Drop shipping is a distribution method that uses standard channels. Direct shipping bypasses these channels. Essentially, the business or product owner sends the products directly to consumers without needing a wholesaler or retailer to deliver them.
The service is an excellent way for consumers to receive a wide range of products at no cost.
How does direct shipping benefit the seller?
This guide will explain everything you need about Amazon Direct Shipping. We’ll cover how it works, the benefits of this service, and what Amazon seller errors you should avoid. Continue reading.
Amazon Shipping 101
Amazon is a global marketplace with over 100 million customers and 1.5 million sellers. Sellers are wise to be concerned about how shipping costs could affect their bottom line.
It would be irresponsible for these sellers to ship their products to U.S. customers. The packages could take weeks, and the shipping fee would be exorbitant.
There are a few shipping options available to sellers:
Fulfillment by Amazon
Merchant Fulfilled Orders
Amazon Direct Shipping
Understanding Fulfillment by Amazon
Amazon has more than 150 million square feet of space for storage in its warehouses around the globe. Amazon’s Fulfillment By Amazon service (FBA), available to independent sellers, gives them access to the shelves and Amazon’s customer support, returns, and Prime eligibility.
FBA allows sellers to act like large corporations without the associated costs. As Entrepreneur writes:3
Private labeling is the most popular method of leveraging the FBA model. Creating a label or brand, applying it to the product, and selling it on Amazon is essential.
FBA
Amazon FBA: Still on the fence? What is Amazon FBA?
FBA Fees You can estimate your FBA costs using an Amazon Seller Central tool. 1 This fee covers the costs of storing products in Amazon’s warehouse, picking and packing your orders, shipping them, and providing customer service after selling products. This fee is in addition to:
Monthly Inventory Storage Fees
Storage fees for long-term storage
Removing order Fees
Orders for disposal are subject to fees
Returns processing fees
Unplanned Service Fees
FBA: How it works- Amazon’s fulfillment service is broken down into four steps.
Send your inventory to Amazon, where it will be scanned for sale.
Amazon ships all orders directly to consumers.
Amazon pays the customer every two weeks and collects payment.
Amazon Customer Service (for which you pay) deals with questions, returns, and refunds.
Additional FBA Resources- Sellers can find video tutorials, newsletters, and more resources in Amazon’s Seller Central.
Merchant Fulfilled Orders
Merchant-filled orders are an alternative to FBA. You are simply storing and shipping the products yourself.
How it works
Amazon charges shipping based on product categories
The customer selects the shipping service, which will be passed to the seller as a credit for shipping.
The seller’s responsible for dealing with product packaging, creating shipping labels, and tracking shipments.
The merchant-fulfilled model or FBA may be better suited to your business goals depending on your company’s size, scale, and the products that you sell.
If you decide to use the FBA model, you will need to be able to to cover the service’s costs through revenue to justify your investment.
What is Amazon Direct Shipping
Amazon Direct Shipping is possible because FBA exists.
Remember the different fees that come with FBA? Long-term Storage Fees can be a significant pain for independent sellers. This is especially true when their product doesn’t sell well.
The long-term storage fee kicks in if a business’s items are kept in an Amazon warehouse over some time. Amazon says: 4
In addition to the monthly storage fee, inventory that has been at a fulfillment center for over 365 days will be charged an additional monthly long-term fee […] Inventory that has remained in a center for longer than 365 days will be charged an additional monthly long term storage fee of either $6.90/cubic foot or $0.15/unit.
These monthly storage fees and long-term storage costs add up fast, so sellers will want their inventory gone as soon as possible before reaching this critical point.
Using Amazon Direct Shipping, sellers can get this unsold, increasingly expensive-to-store inventory out of the warehouse and into the hands of customers who have signed up to receive direct shipping freebies.
What is Amazon Direct Shipping
Amazon warehouses do direct shipping. Direct shipping allows Amazon to ship freebies directly from its fulfillment centers to customers who sign up.
You might be wondering Why fulfillment centers are involved. Amazon still has to ship their products because they have already paid FBA fees. To fulfill direct shipping requests, the seller only needs to inform Amazon about free orders and where they should be shipped.
If sales increase, sellers will try to delay unloading inventory as long as they can. This eliminates the need for free items.
How do consumers sign up for direct shipping
Who is getting this excess inventory? Shoppers who are well-informed and have researched which sellers provide direct shipping will be savvy shoppers.
Amazon Direct Shipping does not have any affiliation with Amazon. Therefore, Prime members cannot simply log into their account and complete a form.
Facebook groups- You can find many options by searching “direct ship” on Facebook. Popular/vetted pages are:
KC’s Direct Ship Freebies & More (17,2K members must request membership)
Direct Ship/Unicorn Gifts/Surprise Freebies (Must request to join).
Direct Ship, Fun, and Freebies (13.4K members must join).
Freebie Sites- Searching “how to get stuff for free online” will bring up a lot of spam. Shoppers can find direct shipping offers on some legitimate freebie websites.
Internet Deals and Steals
Consumer Queen
Give me Freebies
Upfreebie
Reddit Some shoppers bravely go down the Reddit rabbit hole when looking for freebies. r/freebies is a popular sub-Reddit among Direct Ship fans, with over 778K subscribers.
After a consumer finds what they consider a legitimate site, they will fill out the Direct Ship form, which asks for their name, address, and email.