Whether you’re already selling internationally, or are reluctant to sell overseas due to the hassle and risk involved, an international fulfillment service could be a good fit for your business.
While there are plenty of options available to you when it comes to outsourcing your fulfillment, two of the most notable are Amazon and eBay’s own fulfillment programs: Amazon FBA and eBay GSP.
Although it’s not necessarily a case of Amazon FBA vs eBay GSP, it is worth understanding how they both operate and the benefits and drawbacks of each, which is what you’ll find in this article.
What is Amazon FBA?
Fulfillment by Amazon, more commonly referred to as FBA, is the marketplace’s own fulfillment service, used by online retailers to fulfill orders from Amazon and other channels.
More specifically, FBA is a service available to all of Amazon’s sellers, enabling them to store their products in an Amazon fulfillment center, and hand over the fulfillment of the product – packaging, sorting and shipping – to Amazon once the item has sold.
What are the benefits of using Amazon FBA?
While there are some huge benefits to using Amazon FBA, arguably the biggest is an increase in sales.
According to a 2014 survey, it is believed that 71% of FBA users reported a 20% increase in sales as a result of using the program.
As if that’s not enough, some of the additional benefits include the fact that you will benefit from Amazon’s acclaimed 24/7 customer service, as well as faster shipping rates, increase your chances of achieving Amazon buy box status, eliminate fulfillment shipping efforts and gain access to Amazon Prime customers.
Disadvantages of using Amazon FBA
FBA is great, but it’s not for everyone.
As with anything, there are indeed drawbacks that you should be aware of.
For example, cost is a big one and you should take into account your profit margin as the fees might cut into it more than you’d like, especially if you’re only a casual seller.
Take a look at Amazon FBA fees here.
Subsequently, not every product will be profitable to sell with FBA, which is why you should realistically only list your best performing products on it and fulfill the rest yourself.
Without the use of an inventory management system, it can also be incredibly difficult to keep track of the inventory you store in Amazon’s fulfillment centers, and you can end up with obsolete inventory.
Too late? Have a look at these inventory reduction strategies.
This leads on to the next point – storage fees, or specifically long-term storage fees.
You may or may not be aware that you will be charged by Amazon if your item(s) have been stored in their warehouse over a certain amount of time. On the 15th February and 15th August each year, an inventory clean-up is conducted by FBA, and for those items that have been stored for over 365 days, a fee of £882.50 per cubic metre will be charged.
International FBA programmes
When it comes to international selling, there are several FBA programs you can choose from; FBA Export, European Fulfillment Network (EFN), Multi-Country Inventory (MCI), and the recently release Pan-European FBA.
FBA Export enables you to offer your products to customers in up to 26 European countries.
That said, you should be aware that your product(s) won’t actually be listed on Amazon’s international marketplaces, instead it enables your product to be shipped to international customers who have made the purchase on your local Amazon marketplace.
European Fulfillment Network (EFN)
EFN enables you to store items in fulfillment centers in the UK, and fulfill orders from any of Amazon’s European marketplaces.
In addition to this, you will benefit from having the reassurance that your customers are benefiting from local-language customer service and returns handling.
This program is ideal for those of you looking to test how individual products will perform in different European markets, but you should also be aware that with this option you will be required to pay a local fulfillment fee when selling on the UK site, and a cross-border EFN fee when selling to international customers.
If you’re wondering how Amazon’s Pan-European FBA differs to the European Fulfillment Network (EFN), Pan-European allows you to ship your stock to a fulfilment centre, where Amazon will distribute it to each of their fulfillment centers in Europe based on anticipated demand.
This means that customers in each of the five European marketplaces – UK, Spain, Germany, France and Italy – will have fast delivery options for your product(s).
Unlike with EFN, selling with Pan-European FBA makes your products eligible for Amazon Prime, subsequently increasing the visibility of millions of customers across the European marketplaces.
With this option, you will also only pay a local fulfillment fee when selling on any of the EU marketplaces.
Multi-Country Inventory allows you to send your most popular inventory directly to the Amazon fulfilment centers in each of the countries you products are listed on, again enabling them to be stored close to the customers.
This option is, however, better suited to those of you who have a clear growth plan for the EU, as it requires some understanding of which products sell well in which markets.
Amazon FBA or eBay GSP: the differences
While we have yet to discuss the ins and outs of eBay’s Global Shipping Program, it’s important to be aware that the the biggest difference between the two is that FBA extends beyond Amazon, whereas eBay GSP doesn’t.
In other words, with Amazon’s FBA, you can also fulfill orders from channels other than Amazon, whereas with eBay’s GSP you can only fulfil eBay orders.
Specifically, FBA’s multichannel fulfillment capabilities simply means that you can list and sell your FBA inventory on other channels, including both eBay and your own website, while still fulfilling the orders through FBA.
Below we have compiled some details of eBay GSP, to help you understand not only how it works, but also how it differs to Fulfilment by Amazon.
What is eBay GSP?
eBay’s Global Shipping Program otherwise known as GSP, is eBay’s international delivery programme that enables UK and US sellers to sell to international buyers, without the hassle and risk of dealing with the processes that come from cross-border selling.
What this basically means is that when selling to an international eBay buyer, all you are required to do is simply ship the item directly to a depot, where the shipping centre will then take over fulfillment of the item.
This includes verification of the product(s), completion of customs forms, international postage and parcel tracking.
Benefits to using eBay GSP
GSP also helps to protect sellers and eliminate the risk of international selling on eBay, by taking over full responsibility as soon as the product arrives at the depot.
This means you don’t have to worry about refunding the item in the event of it becoming lost or damaged in transit.
What’s also reassuring is that should the customer leave either neutral or negative feedback about shipping costs or delivery time, the review will be removed from eBay, so long as the item was sent to the fulfillment centre within an appropriate timescale.
There is also no fee to join the Global Shipping Program and your final fee will be based on the price of the item, postage charges to the UK shipping centre and any additional fees you charge the customer.
You should be aware, however, that standard UK eBay selling fees and PayPal fees will apply, as will PayPal’s transaction fees for international selling payments.
Disadvantages of using eBay GSP
As with anything, eBay GSP does have some disadvantages that you should be aware of.
Firstly, should you use eBay’s Global Shipping Program, your customers will be faced with essentially two postage costs, the first to cover the expense of you sending the item to the shipping depot. The second is the international postage and additional fees.
Unfortunately, GSP aren’t yet able to combine orders, which means that each item must be shipped individually, and paid for separately.
It’s also important to bear in mind that to use GSP you must have a UK seller rating of standard or higher. In addition, you should be aware that not all items will be eligible, nor will certain countries.
Regardless of whether you use Fulfillment by Amazon or eBay’s Global Shipping Program, you should always bear in mind that despite their advantages, each program does come at a cost, and therefore prior to making any decision you should review your budget, margin and profitability, and determine whether it’s worth the investment.