Welcome to our comprehensive guide on using a freight forwarder for Amazon FBA sellers! This article will cover everything you need to know about this service. We hope you find it helpful as you navigate the world of e-commerce.
As Amazon sellers, it’s important to focus on our areas of expertise and use them to drive success. Whether you’re skilled at identifying trends, proficient at product research, or a wordsmith at listing optimization, it’s important to leverage your strengths in order to achieve the best results.
Do you have extensive knowledge in international shipping and cargo transportation? If not, don’t worry – you’re not alone.
Transporting products from the factory to the Amazon warehouse is a crucial, yet often overlooked aspect of running a business. It can also be a complex process, especially in the current climate. That’s why we’ve gathered important information and consulted with a freight forwarding expert to bring you the essentials on how a freight forwarding company can support your Amazon business.
What is a Freight Forwarder?
A freight forwarder is a company that helps sellers transport their goods, typically from an overseas factory, to Amazon distribution centers. If you’ve done your product research, found a manufacturer, and budgeted for your first inventory shipment, you might think you’re ready to start selling on Amazon. However, you still need to figure out how to get your product from the factory to the Amazon warehouse.
This can be especially challenging if your factory is located in another country. You need to consider shipping costs, storage fees, and customs clearance. A freight forwarder can handle all of these logistics for you, making it easier for you to focus on other aspects of your business.
What Does a Freight Forwarder Do?
A freight forwarder is responsible for coordinating the transport of your product over long distances. This can take various forms, such as:
- Ground shipping: This is a common option for many Amazon sellers, even if they’re using air or sea freight. Ground shipping typically uses trailer trucks or trains (more common in Europe) to transport goods. This method is essential for getting products to Amazon distribution centers from ports or airports in remote locations. Ground shipping tends to cost more than sea freight but less than air freight, depending on the destination country’s infrastructure.
- Shipping by sea: This method uses massive cargo ships to transport products in bulk. It’s often the most affordable option, but it can also be slower.
- If you’re shipping by sea, you’ll need to be familiar with two packing methods: FCL (full container load) and LCL (less than container load).
- FCL refers to a shipping container that only contains products from one seller. If you’re shipping an FCL shipment, your products will occupy an entire container. This has several benefits: it’s usually more affordable, as it’s easier for shipping companies to load a full container than to divide one up for multiple parties; FCL containers are all unloaded at once (from the same party), so the process is faster and potentially comes with fewer fees; and it’s ideal for large items and bulk shipments.
- LCL refers to shipping containers that are divided among multiple sellers. If you’re concerned about storage space at your own warehouse or want to keep your inventory lean for financial reasons, LCL shipments allow you to ship smaller volumes – you’re essentially sharing the space of the container. LCL shipments also have their own benefits: they’re best for steady inventory flow and leaner quantities; they make delivery appointments easier by giving you more flexibility at the port (which may save you money on fees); and they’re best for “split shipments” – products that are going to several different Amazon warehouses.
- Air shipping: This is typically the most expensive but fastest option. FBA sellers who need expedited shipping or are shipping smaller quantities of products may be interested in air freight shipping.
What Are Typical Freight Forwarding Services?
Freight forwarders typically offer the following services:
- Organizing and coordinating the storage and shipping logistics
- Tracking inland transportation
- Preparing export documentation
- Providing warehousing solutions
- Negotiating freight charges
- Finding storage space
- Consolidating shipments
- Assisting with insurance claims
- Facilitating customs clearance
- Providing short-term storage
- Conducting product inspections
Think of a freight forwarder as a “shipping agent” that handles all the details of your international shipping needs, including the various stages of your product’s journey.
Why Should I Use a Freight Forwarder?
There are several reasons why you might want to consider using a freight forwarder for your Amazon business:
- A freight forwarder can use their purchasing power to negotiate lower transport costs for you.
- By outsourcing the logistics and customs procedures to a freight forwarder, you can focus on running your business.
- Having a freight forwarding company working on your behalf can provide you with expert guidance and support throughout the shipping process.
- Mistakes in international trade can be costly, and a freight forwarder can help you avoid them.
Keven Chen, Co-founder of ForwarderOne (a leading Amazon-focused freight forwarding company), emphasizes the importance of having someone to turn to in the complex world of international e-commerce. He advises new FBA sellers to be cautious, as “international trade is crazy and mistakes in international trade can be crazy expensive.” Without the right support, you might end up shipping your products without the necessary paperwork, leading to delays and potential confiscation.
Think of a freight forwarder as your lawyer in court.
While it’s not required to use a freight forwarder to do business on Amazon, there are several benefits to having one.
- When you have your supplier handle the shipping logistics for you, they will hire their own freight forwarder. You are not the freight forwarder’s client in this case; your supplier is. This means you don’t have a direct connection or a relationship with the freight forwarder, and if something goes wrong, you don’t have anyone to turn to. By choosing your own freight forwarding service, you get personalized service and a contact who cares about your business.
- Your freight forwarder should know you and your product well.
- Many freight forwarders have connections and relationships in the industry that they can leverage to negotiate lower rates and consolidate shipments, saving you money.
- Working with a freight forwarder can also help you save on transportation rates, which can change daily.
- A freight forwarder can handle the complicated and time-consuming processes of tariff documents, shipping paperwork, customs clearance, and compliance classification, simplifying them for you.
- Some freight forwarders offer extra services such as handling banking paperwork or providing additional insurance policies to protect your products. Don’t be afraid to ask about these options when looking for the right freight forwarder.
How Much Does an Amazon Freight Forwarder Cost?
The cost of your freight forwarding services will depend on several factors, including:
- The weight of the goods you’re shipping
- The volume of the goods, measured in cubic meters (CBM)
- The origin and destination of the shipment – for example, a 100kg shipment from China to Los Angeles might be cheaper than a 100kg shipment from China to New York due to the distance of the journey.
Keep in mind that some types of products, such as alcohol-based products, liquids, certain batteries, and other “dangerous goods,” may cost more to ship than other types of products.
Questions to Ask an Amazon Freight Forwarder
When considering a freight forwarder for your Amazon business, here are some questions to ask:
- Do they have experience with Amazon? The Amazon ecosystem is complex and constantly evolving, with strict shipping, packing, and storing guidelines that must be followed. Make sure the freight forwarder has experience working with Amazon-focused clients, and ask about the specific marketplaces they have experience with. Additionally, consider whether they have representation in the country of origin and destination for your products.
- Do they handle customs clearance? This is especially important if you are a non-US Amazon seller. Some freight forwarders may not offer this service, so make sure to confirm that they will handle customs clearance for you.
- How much does customs clearance cost? The cost of customs clearance can vary based on the number of shipments you’re moving per month, the terms you agree to when you sign up, and your relationship with the freight forwarder. You may be required to pay before delivery, but if you have a long-standing relationship with the freight forwarder, they may offer more favorable terms (such as allowing you to pay 90 days after delivery).
- Do they offer tailored services? You’ll want a freight forwarder that understands your specific needs and provides personal attention to your products. Fragile home decor, for example, requires different shipping methods than a box of phone cases.
Freight Forwarder Terminology
Here are some terms you might encounter when working with a freight forwarder:
- Bill of Lading (BOL) – This is a contract between the carrier and shipper that accompanies your shipped goods. Your freight forwarder will issue the BOL form.
- Export license – If your supplier doesn’t have an export license, your freight forwarder will need to issue one. As the client, you won’t see the export license, but the freight forwarder needs it to export from China.
- Inspection certificate – This may be required for specialized products.
- Commercial invoice – This document shows China what you’re exporting and your destination country what you plan to import (including the contents, quantity, and value). You’ll receive a commercial invoice from your supplier.
- Packing list – This document lists the number of boxes, units per box, and other details about the packing of your goods. You’ll also receive this from your supplier.
- Special certificates – If you’re shipping children’s products, medical devices, or anything with soil or seeds that requires USDA approval, you may need special documentation.
- Entry summary – This is a document you receive from US customs after you pay your import duty. It shows the value of goods declared to customs and maintains records of the shipment. Your freight forwarder will provide the entry summary to you after your shipment has cleared customs in the US.
- Proof of Delivery (POD) – Once the delivery order is signed at its destination, the freight forwarder will give you a POD document to verify that the journey has.
Who is the Best Amazon FBA Freight Forwarders?
ForwarderOne of course! ForwarderOne specializes in FBA freight forwarding. They have customized solutions tailed for each customer.