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Selling on Amazon is a complex affair. A merchant, be it in the FBA or FBM program, 3PLs, and Prep Centers need to be extremely careful around their inventory process along with the use of an appropriate channel synchronization mechanism. Amazon merchants also constantly need to adhere to Amazon's stringent rules around inventory levels, packaging and labeling, shipping, and more.
Hopstack's integration with the Amazon Seller Platform solves some of the biggest challenges faced by Amazon FBA Prep Centers and 3PL providers that serve Amazon sellers. This includes inventory reconciliation, synchronization and allocation, omnichannel order consolidation, fulfillment lifecycle management, automated label printing, and shipping management.
Challenges Faced by Third Party Logistics Providers and Amazon Prep Centers
Playing the role of an intermediary between Amazon Sellers and their customers or Amazon fulfillment centers comes with its own set of responsibilities and challenges. Listed below are the biggest challenges that 3PLs and Prep Centers face today.
1.Spreadsheet-based Processes
A lot of warehouses and fulfillment centers today aren't digitized enough to be able to fully abandon manual and spreadsheet-based processes. Consolidating orders, creating picklists, keeping track of inventory, and more are often the areas of the supply chain that remain manual. This not only slows down the entire fulfillment cycle but also makes it significantly more prone to error.
2. Multi-customer Complexity
Most large 3PLs and Amazon Prep services today cater to a large set of Amazon sellers. This means that the activities undertaken need to be able to meet the unique needs of the tenants. Most intermediaries fail at this since they may not have the functionality of setting business rules to effectively cater to different customers.
3. Compliance with Amazon’s Guidelines
It's well known in the eCommerce logistics industry that Amazon has strict conditions around inventory, packaging, and shipping, and failing to comply with the same often leads to strict penalties. And more importantly, these guidelines are ever-changing. This makes the job harder for logistics providers to continually comply with the rules set out by Amazon.
Most 3PLs and Prep Centers lack the technology to automate the processes around inventory, packaging, labeling, shipping, and more and to course correct in case there are any errors.
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4. Scalability
The 3PL and Amazon Prep segments have seen tremendous growth in recent years. At the same time, we are constantly witnessing the entry of new D2C and e-Commerce companies that need specialized prep services. The technology, resources, and processes need to be capable of keeping up with the growth.
Most warehouses often find it a challenge to manage the increasing complexity and lose out on the quality with which they serve Amazon sellers/merchants.
The customers, on the other hand, must be able to view and track their activity and operations individually. This involves viewing inventory, orders, fulfillment activity, and more. Most of the technology deployed today doesn't enable this.
Solving Inventory and Order Management Third-party-logistics(3PL) Providers
Hopstack's out-of-the-box integration with the Amazon Seller Platform solves some of the biggest problems faced by 3PL companies that cater to Amazon sellers. Firstly, Hopstack consolidates all orders from different channels, including Amazon, into one single dashboard in real time.
This enables warehouses and fulfillment partners to be at the top of their efficiency while fulfilling different orders. Hopstack also enables real-time inventory synchronization and reconciliation between channels to minimize the risk of ‘stockouts' or inaccurate inventory levels ultimately leading to poor customer service. The sellers can also allocate certain inventory thresholds to the Amazon marketplace and can sync all necessary codes such as UPC, ASIN, MSKU, and more.
The platform also automates and optimizes the end-to-end order fulfillment lifecycle. FBM sellers who are served by the 3PLs are often competing against Amazon's Prime delivery, thus efficiency in order fulfillment is critical to surviving the competition.
Hopstack's proprietary picking module algorithms help cut picking time significantly by configuring the right picking method, generating smart picklists, and optimizing each picker's route.
The platform also enables customers to compare and select different shipping carriers and shipping cost options to find the right balance between cost and delivery time. Depending on the carrier selected, Hopstack's comprehensive packaging module also generates and automatically prints the shipping label compliant with the carrier's guidelines. The tracking generated by the carrier's API is automatically synced with the particular Amazon order.
Hopstack's previous 3PL customers have witnessed a 96% order fill time, a 71% reduction in dock-to-stock time, a 187% order fulfillment rate, and other significant process improvements.
The platform provides 3PLs with visibility into all their inbound consignments from different merchants. Hopstack's smart putaway and slotting algorithms enable 3PLs to place inventory optimally to save time and cost and can also help them configure the slotting strategy.
The fulfillment operating system also provides a multi-tenant model for its 3PL clients where the 3PL's customers can log into the platform and view their inventory levels, orders, and fulfillment metrics and can set alerts for certain situations/activities. The 3PL provider gets a high degree of flexibility with the level of control and visibility its customers get to view and control and can configure the same.
Hopstack Software Solutions for Amazon FBA Prep Centers
There is no doubt that Prep Centers act as an important intermediary between Amazon sellers and Amazon FBA fulfillment centers. They help the customers comply with Amazon's policies around inventory units, packaging and bundling, labeling, shipping, and more. This eases the process on the seller's part and lets a specialized service manage the Amazon preparation aspect.
Inventory and Inbound Management
Hopstack provides a comprehensive suite of modules that enable Prep Centers to synchronize customer products (with ASIN, UPC, GTIN, MSKU, FNSKU, and more), shipping plans, packaging, labeling, shipping status, and more.
A Prep Center using Hopstack follows a similar multi-tenant model as discussed above and provides a customer-facing portal for Amazon FBA sellers to manage and track their inventory and shipping plans.
The customer uses the same portal to create consignments to inform the prep providers about the inbound inventory meant for preparation. The entire inbound process is automated and optimized by the platform using receiving, quality check, sorting, and putaway modules powered by machine learning. This replaces many processes and activities that were driven by spreadsheets previously and helps the prep center easily scale its processes.
FBA Prep and Fulfillment: Market Opportunity, Challenges, and Technological Solutions
Download the guideAutomating Shipping Plan and Generating Orders
The Hopstack platform allows prep providers to automatically generate shipping plans as soon as the individual inventory levels hit a certain threshold as decided by the prep center and the customer.
The shipping plan in this case is based on recommendations provided by Amazon for inventory allocation for different FBA warehouses. Hopstack automatically creates the necessary individual order which may contain several boxes/packages as specified on the shipping plan. The details of the same are retrieved from the Amazon Shipping Plan generation API.
Shipping Plan (Orders) Picking and Prepping
Each order generated in the previous step is fulfilled individually and is optimized by the picking and packing modules as provided by Hopstack. The Hopstack platform manages and optimizes the entire fulfillment lifecycle that including picking, prepping, and packing.
The prepping step involves printing labels for individual units that must include the FNSKU. This entire activity is automated as Hopstack interacts with the Amazon Seller platform to seamlessly generate and print the labels using hardware integrations such as Zebra, Rollo, and more.
Packaging and Shipping
Hopstack also lets Prep Centers and FBA Merchants take full control of their packaging process. For example, Hopstack's proprietary Rule Engine lets them decide the maximum weight, ideal dimensions, and the maximum number of units in each package. This ensures that the FBA shipment's specifications are compliant with the guidelines set out by Amazon.
Hopstack's integration with weighing scales and dimensioning devices such as the ones provided by Dymo, Freightsnap, and Cubsican helps prep centers comply with the abovementioned rules and set up alerts in case there is any deviation.
The integration with the Amazon Seller platform also automates generating and printing of the shipping label which is directly sourced from Amazon's (and its partner network's) shipping API. The warehouse associate can print the shipping labels with just one click using the Hopstack platform.
Multi-tenant System for FBA Sellers
Hopstack enables top prep centers' customers to log into the platform and view their inventory levels, shipping plan activity, prep and fulfillment service, status, and more. They can also view key performance metrics as a part of Hopstack's comprehensive Analytics and Reporting modules.
The Prep Centers can also enable or disable certain aspects of the platform that the customer can and cannot view and have complete flexibility around it. This helps Prep Centers in providing highly customized solutions depending on the intended use cases.
Bottom Line
Hopstack's integration with the Amazon Seller platform solves some of the biggest challenges 3PL providers and FBA Prep services face today. The Amazon API integration with the platform first ensures that every process in the multi-channel fulfillment process is compliant with Amazon's rules around inventory management, packaging, labeling, and shipping.
Hopstack's suite of solutions for Amazon sellers and intermediaries also helps replace all manual spreadsheet-based processes and digitizes the entire inbound and outbound lifecycle.
This helps logistics companies and prep centers significantly reduce human errors and improve their operational efficiency. Hopstack also helps in optimizing and automating the end-to-end process in a warehouse with its intelligent AI and ML-powered putaway, picking, packing, and shipping modules.
As for the Amazon prep centers, Hopstack solves the biggest challenges in scaling up the operations and adding new Amazon FBA merchants as customers. Hopstack provides a robust infrastructure to synchronize multi-customer orders, inventory, Amazon Seller account details, and shipping details. By providing a multi-tenant model with a customer-facing dashboard, Hopstack also enables the prep center's customers to view and track their operations.
If you are a logistics provider catering to Amazon merchants or a Prep Center looking to automate and simplify your Amazon seller operations, schedule a demo with Hopstack today to learn more about how the Digital Warehouse Operating System can help.
