Amazon Direct Fulfillment | Complete Guide

Direct Fulfillment

Direct Fulfillment Program Overview

Direct Fulfillment is Amazon’s service that allows vendors to ship products directly to customers while leveraging Amazon’s logistics infrastructure. When a customer places an order, vendors receive notifications and pre-paid shipping labels from Amazon, enabling them to fulfill orders directly from their warehouses.

Core Requirements and Processes

Order Management

Vendors access orders through the “Orders > Direct Fulfillment Orders” section in Vendor Central. The process involves:

  • Order Notification: Vendors receive immediate notifications when customers place orders
  • Label Generation: Amazon provides pre-paid shipping labels in PNG or ZPL formats
  • Inventory Updates: Vendors must update inventory levels at least once every 24 hours per warehouse
  • Order Cancellation: If unable to fulfill entire orders, vendors must cancel them as partial fulfillment is not permitted

Bulk Operations

Bulk Shipment Confirmation enables vendors to process multiple orders efficiently using Excel spreadsheets:

  1. Navigate to Orders section and select Direct Fulfillment Orders
  2. Choose “Update with spreadsheet” option
  3. Download template file and input tracking IDs
  4. Confirm shipments by entering ‘Yes’, ‘yes’, or ‘Y’
  5. Save file in .csv format without altering language settings

Multi-Box Configuration

For products requiring multiple packages, vendors can configure shipments using:

  • Bulk Configuration: CSV spreadsheet updates for multiple products
  • Single Product Configuration: Direct editing in Vendor Central item details
  • Order Level Configuration: Per-order adjustments through order details page
  • EDI Integration: Advanced Shipment Notifications (ASN) for automated processing

Technical Integration

Direct Fulfillment API

The DF API suite streamlines the entire order cycle with minimal manual intervention, reducing errors and enhancing efficiency. Vendors should review country-specific business requirements and utilize the DF FAQ for guidance.

EDI Integration

EDI Dynamic Sandbox provides a testing environment that replicates production conditions:

  • Purpose: Ensures parity between test and production environments
  • Initial Focus: Ship label request (SL) and ship label response (SLR) EDI messages
  • Testing Process: Scenario-based test orders with validation through SL/SLR messages
  • Outcomes: Negative tests return controlled errors; positive tests confirm label generation

Inventory Management

Inventory Cloning allows vendors to copy retail products to Direct Fulfillment inventory:

  • Replicates ASIN information including cost from parent vendor code
  • Enables products to receive purchase orders while fulfilling individual customer orders
  • Supports different costs for Direct Fulfillment through post-cloning cost updates
  • Can be managed individually or via EDI/API

Shipping and Labeling

Label Formats

Shipping Labels are available in two formats:

  • PNG Format: Graphic format for direct printing (15 cm x 10 cm / 6x4 inches)
  • ZPL Format: XML-based format for thermal printers requiring ZPL file viewer

Label Preferences

Vendor Label Preference settings allow vendors to:

  • Select preferred shipping label format (PNG or ZPL)
  • Choose resolutions (203 dpi or 300 dpi for ZPL)
  • Set default settings for all warehouses or configure individual warehouse preferences
  • Ensure compatibility with printer setups and operational requirements

Virtual Warehouse Setup

Virtual Warehouses enable flexible lead time management by:

  • Creating secondary warehouse profiles using existing warehouse addresses
  • Assigning custom lead times for different product processing schedules
  • Optimizing supply chain logistics to align with market demands
  • Setup via Settings > Warehouse Settings > Add a Direct Fulfillment Warehouse

Performance Metrics and Monitoring

Key Performance Indicators

Direct Fulfillment Key Metrics include:

  • Delivery Estimated Accuracy (DEA): On-time delivery performance measurement
  • Expected Ship Date (ExSD): Required shipping date validated after carrier pickup
  • Estimated Delivery Date (EDD): Customer delivery date compliance tracking
  • Carrier First Scan (CFS): 14-hour scan requirement for “In Transit” status
  • Scan Rate (SR): Percentage of shipments with correct tracking IDs and delivery confirmation

Reporting and Analytics

Reports and Metrics assess vendor performance through:

  • Operational Performance Report: Adherence to Amazon’s operational standards
  • Cancellation Rate: Frequency of order cancellations affecting account status
  • Late Shipment: Tracking of shipments made after expected dates
  • Refunds and Replacements: Measurement of incorrect or damaged product orders
  • Missed Carrier First Scan: Percentage of shipments not scanned within 24 hours
  • Ship Method Mismatch: Incidents involving wrong ship methods or carriers

Program Policies and Compliance

Program Requirements

Program Policies encompass:

  • Inventory Management: Accurate stock level maintenance and prompt updates
  • Order Fulfillment: Adherence to Amazon’s processing and shipping standards
  • Communication Protocols: Use of designated channels for updates and notifications
  • Quality Standards: Ensuring seamless integration with Amazon’s fulfillment network

Data Protection

Data Protection Policy mandates:

  • Data Handling: Customer data deletion within 30 days unless required for fulfillment
  • Security Measures: Written incident-response plans and comprehensive information security programs
  • Encryption: Data encryption both at rest and in transit
  • Compliance Requirements: Security log monitoring, annual staff training, and ongoing policy adherence

Suspension and Reinstatement

Performance Management includes:

  • Suspension Triggers: Poor performance in cancellation rate, ship method mismatch, refunds/replacements
  • Suspension Impact: Inventory set to zero with no new orders until reinstatement
  • Reinstatement Process: Submission of corrective plans outlining steps to meet performance standards
  • Monitoring Requirements: Regular performance report reviews to ensure ongoing compliance

Direct Fulfillment enables vendors to maintain control over their fulfillment operations while leveraging Amazon’s customer base and logistics infrastructure, requiring careful attention to performance metrics and policy compliance to ensure program success.

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