How Amazon's Receive Process Impacts Suppliers

Learn about:

• Amazon's Product Receive Workflow

• How the Parcel Identifier (PID) Process Works

• What Amazon's Receive Process Means for Suppliers

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Amazon suppliers have two primary shipping options: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FMB). Suppliers who opt for FBA must comply with Amazon's rules for packing, labeling, and shipping their products to Amazon's warehouses. Understanding how Amazon manages the arrival of products at its warehouses is crucial for suppliers. Failure to adhere to Amazon's guidelines can result in delays and chargebacks. So, let's take a look at how Amazon's receiving process works.

Related Reading: How to Dispute an Amazon Chargeback

Amazon's Product Receive Workflow

Using sophisticated technology, Amazon optimizes and automates its receiving and sorting processes to stow supplier products quickly and safely. This process typically takes place in four steps:

1. Trailer Unload/Breakdown: This step is when the pallets received are broken down into the carton level. Please note: product received via pallet label is outside the scope of this article, as that process uses a different workflow.

2. Carton Receive: The initial receive attempt happens at the carton level. Amazon receives freight at the carton level using a Parcel Identifier (PID). The PID is used to scan the carton content label. Without opening the carton the PID marks all the products in the carton as received using ASN data to determine what is in the carton.

3. Tote: Next, the products are removed from the carton into a yellow tote, then travel to the stow station.

4. Stow Station: Finally, all products are stowed at a single sellable unit level in a stow station. From there, sellable units are picked as soon as the order comes in.

Amazon receives most freight at the carton level using a Parcel Identifier (PID). The PID is used to scan the carton content label. Without opening the carton the PID marks all the products in the carton as received using ASN data to determine what is in the carton. This process deviates from the processes used by many other retailers, as the more standard process receives and stows products at the pallet level. 

How the Parcel Identifier (PID) Process Works

Once the carton is received, the PID will execute the following checklist on each carton:

1. Label check

2. ASN check

3. ASIN check

4. Carton check

The success of the PID checks will determine precisely how the carton is received. If some or all of the PID checks fail, the process is not as straightforward. 

Error at First Receive Attempt

Depending on the status of the PID checks (pass/fail), the carton will follow 1 of 4 workflows. The specific workflow a carton falls into will determine the speed of the receive process and any potential chargebacks for the supplier.

If all checks are successful, then:

A. PID Carton Received → Efficient (or Auto) Receive

If there is a fail, then:

B. Manual Each Receive → Slow

C. Prep Each Receive → Slower

D. Problem Each Receive → Slowest

Receive Paths

Once the initial receive attempt has failed, there are three basic methods to receive products:

Efficient (or Auto) Receive

Within the Efficient Receive path, there are two different receive paths:

1. Auto-Receive utilizes PID to scan labels on cartons as they move on a conveyor. The items are received and recorded based on the ASN data.

2. Manual LP is a process where an Amazon fulfillment center associate scans labels on individual cartons. This process also receives items based on the ASN data.

Each Receive

The Each Receive method requires an Amazon fulfillment center associate to open the cartons and scan each sellable item individually to receive the products. 

Prep Receive

The Prep Receive process is the most inefficient and costly process out of the three. Amazon frequently receives products that are not adequately packaged for shipment.  The Prep Receive process ensures the products align with Amazon's e-commerce-ready-packaging standards for shipments to end customers.

For example, fragile products made of glass, ceramics, etc., must be bubble-wrapped and securely boxed to ensure they reach their final destination intact. Even non-fragile items like clothing, plush toys, and pillows might require additional prep, like bagging, to prevent dust, dirt, or moisture from damaging the product in transit. After the items are packaged according to Amazon's standards, they can move on to the stow stations.

What Amazon's Receive Process Means for Suppliers

Due to the PID process, and the high level of automation in this process, it's crucial for suppliers to precisely prepare, pack, and ship their products to fulfillment centers.

For example, if a supplier sends an order with the correct quantity but messes up the Advanced Shipping Notice (ASN), it could lead to a failed initial receive or shortage. Additionally, inconsistencies in packaging or labeling can cause delays and incur additional costs for suppliers. For instance, if products arrive without proper labeling or packaging, they may need to be manually processed, leading to inefficiencies and potential chargebacks.

Suppliers must ensure compliance with Amazon's packaging and labeling requirements to facilitate smooth receive processes and maintain positive relationships with the e-commerce giant.

Related Reading: EDI 856: Ship Notice/Manifest -- Explaining EDI

SupplyPike for Amazon Suppliers

Ready to take control of your revenue and minimize deductions? SupplyPike's software solution for Amazon automates validity checks and dispute resolution to ensure that Amazon suppliers stay ahead of deductions, including AP, Co-Op, and chargebacks.

Don't let lost revenue eat into your bottom line. Meet with a SupplyPike team member today to discover how our solution can protect your profits and optimize your business operations.