Your Guide to Amazon Multi-Channel Fulfillment
Amazon Multi-Channel Fulfillment (MCF) has been a highly contested topic among business owners since it was originally announced several years ago. Some brands have been hesitant to give up control of their shipping operations to Amazon, mostly due to concerns about customer experience, lack of access to first-party data, and alleged anti-competitive practices. Others, however, find it hard to deny the benefits of tapping into Amazon’s logistics and fulfillment infrastructure, which is one of the most robust in the world.
Brands have lots of choices when it comes to ecommerce fulfillment—handling it in-house, outsourcing to a 3PL, or using MCF. In this article, we’ll cover MCF, and the pros and cons brands can expect when working with Amazon.
What is Amazon Multi-Channel Fulfillment (MCF)?
MCF is essentially a third-party logistics program (3PL) that allows businesses to use Amazon to fulfill shipments ordered through various sales channels. Businesses typically use their own website or a separate marketplace such as Shopify or WooCommerce to sell their product in this case. Sellers can meet the demands of consumers for fast fulfillment with Amazon’s 2-day and 1-day shipping options. Standard shipping (3-5 business days) can also be applied to MCF orders.
Amazon MCF vs. Fulfillment by Amazon (FBA)
Outside of MCF, Amazon also offers a separate fulfillment service: Fulfillment by Amazon (FBA). The concept of FBA is similar to MCF, except businesses sell their product on Amazon. FBA gives sellers access to standard and 2-day shipping as well as Amazon’s customer service support and return policies for their products. MCF charges more in fees than FBA by tacking on an additional fee for orders placed with vendors outside of Amazon’s marketplace.
How MCF works
Once a consumer orders one of your products (either through your website or one of the eligible marketplaces), Amazon takes over the fulfillment process for your company. Orders are processed and shipped through Amazon and delivered in an Amazon-branded box. Businesses can store their inventory in Amazon warehouses until they’re ready for shipment.
The pros of MCF
The efficiency of Amazon’s fulfillment centers and warehouses can allow your business to declutter and destress when it comes to inventory concerns. Using MCF will also allow businesses to have access to networks and resources that can help them flourish while maintaining credibility.
In addition to meeting your shipment needs, MCF can take some of the stress of budgeting off your plate with a simple pricing structure. Once you’ve calculated your storage and fulfillment fees, you’re free to worry about every other aspect that is key to building a business. This fulfillment system could help streamline both your finances and your shipment process while your business capitalizes on the credibility that comes with Prime-level delivery.
The cons of MCF
As beneficial as MCF can be, it comes with baggage that could harm your business. For example, not all online marketplaces allow MCF. Amazon has a number of integrations including Shopify, WooCommerce, BigCommerce, VTex and many more. However, you have to ensure each system works seamlessly with Amazon. It’s your responsibility to check every transaction to ensure the systems are communicating correctly—and they often don’t. If you use websites such as Walmart, eBay or Jet.com, then you will have to find another site or logistics service.
It’s also important to consider that MCF may impact your brand’s identity. When Amazon ships your product, it uses Amazon-branded boxes, which could confuse customers.
Another disadvantage is inventory management. A similar problem for both FBA and MCF, Amazon charges hefty fees to store product in their warehouses. And if your product isn’t selling at the retailer’s frequency minimums, additional fees rack up quickly. This requires a strong product management strategy and accurate projections in order to keep your margins.
It’s important to note that Amazon also has its own set of restrictions that could limit the scope of your business. The ecommerce giant will not ship aerosols, batteries, perishables or flammable substances. Sellers can also be penalized with a long-term storage fee for any product that isn’t sold within 181 days. The storage pricing may be simple, but the cost of additional fees could complicate the financial status of your business. Amazon also tends to focus on FBA orders rather than MCF orders, which can lead to delayed shipping times and higher fees.
Summary and takeaways
Multi-Channel Fulfillment (MCF) is a fulfillment service offered by Amazon that allows businesses to sell products on their own website or through a third-party vendor. Amazon takes care of the shipping operations for the business.
MCF was derived from Fulfillment by Amazon (FBA), another fulfillment service Amazon created. The key difference between FBA and MCF is that FBA orders are sold on Amazon while MCF orders are sold on marketplaces outside of Amazon.
Businesses using MCF can store part or all of their inventory in Amazon warehouses. MCF orders are shipped from Amazon warehouses with 2-day, 1-day, or standard shipping.
Amazon’s MCF program allows businesses to build credibility among consumers while benefiting from fast delivery and simple pricing.
Businesses planning to use MCF should take Amazon’s restrictions on product inventory and long-term storage into consideration before committing to the service.
