When opening the online store on Amazon, sellers always compare the pros and cons between FBA and FBM fulfilled by 3pl warehouse - but why don’t try the dual warehouse model to combine the advantages of both? This is a certain thing that you will need to take into consideration when your business has reached a level. You are very likely to benefit more from the mode than your expectation!
What is Dual Warehouse Mode?
Dual warehouse mode is an inventory solution that sellers store their products and allocate the order in 2 warehouses, here we refer to Amazon warehouse and the 3pl warehouse. This mode is developed to add flexibility to your supply chain and reduce the operation cost.
Why dual warehouse?
While many people are concerned about the potential cost of another warehouse, the mode is actually more cost-effective than you thought.
The first advantage we are talking about is helping you save on long-term inventory fees. Amazon charges storing inventory for long periods of time of CAD 208 per cubic metre or $0.15 per unit, whichever is greater. This could be a huge cost when some products are not selling as fast as expected. The dual warehouse mode enables you to transfer your inventory between Amazon warehouses and 3pl warehouse to avoid the surcharge.
Another thing to control your cost is when you reach a success in Amazon and you wish to expand your business in other online marketplaces like Bestbuy, Walmart, and Etsy, or even opening your own Shopify store. Though FBA handling cost looks competitive compared to most warehouse, it is only when you sales are all on Amazon. If you are expanding your business on other marketplaces, Amazon multi-pick fee is then a flat price at CAD 3.15/item. This is the time that you must consider carefully to allocate your orders to 3pl warehouse to make sure that you are earn net profit without forcing your customers to buy bundles.
The last thing the dual warehouse mode could bring you is a stable stock level that contributes your marketing. We all know that staying at the top results of searching is the key to promoting your sales and revenue, and thus we are spending a lot paying Amazon the marketing expense. But not many Amazon sellers are aware that besides product description, image, sales and customer reviews, the stock level is also an essential factor that decides where your listing is displayed. You might not be able to find your listing on the first page of Search Engine Results Pages (SERP) after several times of out-of-stock despite the top performance in the past.
Dual warehouse mode empowers your success of inventory level optimization and we strongly recommend you a safety stock at 3-month-sale in a 3pl warehouse to ensure that you always have a backup. In this way, even if your container is delayed, (which is not a surprising thing during these years of supply chain disruption), you are still able to send the inventory to FBA to maintain your stock level.
SPEXPRESS’s strategically placed warehouses are based in Montreal, QC (Eastern Canada) and in Vancouver, BC (Western Canada). We've been providing award-winning order fulfillment solutions across Canada for small, mid-size and start-up growing companies for 11 years.
Our Montreal warehouse (250,000 square feet) operates 24 hours with 3 teams. Morning, evening and night shifts that work hard to bring customers a complete fulfillment service. We provide container uploading, e-commerce order fulfillment, as well as return management, and we have a professional team to handle FBA preparation& FBM service specifically - we are ready to accommodate all your developing needs!
Let SPEXPRESS manage your end-to-end fulfillment with inventory management, product storage, and delivery to save your money and time on the logistics processes!
Contact today our business development representative to get the free quotation:
- Tel : +1-888-812-8884
- Email: [email protected]