Your strategic choice of Amazon 3PL (Third Party Logistics provider) is one of the most important that you will make on your Amazon vendor journey. These are the people you will trust to get the right stock into the right Amazon Fulfilment Centre with the right paperwork so that you can be paid. Variations from Amazon’s strict processes and requirements will be met with fines in the form of chargebacks. In extreme cases if delivery is attempted with the wrong type of vehicle or an unsafe load, the delivery may be refused. If stock arrives without the correct labelling, it may take much longer to be received. It may even be received incorrectly, meaning that you aren’t paid the correct amount for your stock.
So how do you make sure that you’re making the right choice of Amazon 3PL? There are many hauliers who will claim to be able to successfully deliver into Amazon. However, they have a wide range of skill levels and process adherence. We’ve developed this set of questions that you should include in your selection process to ensure that you Amazon 3PL really knows their stuff.
Questions to ask your Amazon 3PL shortlist
1. Do they deliver to Amazon for other clients?
If there are existing Amazon 3PL options on your shortlist then many of the other questions on the list can be shortcut, as they will already have access to a number of the portals required, and will be used to the case, carton and pallet labelling requirements. However, it is still worth checking some of the specifics below, such as whether they can wait at FCs. Any category- or channel-specific questions will also need working through as some Amazon 3PLs only do the basics.
2. Do they Have carrier central access and a standard carrier alpha code?
If your shortlisted carrier says that they can deliver to Amazon, but doesn’t have either of these then you will need plenty of reassurance that they will in fact be able to make the deliveries you need. These are the starting point requirements. There are many more complexities to the Amazon inbound process and if they don’t have these basics in place they will have to work hard to get up to speed.
3. Can the warehouse create SSCC labels for cases, cartons (if required) and pallets?
The majority of warehouse providers are familiar with creating Serialised Shipment Container Codes (SSCC) which track which product is on which pallet in which quantity. Most use EDI to transmit this data to Amazon but it’s always worth checking that their Warehouse Management System has the capabilities to capture the correct data and transmit it at carton or pallet level.
If their systems can’t create SSCC labels then Vendor Central provides the option to create AMZNCC labels instead, which performs the same function. These can then be printed and applied to the cartons and/or pallets for sending in to Amazon. Your 3PL will need to be able to operate one of these systems in order to be able to provide the services you need.
4. Do they use EDI to send Advance Shipping Notifications?
Amazon require the SSCC data as part of the Advancer Shipment Notification (ASN). There are a few ways to do this.
- The 3PL uses Vendor Central to create AMZNCC labels and submit the ASN on the Amazon Vendor Central Portal. This is manual and time consuming. If this is the method your potential Amazon 3PL would use, it is likely that there will be errors which could lead to fines in the form of chargebacks. It would be prudent to clarify which party would be responsible for those fines in this event.
- The 3PL passes all the pallet level SSCC data to your system and you transmit this via EDI to Amazon. This is quite common as all the data is then held in your system.
- The 3PL sends the ASN data via EDI directly to Amazon using your Global Location Number (GLN). This is often the easiest and most straightforward route.
5. Can they deliver within the normal shipping window?
Ship windows do vary by category, but typically an order placed on a Monday must be delivered by the Friday. When a purchase order is placed, the Ship From & Ship To window is clearly displayed. As part of your agreement you will need to consider how many days you will require to accept/reject or amend purchase orders before you can instruct the 3PL. They will need to be able to pick, pack and deliver the order within the remaining days. It’s good to understand up front how the timing will work in practice.
If the 3PL requests a delivery date outside of the ship window it may result in a PO On Time Compliance chargeback. This means it’s important that they understand the time frames they are working to with each order. In drawing up your agreement with a new 3PL, consider who should be responsible for any On Time Compliance chargebacks, and how you will work together to minimise them.
6. What data do they need to make a booking on Carrier Central?
Carrier Central is the portal where Amazon 3PL businesses book their loads into individual Amazon Fulfilment Centres. It’s useful for the client to understand what level of detail they will require to make a booking in order to know how your process flow will work. If they’re experienced at delivering to Amazon they will be familiar with using the Bill Of Lading (BOL) to book a slot meaning that they don’t have to wait until the Advanced Shipment Notification (ASN) is created. This may mean, for example, that you have more time to adjust quantities on your accepted purchase order without jeopardising the delivery date.
7. When do they need the data by in order to make the booking?
As above, Amazon have strict delivery windows. There are also a number of process steps that you will need to take (accepting purchase orders, changing quantities etc) before the data can be handed over to the haulier. It’s helpful to have a clear understanding of how many days the 3PL needs at their end. This means you can check that this approach will give you enough time for your own process steps without creating issues or missing delivery windows.
8. How do they need the order data to be delivered by you?
Again, this allows you to understand whether your own processes will need to change to make the system work, or whether they will be able to dovetail with the way that you currently work.
9. Do they deliver to all the Amazon Fulfilment Centres?
Unless you join a program such as PICS, where delivery is only to a small number of fulfilment centres, then you willl likely have to supply most Amazon’s FCs. It’s important to find an Amazon 3PL who can deliver everywhere, or you will miss out on opportunities to sell. This check is particularly important if you’re delivering to Fresh FCs (see below).
10. Can they deliver 24/7?
At peak times of the year getting a booking slot at Amazon FC’s is hard. Flexibility is crucial here, so picking a partner that can deliver 24/7 will open up a lot more booking slots.
11. If there is a delay at a fulfilment centre, can they wait?
Again, at peak times such as the run up to Prime Day, Black Friday and Christmas, the FCs are very busy and delays are common. The ability to wait it out is an advantage. If your carrier isn’t able to wait then there’s the option to re-book via Carrier Central. However, there’s no guarantee that they won’t run into the same issue next time, and every day of delay can be a day off sale.
12. Will they accept responsibility for some types of chargeback?
Amazon manage their inbound process with fines (chargebacks) for non-compliance with their timings and processes. We find that some clients are frustrated with their existing 3PL because of, for example, a high proportion of no-shows. These are a double-whammy for the client because:
- Their products aren’t delivered when they were expecting and
- The client is then fined for the no-show
Where possible, it’s better to try to negotiate that the 3PL pays these fines. This way they are incentivised to make changes via Carrier Central rather than simply not show at the appointed time.
13. Can the provide Proof of Arrival on request?
As above, Amazon will fine vendors if they aren’t on-site within their delivery window. To dispute these fines, the vendor will need to be able to provide a Proof of Arrival. Amazon will not provide these.
Category/Channel-Specific requirements for Amazon 3PLs
Certain channels or product categories have additional delivery requirements. You will need to make sure that your chosen Amazon 3PL is able to deal with any that apply:
- For products with expiry or Best Before dates such as food and healthcare products, the 3PL will need to supply Lot Codes and Best Before Expiry dates as well as all the other necessary information. This information can either be sent electronically as part of the ASN by EDI. Alternatively it can be entered manually when creating AMZNCC labels and submitting the ASN via vendor central.
- Deliveries into Fresh depots often have to arrive on specified days of the week. If you’re in Amazon Fresh, check that your intended haulier can manage this complexity.
- HAZMAT products, for instance batteries, paints & cleaning supplies etc have to be clearly labelled with HAZMAT stickers on the pallets
- Overweight or Oversize pallets have to be stickered so that Amazon associates know that certain pallets are heavy or large
- If you’re a supplier of Beers, Wines and Spirits or Medicines, you will already be aware that you are facing more restrictions on you choice of 3PL because of the category you operate in
Other Considerstions for your choice of Amazon 3PL
Many of our clients prefer to outsource the transport to a pallet network. Their hub and spoke models are built to optimise deliveries into the likes of Amazon. Palletline are part of the Preferred Carrier Programme and work closely with Amazon to ensure they’re constantly meeting targets and thresholds for delivery.
We’re seeing an weekly increase in the number of clients using Amazon Freight to make their deliveries. The key advantages of this program are that Amazon manage all the inbound bookings. As a result, there’s no PO on Time Compliance charges.
If you’re wondering whether there are better solutions for your Amazon deliveries, or you’re actively searching for a new provider, please let us know. We’d be happy to be part of the team looking at the best options to suit your business.