Every ecommerce business owner out there wants to broaden horizons and connect to as many people as possible. This calls for a smooth order fulfillment process. Amazon Multi-Channel Fulfillment(MCF) is the new buzzword in the sphere of the ecommerce landscape. This newest service by Amazon solves the concern of countless business owners. However, ecommerce sellers still remain doubtful about Amazon MCF fee structure. No worries, here is the solution. This blog will provide an in-depth guide on Amazon MCF fees section among topics like why do you need Amazon MCF, components of Amazon MCF fees and Amazon MCF best practices. So, let us get going!
Amazon MCF v/s Amazon FBA
Amazon MCF is a new term and often gets mixed up with Amazon FBA. Though both are some sort of service provided by Amazon but they are different. Let's uncover this difference! The major difference is that the Amazon MCF program focuses on sales made through diverse sales channels. Contrary to this, Amazon FBA’s focal point is on sales completed only via the Amazon website. This further implies that ecommerce brands that sell only through Amazon can opt for Amazon FBA, whereas brands that want to diversify their range and further streamline their inventory management can choose Amazon Multi-Channel Fulfillment (MCF).
Why do you need Amazon MCF?
- Leverage Amazon Network: One of the top reasons to opt for Amazon MCF is to leverage Amazon fulfillment network. Amazon’s network can enhance the speed and reliability of the order fulfillment process. This is actually a lifesaver for businesses that experience tremendous demand and want to ensure timely and effective delivery.
- Save Your Time: Amazon MCF program helps businesses save time and minimize the complexity of fulfillment operations. As a result, making it quick and simple to handle logistical needs via a single platform.
- Seamless Integration: Another advantage of choosing Amazon MCF integration is seamless with ecommerce platforms such as Shopify, TikTok Shop, BigCommerce, eBay, WooCommerce, Walmart, NetSuite ERP via API plugins.
- Sustain Brand Identity: When you decide to go for Amazon MCF, you get to maintain your brand identity. How? Amazon MCF program makes use of unbranded packaging for your orders. This implies that your customers will receive their products in non-Amazon display packaging, enabling you to maintain your brand presence without getting overshadowed by Amazon.
What Components are Included in Amazon MCF Fees?
The two main components that drive the overall charges within Amazon MCF fees are as follows:
- Base Fulfillment fees: The base fee covers Amazon's expenses related to selecting, packaging, and shipping each item to the buyer.
- Additional Fees and Surcharges: This covers the additional ancillary charges that could be incurred on certain Amazon MCF orders.
Now, let us quickly jump into the details of both the points.
Base Fulfillment Fees: This fee is a mix of a bulk of variables that form the actual Amazon MCF fees.
- Product Size Tier: Based on weight and dimensions, Amazon divides products into sizes such as small standard, large standard, and large bulky. Since larger items are more expensive to ship and store. This is reflected in Amazon MCF fees.
- Shipping Weight: When it comes to Amazon shipping & fulfillment charges, the base price you pay Amazon per unit will increase for heavier items since they take more effort to carry. Under this, dead weight and dimensions both matter.
- Delivery Time: For Amazon MCF orders, ordinary delivery takes around 5 days; expedited shipping takes 3 days; and priority shipping takes 2 days. Faster order response times calls for higher fees per item.
- Units Per Order: Similar to FBA, Amazon offers bulk discounts with MCF. When shipping two or more, three or more, or four or more items in the same order, you get access to tiered deductions on the base rate.
As mentioned above, Amazon MCF fees vary on the basis of delivery time. There are three bifurcations namely standard, expedited and priority. Let’s take a brief glance at them:
Standard Delivery
For a regular 5-day delivery, Amazon Multi-Channel Fulfillment fees consist of:
- Standard-size (Small): $3.64 to $8.25 each unit
- Standard-size (Big): from $4 to $35.36 + per unit
- Big, bulky: $8.79 each + per unit
- Extra-large: $28.50 each + per unit
Expedited Delivery
- Little standard-size: from $3.93 to $11.90 each unit
- Large standard-size: $4.30 to $36.88 + per unit
- Big and bulky: $11.87 each + per unit
- Extra-large: $31.25 + per unit
Priority Delivery
Fees for priority Amazon MCF delivery consist of:
- Standard-size small (less than 16 ounces): $6.57 to $18.66 each
- Standard-size large (less than 3 pounds): $7.81 to $22.09 each
- Standard-size large (above 3 pounds): $8.95 each + per unit
- Big and bulky: $12.74 + per unit
- Extra-large: $38.50 each + per unit
What's More? Extra Fees and Surcharges
In addition to the above mentioned costs, you can incur some additional costs when it comes to Amazon MCF fees.
- Lithium Battery Fee: If a particular product has a lithium battery, an additional $0.11 per unit is charged. The reason being that it needs to be handled with special care.
- Disabling Amazon Logistics: The cost of blocking Amazon's last-mile delivery network attracts a surcharge of $5 on each MCF order. You would incur such costs only if you sell on a channel that forbids Amazon shipment such as eBay.
- Low Inventory Level cost: Effective from April 2024, all the MCF and FBA orders for products with continuously low inventory levels over the previous 30 and 90 days relative to sales volume are subject to a new cost. Prices vary per unit based on size tier, weight, and the degree of supply scarcity, ranging from $0.32 to $1.11 per unit.
- Charges for Remote Delivery: In remote areas like Alaska, Hawaii, Guam, Puerto Rico, and the Virgin Islands, where shipping is more expensive than on the mainland, there are significant surcharges, including a +100% base fee.
Apart from the above-mentioned fees, you may still incur some other ancillary charges Since Amazon MCF orders use the common fulfillment infrastructure, these still apply.
- Storage of inventory
- Extended storage
- Preparation service
- Processing of returns and labeling
Calculation Part: Amazon MCF Fees
Here comes the precise formula used to determine Amazon Multi-Channel Fulfillment fees:
- Find Out Product Size Tier: Utilizing Amazon's chart, classify each SKU into a standard category such as "small standard" or "large bulky" on the basis of its weight and dimensions.
- Think of Shipping Weight: To determine the proper "shipping weight," ascertain if the product's dimensions weight or dead weight is greater.
- Pick a Processing Speed: Depending on the needs of the customer and the urgency of the delivery, you need to decide between expedited 3-day, priority 2-day, or regular 5-day shipping.
- Decide Unit to Enter: Make a list of the number of pieces (1, 2, 3, or 4+) that have been ordered.
- Compute Basic Rate: Ascertain the basic fulfillment rate per unit by analyzing Amazon's MCF charge tables for the suitable product size, shipping speed, and quantity of units.
- Don't Forget Surcharges: Take into account any handling fees that may be applicable to the order, such as those for obstructing Amazon Logistics or lithium battery purchases.
- Multiply Across Items: Under this, the base rate + surcharges are multiplied by the number of shipped items to get the total Amazon MCF fees.
Bonus Tips for Amazon MCF
Making use of the Amazon fulfillment network helps you minimize costs and ensure easy shipping. Though there are drawbacks, adopting certain practices can help in the process. Here are some of them:
- Utilize Economies of Scale: With thousands of employees working in each Amazon fulfillment center, they are able to effectively manage their warehouses thanks to their state-of-the art technology and procedures available.
- Keep All of Your Inventory in One Location: The world's largest network of fulfillment centers is owned by Amazon. By utilizing the multi-channel fulfillment solution, you can escape managing your own warehouses. They take care of the laborious tasks of inventory management and order fulfillment via their efficient Amazon 3PL third-party logistics system.
- Provide Prompt Shipment: Amazon has a vast network of logistical partners. Their supply chain optimizations enable you to provide customers with expedited shipping options. This further enhances customer satisfaction and helps minimize Amazon MCF/FBA fees.
- Leverage Fulfillment with Integrated Solutions: Last but not least, you can maximize the advantages of Amazon MCF program by considering integrated solutions. These solutions amplify your order fulfillment, ensure real-time tracking and streamline inventory management. Amazon MCF by WebBee is one such go-to solution. This application begins with real-time inventory synchronization followed by automated order fulfillment. In addition to this, the reporting and analytics features offer insights into inventory and sales accompanied by dedicated support. As a result, with Amazon automation pick, pack, ship functionality you can scale your ecommerce business while stressing less about order fulfillment.
