FBA (Fulfillment by Amazon) enables e-commerce companies to completely outsource storage and delivery of goods, domestically. Amazon applies a strict set of rules and procedures, to ensure this their massive operations runs smoothly.
Many questions about the logistics aspects of FBA is answered by Amazon itself on the company’s site. However, things get slightly more complicated for importers, facing the task of moving goods from a factory floor in China – to a fulfillment center in the United States or elsewhere.
There are many things to consider. Insurance, incoterms and packaging labeling. The lists goes on.
In this article, Ron Berger, COO at Fleet – explains the entire process in a step by step manner. Keep reading, and learn more about packaging labeling requirements, customs procedures and how you can find an ‘Amazon FBA ready’ freight forwarder.
1. Pre-Shipment Preparations
How shall the cargo be labeled?
If you are shipping from Asia to an Amazon fulfillment center, the cargo will be labeled with an address heading similar to a domestic heading, with a few slight changes. The address usually consists of four lines:
1 – the name of the unique Amazon.com distribution center;
2 – the name of the seller’s legal name, c/o FBA;
3 – the physical address; and
4 – the city, state and zip code of the cargo’s final destination. Each product type will also need a unique bar code.
Each box or pallet that you ship to an Amazon fulfillment center must be properly identified with a shipment label. The shipment labels, whether for boxes or pallets, can be created and printed with Shipment Creation Tool. You must create a login as an Amazon seller in order to proceed here.
The label must be 3-1/3″ by 4″, and each label is unique and must not be photocopied for any use on a box outside of the one that it was printed for. The label should not be placed over the opening of the box or on any of the box seams.
Both the FBA and carrier label must be on a flat side of the box without any folds over the corners or any of the edges. Each label should also be completely visible so that it can be scanned at every stage of the process.
If your goods are palletted, every pallet that is sent requires four labels, one label on each visible face of the pallet. If packets are being placed into a master carton, then the unique label should be applied to the master carton and not to any of the individual packs.
Which incoterm is suitable for FBA?
In order to ship to an Amazon fulfillment center, you must accept terms that will not result in any billing to Amazon. What this means is you must pay for all services including delivery. To do this your supplier will suggest that you must accept the DDP (Delivered Duties Paid) terms of sale (incoterms). The supplier will charge you more for those terms. As the owner of the goods you must arrange all freight, payment of duties and customs clearance. When you use Fleet we recommend that you use ExW (Ex-Works) or FOB (Free on Board) incoterms. This means you are taking responsibility for paying the transportation and allows you to find the best price and service. With Fleet payment we enable shipping using a third party payment to the freight forwarder. Amazon gets no bills and you get the shipping savings.
Amazon will not act as an Importer of Record for any shipper, meaning that you are also responsible for staying in compliance with international law and US law when shipping. You are responsible for any costs and risks that come with shipping.
2. Finding a Freight Forwarder
What kind of forwarder do you suggest for Amazon FBA?
Any freight forwarder that you use should be fully licensed and allow you to save on costs when compared to direct shipping to a fulfillment center. This broker should be able to clear your packages with customs.
The first characteristic of any freight forwarder is expertise. The forwarder should have specific experience in shipping the kind of goods that are being shipped by that particular client. A huge part of this expertise is the financial stability of the forwarder.
The forwarder is actually the final word on many of the payments that must be made to be sure that your shipment is released, and that company should also have the proper insurance to ensure that the freight is paid for if it is lost by accident.
Secondly, a freight forwarder needs a great reputation with a wide network of contacts. If one shipping pathway is blocked, a great forwarder will be able to redirect it through another option. The forwarder that a client uses should be enrolled in trade associations to this end, and membership is a great vetting tool that clients can use as well.
Finally, a great forwarder needs great customer service. The process of shipping from Asia to the United States does not have to be difficult. The difference is personal care with a person who is specifically dedicated to an individual shipment. Many forwarders will give clients a multi channel option for communications, and forwarders will always have the ability to tell a client where a package is along the route at any time.
How can you find an ‘Amazon FBA ready’ freight forwarder?
Word of mouth is a great way to find a forwarder. Other Amazon sellers will have a great deal of information since they have gone through the import cycle before. There are forums, online groups where you can learn a lot not only about freight forwarders but also about other aspects about selling on Amazon.
Google is another great resource for finding freight forwarders that service areas where the fulfillment centers are.