It’s almost impossible to find someone who hasn’t heard about Amazon these days. After all, it’s one of the world’s largest online retailer providers, boasting more than 100 million Amazon Prime members and over 197 million monthly visits from people across the globe.
Who’d have thought that a humble online bookstore founded in 1994 will become one of the most profitable brands today, amassing a market value of about $797 billion? However, maintaining a large and powerful online marketplace becomes more difficult over time. With more consumers and sellers eager to use the platform, and other online retailer providers on the rise, Amazon needs to think of innovative and creative ways to turn a profit.
One of Amazon’s most well-known offerings is their free shipping service. Assuring customers that their shipping is free of charge not only puts their minds at ease, but it also attracts more customers and increases their purchase frequency. However, if the consumer doesn’t pay for it, who does? How can Amazon afford to deliver things for free to its millions of users? The answer to these confusing questions is surprisingly simple. Putting it simply, all Amazon needed to do was partner up specific regional order fulfillment centers, like an East Coast fulfillment service provider people trust for customers in the Eastern US or a West Coast fulfillment service provider for those in the Western US.
How Fulfillment Services Help Generate Free Shipping
A fulfillment service provider offers third-party warehousing, distribution, shipping, returns, and inventory management to all types of merchants. They also utilize state-of-the-art strategies and equipment to help their clients optimize various aspects of their business, including:
- Processing of orders
- Product tracking
- On time deliveries
Although it’s possible for Amazon to build a fulfillment service team from the ground up, it’s expensive to start and maintain. The company will need to hire more people, rent or build more warehouses, as well as care for its upkeep on a regular basis. By delegating these tasks to a fulfillment service provider, Amazon can lower its operation costs and place its focus on other business matters.
Another benefit of outsourcing fulfillment services is it’s cheaper to ship items all over the country and abroad. Many reputable fulfillment services providers have more than one facility, with some located overseas. Having a strong foundation in a large market allows fulfillment services providers to offer lower shipping rates, as well as bulk delivery discounts. As a result, it’s unsurprising that Amazon has taken these benefits to its advantage.
Amazon has over 6 million sellers (both active and inactive), as well as localized storefronts from different parts of the world. Countries such as China, Germany, and Canada have an Amazon.com website that specializes in the selection and prices of their respective territories. Thanks to the efficiency and cost effectiveness of fulfillment service providers, Amazon can ship and deliver items to and from different countries without going over its allocated budget. This keeps Amazon, as well as its merchants and consumers, happy. It also gives the company the opportunity to expand its operations to other countries.
With the help of a reliable fulfillment service provider, Amazon can cut down on costs and still make a profit. It also gives the company the confidence to make its free shipping service accessible. At the time of writing this, Amazon offers different ways for consumers to qualify for free shipping. These methods are:
- Make a purchase that’s at least $25
- Purchase items that are eligible or have “FREE Shipping” posted on their product detail pages
- Become an Amazon Prime user to get unlimited free two-day shipping on eligible items with no minimum spend
With all that money saved from hiring a reliable fulfillment service provider, Amazon will receive the financial security it needs to give its consumers the guarantee of free and fast shipping.