study the information Amazon provides, you will have no questions left about how much you will pay for the fulfillment of this or that order. Besides, there is a free calculator you can use to estimate the final expenses.
Performance and Reliability
Should we say that Amazon is a reliable partner with a huge customer following? They have around 150 USA-based fulfillment centers and more than 175 warehouses located all over the globe to deliver exceptional customer service.
Besides, all business processes are easy to set up. If you’ve already worked with FBA, you will have no issues at all as label creation and shipping requirements are the same for MCF packages.
All in all, MCF will keep your retail business more organized, while holding you away from stress you might have when handling all the orders by yourself. In this way, you will have more time for maintaining your energy levels and focusing on strategic business growth.
Trustworthy
Business processes work like a clock at Amazon, that is why you can be sure that the order received from your website or another third-party platform will be neatly packed and then sent to your customers in a timely fashion.
Cons of Amazon Multi-channel Fulfillment
There are some MCF downsides you should be aware of before considering this fulfillment model for your business. Perhaps, it would be better to use a multichannel management tool like SellerSkills to run your business.
High Fee
Business profitability is the key metric you should consider when running your business. That is why the expenses you make to make all the business processes work should be taken into account as well.
Mind that MCF fees are higher than FBA fees by 40-50%. Even though Amazon is transparent about the pricing policy and what fees you are going to pay in order to make use of their services, the operation costs might be too high for you. Especially, when you work with heavy goods or the ones having low-profit margins.
Branding Issues
If you are building your own brand and want customers to get their orders in branded boxes, this is not going to happen with Amazon. They use Amazon-branded packages for all orders that leave their warehouses, even for ones placed on your website. That is why you probably won’t enjoy MCF if you don’t want your branding efforts to be diluted.
Limited Shipping Options
Even though MCF offers more shipping options compared to FBA, you are still restricted when it comes to shipping the package globally. Thus, if you are running an international business, you should either use a global FBA or find an opportunity to handle international orders by yourself.
Product Categories Restrictions
You can’t sell anything you want using an MCF system. There are certain restrictions that prohibit alcohol, art and home decor pieces, electronics, dietary supplements, food, cosmetics and skin/hair care, and many more. Check the list of restricted categories here.
If it happens that you would like to run your online retail business more effectively but MCF sounds like not the best solution for you, consider SellerSkills.
Our platform will optimize your business processes by allowing you to sell on multiple popular marketplaces from a centralized panel. Create new listings on all marketplaces in several clicks, run a centralized inventory, arrange shipping more effectively, and handle orders from different channels from one dashboard. It’s free to start, so grab your chance and grow your business in a smart way.