What’s A Freight Forwarder? Do You Need One For Your Amazon Business?
If you are selling on Amazon, then chances are you have come across the term – freight forwarder. Check out this complete guide of freight forwarders in 2021
Import and export is the critical point in the supply chain of any business. International marketplaces like Amazon involve moving large shipments across multiple modes of transport (rail, road, sea, and air) globally. As a result, not all Amazon sellers can correctly complete the paperwork and pay taxes and customs for an efficient shipping system.
Thus, you can work with freight forwarders to optimize your logistics operations. The article explains all the details about what a freight forwarder does and whether you need one for your Amazon business.
A freight forwarder is an intermediary that transports products from one location to another, especially internationally.
Freight forwarders provide the following services:
● Prepare bills of lading, customs duties, and valuation papers.
● Handle necessary paperwork and documents to export and import goods
● Gather goods and find a place to store them (for example, after they arrive at the port and before FedEx takes them to the Amazon warehouse)
● Packing inventory (if needed)
● Buy necessary cargo insurances
● Track domestic shipping
● Solve unexpected problems that your in-house team can’t handle, especially when dealing with overseas ports
In a nutshell, a freight forwarder can advise on the best way to ship goods and provide end-to-end shipping solutions for Amazon sellers of all sizes.
Yes, you’ll need a freight forwarder for your Amazon store if you want to ship large quantities (1000 – 5000 pieces or more). That said, not every Amazon FBA seller needs a freight forwarder. For example, if you order a small inventory (200 – 600 units), you can arrange the air shipments yourself, and you don’t need a forwarder to help you.
On the contrary, the large Amazon sellers deal in international shipping. Between shipping, import and customs, there are too many risks and opportunities for error. If you’ve started shipping products from China to the US by sea, you’ve probably noticed how complicated it can be:
● Dealing with customs
● Coordinating schedule
● Handling manufacturers’ shipments to China port, China port to US port, US port to Amazon warehouses.
Without knowledgeable helpers, you may lack proper documentation in shipping, delays due to inspections, and possible confiscation of your product.
Therefore, you should choose a freight forwarding company to give you the necessary advice and guidance and handle the paperwork. In addition, they streamline this complex and time-consuming process at a competitive price, saving you money and effort. Here are 3 specific benefits of using a forwarding service in detail.
One of the best benefits of using freight forwarders is that they offer competitive costs depending on the service your business needs.
● Lower prices by making special arrangements with other companies: Freight forwarders are shipping experts in the international shipping industry, so they have established relationships with carriers to deliver a more efficient route for your cargo. They can arrange and negotiate with transport services that save you costs and freight rates.
● Cut shipping costs: Evaluate your goods and consolidate them with other businesses’ shipments to handle both in one load. Most forwarders work with various carriers to give you the best options for moving your goods depending on your preferences, cost, and desired speed.
Also, freight rates tend to change daily. Unlike contract carriers, a freight forwarder sets rates for your shipments in real-time.
Freight forwarders have good knowledge and expertise in importing and exporting goods. Therefore, they have the most up-to-date information on each country’s customs rules to simplify essential processes such as:
● Handle all required paperwork and customs service
● Pay tariffs and handle other taxes
When the freight forwarder takes care of all these problems, you’ll never have your cargo stuck in the dock.
Each freight forwarder usually specializes in a particular area of service, including markets and modes of transport. As a result, you can choose how many services forwarders handle and have more control over how shipments are shipped.
By knowing your product type, the forwarder decides:
● Who do you book shipping with?
● What are the possible suitable routes?
● Which shipping service can do the best job of what?
The above ensures your goods arrive at their destination at the specified time in the same condition as they left the warehouse.
Here are the 5 best FBA Amazon freight forwarders based on popularity and Amazon seller reviews:
● Medley: http://www.medey.com
● Shippo: https://www.shippo.co.uk
● First Choice Ship: http://www.firstchoiceship.com
● Freightos: https://www.freightos.com
● Flexport: https://www.flexport.com
When choosing the best freight forwarder for Amazon FBA, you should consider the following 3 attributes:
● Transparency: Clearly explain what it costs, how it’s charged, and how you can include or exclude unnecessary features.
● Communication (customer service level and communication manner): Use a freight forwarder for Amazon FBA who communicates clearly and effectively, works across multiple time zones and is physically present in both the origin and destination countries.
● Familiarity with Amazon FBA: You can ask freight forwarders to optimize Amazon FBA costs on-site instead of just shipping to the port. By using a last-mile delivery partner, you can save high costs.
Here, you should note that Amazon makes money from long-term storage fees. As a result, holding unsold inventory is an expensive strategy. That’s why you should reclaim your inventory or liquidate it.
In general, all Amazon sellers must liquidate inventory at some point. The following section shows the best way to do it.
Before you grasp the tips on how to liquidate inventory on Amazon, there are 2 main points you need to keep in mind:
● From the very beginning, keep an eye on your inventory to understand how your inventory fluctuates over time.
● Identify potential surpluses, out-of-stock, or long-term (seasonal) inventory to have stock available for each case.
Next, implement the 5 best ways to liquidate inventory on Amazon:
● Discounts: You can choose to gradually reduce the price without immediate discount and manage the price directly in Seller Central.
● Amazon PPC: You can use Headline Search Ads, Sponsored Products, or traditional keyword-targeted PPC campaigns to drive more traffic to your listings.
● Third-party liquidation: It requires you to do little or nothing. However, Amazon discontinued its liquidation service in October 2017, so you need to research a third-party liquidation company.
● Charity Donation: Amazon is working with the world’s leading companies in product philanthropy and giving (Good360 in the US; and Barnardo’s, Salvation Army, and Newlife in the UK).
● Dumpster: Instead of returning the item or the seller to a new one, Dumpster is a request to destroy your remaining inventory. This option puts you in control of what happens to your inventory. You can submit your request in Seller Central via the Inventory Management Options tab.
Freight forwarders perform efficient logistics operations and offer solutions to optimize your Amazon business. Working with a freight forwarder optimizes your supply chain and addresses the specifics of shipping. From there, you can save time and money in the long run.
Don’t choose the cheapest forwarding service option. Instead, make sure that your chosen Amazon freight forwarder provides:
● Transparent quotes
● Collaborative communication
● Real-time updates on your shipment status
Finally, always keep an eye on inventory to make liquidation decisions and avoid storage fees.
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