Streamline your Vendor Central Shipments with Amazon's PICS Service
PICS is an initiative exclusively for Amazon Vendors and stands for Pan-EU Inbound Consolidation Service. In a nutshell, it's an agreement you have with Amazon which limits the number of fulfilment centres you need to send your stock into.
If you're interested in reducing the complexity and workload of servicing multiple FC's in the UK, EU, or both, then read on...
What is PICS
PICS is designed to simplify the process of sending your inventory to Amazon, by reducing the number of fulfilment centres you need to deliver into.
With PICS, you can consolidate your shipments into a single entry point (called an 'injection point'), reducing the hassle and cost of managing shipments to sometimes a dozen or more FCs.
Amazon then spreads this stock out across it's network, placing products closer to its customers.
How PICS Works
Amazon’s Pan-EU Inbound Consolidation Service operates by allowing you to send your Purchase Orders to a limited number of Amazon fulfilment centres.
This streamlined process can potentially save on PO processing, shipment preparation time, and lead to transportation savings due to improved truck fill rates.
By consolidating freight, you may also see reduced chargebacks and compliance-related penalties due to fewer deliveries.
The Benefits
By participating in PICS, you'll enjoy several benefits:
- Potential Processing Savings: With fewer purchase orders, admin, packing and labelling time will drop significantly.
- Increased Pallet Fill Rates: More units per PO mean fewer pallets are needed for the same volume, optimising space and reducing costs.
- Transportation Savings: Consolidated orders can improve truck fill rates, leading to direct cost savings on transportation.
Why PICS Might Be Right for Your Vendor Account
If your Amazon Marketing Agency operating within the UK and looking to simplify your shipments or if you're a UK Vendor expanding into Europe (or vice versa), PICS offers a much-needed solution to the complexity of managing multiple fulfilment centres.
Not only does it reduce logistical strain, but it also aligns with a cost-effective supply chain strategy.
The Setup Process
Eligibility and activation for PICS varies between Vendor accounts.
- In some accounts you may be able to activate it directly.
- You may be contacted by an Amazon representative by email who suggests it for your account.
- It may come up during your annual Vendor negotiations (AVN) as an initiative suggested by Amazon.
Once PICS is activated on your account, the programme begins swiftly and order consolidation generally starts within 5–7 days of joining, and you don't need to make any significant changes on your end.
Amazon will designate the fulfilment centre closest to your operating address in the EU as your injection point, simplifying the process further. If you are in discussions with an Amazon representative, you may also be able to request specific injection points.
How Much Does it Cost
PICS is a "contra-cogs" agreement, which means it is an additional percentage "term" added to your account, and deducted from invoices you raise to Amazon.
The percentage will vary depending on the size and complexity of your account, the number of purchase orders you process and how many fulfilment centres you typically send into. Bear in mind that Amazon will incur costs on their side by having to process and distribute your stock across its fulfilment network.
Typical rates we have seen for PICS have ranged from 2%-5% (on top of your existing terms).
It's really important that you do your analysis of your current costs to service multiple fulfilment centres and compare this to Amazon's PICS offering.
It's also very important to negotiate the rate they have offered you, because there's always room for manoeuvre!
Next Steps
If you're considering PICS for your Vendor account or if you're already in the program and seeking to optimise your operations, get in touch with WAKE.
Our expertise in managing Amazon Vendor Central accounts, combined with our deep understanding of services like PICS, positions us perfectly to support your onboarding process and manage any complexities that arise.
Contact us today and take the first step towards a more streamlined, profitable Amazon operation.
