Amazon Multi-Channel Fulfillment:
What You Need to Know in 2021
What is Amazon Multi-Channel Fulfillment?
Amazon multi-channel fulfillment (MCF) is Amazon’s fulfillment service for sellers with orders on sales channels other than Amazon. Ecommerce sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill orders for select non-Amazon channels.
Is Amazon Multi-Channel Fulfillment (MCF) the same as Fulfillment by Amazon (FBA)?
Most, if not all Amazon sellers are familiar with and use Fulfillment by Amazon at least in part to fulfill their Amazon orders. Sellers simply send their inventory to Amazon, which then takes care of the logistics for them. Amazon Multi-Channel Fulfillment is similar at a high level, but is more different than many realize.
The primary difference between Amazon MCF and Amazon FBA is that MCF is for sales on non-Amazon channels, while of course FBA is for Amazon sales only. Moreover, MCF is significantly more expensive, offers lower service levels and support, and also has slower speed tiers.
Despite these differences, FBA and MCF are indeed using the same exact fulfillment network, and they pull from the same inventory. So if you’re struggling with lower FBA limits than you’d like, you should keep in mind that MCF inventory does indeed count against your FBA cap.
How does Amazon Multi-Channel Fulfillment work?
Multi-Channel Fulfillment is simple – sellers store their inventory with Amazon, and Amazon fulfills their orders.
First, sellers connect their ecommerce channels to Amazon to establish an order feed. Amazon MCF is somewhat limited in the integrations that it provides – it works with prominent ecommerce platforms like Shopify, BigCommerce, and WooCommerce, but it doesn’t support sales from marketplaces like Walmart, eBay, and Etsy.
Next, sellers send their inventory to Amazon (if they haven’t already). What seems like a simple step is actually filled with challenges, as Amazon is continually changing the rules for FBA inventory limits and making it harder for sellers to place all the inventory they’d like in the system.
Then, as orders flow in, Amazon will pick, pack, and ship the order to the customer. For MCF, Amazon’s legendary fulfillment speed is a little less legendary – they prioritize FBA volume first, so MCF is noticeably slower and has worse metrics.
What does Amazon MCF do well?
MCF can work well for online sellers that are just starting out and want to keep things simple. At its core, it’s a way to get orders to customers quickly and with minimal fuss.
Keeps your fulfillment simple
It seems like every ecommerce seller already has an Amazon account and is using FBA; when expanding to additional channels, why not keep the operations side simple and keep relying on Amazon?
Amazon has the largest network of ecommerce fulfillment centers in the world, and they certainly know how to get packages from Point A to Point B. For a seller that is focusing on winning business through a new channel, reducing operational headaches can be a big plus.
Enables fast shipping
You may have heard this already, but customers don’t just like fast & free shipping: they demand it. The rewards for meeting that demand are great – Amazon and Walmart both observed a 50% sales lift for sellers that added the badge.
Amazon MCF has three speeds calculated from when the order ships: 1 business day (Priority), 2 business days (Expedited), or 3-5 business days (Standard).
What are Amazon MCF’s weaknesses?
Understandably, Amazon MCF takes the backseat to FBA as a fulfillment service, and this dynamic creates a lot of pitfalls for users of the service..
More expensive than FBA
As you can see in the above table with prices from June 2021, Amazon MCF is simply not a good deal compared to FBA. Amazon FBA has low rates for Small Standard items (<16oz), but Amazon more than doubles the price for multi-channel fulfillment.
For larger items, FBA already isn’t as good a deal as it is for smaller ones, but Amazon increases the price for MCF regardless.
Uses Amazon branding
MCF shares assets with the rest of Amazon fulfillment, so of course all of the packaging is exactly the same as what you get when you order towels from Amazon Basics. By using MCF, sellers are advertising for Amazon with the delivery experience. This is a bigger deal than many realize; custom unboxing experiences are opportunities to delight customers and increase loyalty, but Amazon MCF makes this impossible.
The experience is also confusing for customers looking for particular packages, like those in apartment buildings with shared package rooms. They didn’t order the package from Amazon, so they’ll skip past looking at Amazon boxes. They could entirely miss the package, and report that it never came – a costly experience for the seller.
Threatens your Amazon sales
IPI score and FBA inventory limits are hard enough to manage as it is; MCF adds additional complexity and risk.
When Amazon shifted their FBA limit strategy in April 2021 to storage-type limits, sellers saw their inventory limits cut by 20-60%. Since FBA and MCF share inventory limits and affect IPI score the same way, any sales fulfilled by MCF eat into stock that could have been sold on Amazon and fulfilled by FBA.
Few, if any sellers have as high inventory limits as they’d like for the FBA volume alone; if they’re not getting enough space for their FBA volume, then MCF compounds the problem.
If MCF sales heat up for a particular SKU, then the SKU can easily go out of stock unexpectedly. This will then negatively impact the seller’s overall IPI score, lowering total inventory limits. Then, the seller is further constrained from selling as much as they’d like on Amazon.
Doesn’t support key ecommerce channels
Amazon MCF is more of a solution for sellers’ web stores than it is for marketplaces – it works with Shopify, WooCommerce, BigCommerce, but not any other major marketplaces.
This is likely a function of the branding issue – Walmart, for instance, doesn’t want their orders being delivered in Amazon-branded packaging. That’s not likely to change any time soon, so sellers pursuing a true multichannel ecommerce strategy will have to look elsewhere.
Restricts what you can sell
Amazon restricts a very long list of product categories, and you might be surprised by what falls onto this list. Automotive products, cosmetics, dietary supplements, electronics, jewelry, and lighting are just a few of the categories that simply won’t work for MCF.
Other products are sometimes allowed, but also subject to review by Amazon and frequently can be declined; sellers will sometimes find themselves in the situation where part of their SKUs are approved, but others are not. If they’re relying on Amazon MCF, they then only have a partial solution and are realistically back to square one.
Amazon customer service doesn’t help you
Amazon’s service doesn’t take responsibility for helping customers with delivery issues. From their FAQ:
“You are responsible for providing customer service for your MCF orders. This includes handling delivery inquiries and requests for replacements, refunds, and returns.”
Sellers are relying on MCF for fulfillment – how are they supposed to answer delivery inquiries when they’re not involved with the delivery? Realistically, the only option available to customers and sellers alike when something goes wrong is submitting a reimbursement for lost or damaged orders to Amazon. FBA sellers know that reimbursements are a difficult process – many use dedicated reimbursement software or an Amazon agency to handle it for them.
Ultimately, the challenge is that delivery issues with Amazon MCF will invariably lead to an upset customer. Savvy sellers know that fixing a customer service issue can lead to more loyal customers, but in the case of MCF, they don’t even have the chance to fix the issue. An unhappy customer is a lost customer.
What’s the best alternative to Amazon for multi-channel fulfillment?
Sellers looking for an alternative to Amazon Multi-Channel Fulfillment need a solution that doesn’t suffer from the same pitfalls outlined above. Cahoot, an innovative peer-to-peer fulfillment platform, offers affordable nationwide fast shipping and is designed for multi-channel sellers. By partnering with Cahoot, the best alternative to Amazon MCF, sellers will reap all the potential benefits of Amazon’s program without the downsides.
Cahoot’s flexible ecommerce fulfillment network offers Amazon Fulfillment by Merchant (FBM), Amazon Seller Fulfilled Prime (SFP), and fulfillment for all other ecommerce sales channels all on the same streamlined platform. So why should sellers choose to outsource their multi-channel fulfillment to Cahoot?
Cahoot unlocks multi-channel fulfillment across all channels
Sellers looking to expand face a seemingly endless series of roadblocks when they need to grow operations to keep up with sales. Building a first (or fifth) warehouse ties up capital and takes years. Marketplace fulfillment solutions like FBA or Amazon MCF don’t work with other sales channels. Legacy 3PLs don’t cover the US well with fast shipping, and newer tech-enabled 3PLs don’t play nice with existing fulfillment solutions.
Cahoot solves all of those issues. We don’t force sellers into long-term contracts, we plug into all of your sales channels, our US fulfillment centers cover the whole country with 1- and 2-day shipping at ground rates, and critically, our network works seamlessly with sellers’ existing fulfillment. We can even incorporate existing fulfillment networks into our automated label optimization software, which improves sellers’ existing fulfillment operations even as we expand their 1- and 2-day reach.
Ecommerce merchants looking for growth know that selling across multiple marketplaces and their own website is the way of the future – a recent Shopify study showed that selling on 3+ channels increases revenue by 190% over just one channel. They can’t rely on Amazon MCF, which is designed for Amazon’s priorities, not those of the seller. Cahoot is the fulfillment partner of the future – flexible, fast, and affordable. Talk to us to learn how we can boost your sales with fast & free shipping, all while streamlining your operations.