Amazon Vendor: drop shipment (Amazon Direct Fulfillment)

About this article

This is a guide on how to manage drop shipments on Amazon Vendor, via ChannelEngine, as part of the Amazon Direct Fulfillment program.

Table of contents

Introduction

Requirements

Supported fulfillment models

Supported features

Setup

Receiving orders

Shipments

Returns and cancelations

Payments

Introduction

If you have a vendor relationship with Amazon, then you might be eligible to take advantage of the Amazon Direct Fulfillment program, given that you meet certain requirements. Direct Fulfillment is a drop shipment program that is designed for Amazon vendors. Direct Fulfillment enables vendors to ship products directly to Amazon customers, all while taking advantage of the Amazon brand and customer-facing operations. 

Buyers on Amazon have an unaltered order experience, just as with any drop-ship model. The buyer sees that the product is sold by and shipped by Amazon. 

Requirements

• You qualify to participate in the Direct Fulfillment program. Contact Amazon to find out if you qualify.
• The Amazon Vendor plugin is activated on your ChannelEngine environment.

Supported fulfillment models

Direct Fulfillment offers multiple drop shipment models, enabling vendors to ship goods using either Amazon-contracted carriers or their own, preferred carriers. Currently, ChannelEngine supports the following Amazon Direct Fulfillment models:

• Amazon own carrier (own label) - you use an Amazon-preferred carrier but supply your own shipping labels.
• Amazon own carrier - you use an Amazon-preferred carrier and use Amazon's shipping labels.
• Vendor own carrier - you use your own shipping carrier and labels.

Contact your ChannelEngine account manager if you require support for other Amazon Direct Fulfillment models.

Supported features

• Purchase orders
• Shipments (split)
• Cancelations (partial)
• Stock updates to multiple stock locations

Setup

With Amazon

1. To use Direct Fulfillment, you must meet Amazon’s specific requirements for the program.
2. To sign up for Direct Fulfillment, contact Amazon or ask your vendor manager to set up your application.
3. If you are accepted into the program, specific products are designated for Direct Fulfillment through the program.

On ChannelEngine

In your Amazon Vendor channel plugin, enable the Direct Fulfillment program:

1. Go to Setup, Plugin-specific settings.
2. In Programs enabled, select Direct fulfillment.
3. Click Save.

Receiving orders

If a product needs to be dropshipped, Amazon Vendor submits a purchase order to the vendor. Managing drop shipment purchase orders from Amazon Vendor follows the same flow as for standard orders and shipments via ChannelEngine. For more information on ChannelEngine’s order flow, check out ChannelEngine: orders and Merchant API: orders.

To track purchase orders that come from Amazon Vendor, via ChannelEngine, your external management systems must have an active API integration with ChannelEngine or a plugin that allows you to retrieve orders and submit shipments to and from the channel.

Receive drop shipment orders from Amazon with these steps:

1. Amazon Vendor submits a purchase order to the vendor.
2. The purchase order appears as a standard order in your Orders overview on ChannelEngine, and it is available for your external systems to consume.
   • The purchase order number is stored in the Channel order no. field on ChannelEngine, within the order details.
   • The total price of the purchase order is equal to the sum of the purchase prices of the products in the order. The purchase price is pre-agreed between you and Amazon Vendor, and it is different from the selling price that is published on Amazon.
3. When you import the order, the response shows which carrier Amazon recommends you use in the Shipment method field.

Shipments

Drop shipments within the Direct Fulfillment model follow the same flow as with usual shipments on ChannelEngine. For more information on ChannelEngine’s shipment flow, check out ChannelEngine: shipments and Merchant API: shipments.

1. Proceed with the standard shipping process via your external systems. To create a shipment from your external system, send a request via POST v2/shipments.
2. Provide the tracking code and a shipment method by adding the TrackTraceNo and Method parameters to the request body.
   1. The tracking code is a mandatory field.
   2. If using an Amazon Own Carrier model, use the carrier that is specified in the order response's Shipment method field.

Shipping labels

1. Generate a shipping label based on the shipping model that you use for the Direct Fulfillment program.
2. If you use Amazon's shipping labels, retrieve your shipping label at Orders, Documents or via the Merchant API. To retrieve your shipping label via the Merchant API:
   1. Send a request with GET /v2/orders/documents.
   2. Locate and note down the DocumentID of the shipping label in the response. 
   3. Retrieve the shipping label via GET /v2/orders/documents/file. 

Returns and cancelations

Returns are declared by and managed by Amazon. These returns are visible on ChannelEngine after they are accepted by Amazon.

Create cancelations via the Merchant API or on the web interface. Partial cancelations are allowed.

Payments

1. To release payment for the shipped items, follow the regular shipping process via ChannelEngine.
2. After the shipment is shipped, ChannelEngine creates a payment request for the purchase price amount that Amazon indicated in the related purchase order.
3. Then, ChannelEngine automatically submits the payment request to Amazon Vendor.