Amazon FBA vs FBM: Choosing the Best Fulfillment Solution for Your Amazon Business

As an online seller, choosing between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) can be a tough decision. Both options have their own advantages and disadvantages, and making the right choice is essential to the success of your business. In this article, we will discuss the differences between Amazon FBA and FBM and help you determine which one is best suited for your needs.

Fulfillment by Amazon (FBA)

Fulfillment by Amazon (FBA) is a service that enables you to keep your products in Amazon’s storage facilities. When a customer places an order, Amazon takes care of the shipping, handling, customer service, and returns. As a seller, you pay fees to Amazon in exchange for their storage and fulfillment services.

Advantages of FBA

• Storage, packing, and shipping are handled by Amazon.
• Amazon provides customer service and handles returns.
• Amazon Prime is available for FBA products, which may increase sales.
• FBA products are eligible for the Amazon Buy Box, which can increase visibility and sales.

Disadvantages of FBA

• FBA fees can be higher than FBM fees, especially for larger items
• You may need to send more inventory to Amazon’s warehouses than you would like, tying up capital
• FBA can be more complicated to set up and manage than FBM

Fulfillment by Merchant (FBM)

Fulfillment by Merchant (FBM) means you are responsible for storing, packing, and shipping your products to customers. You also handle customer service and returns. This option can be more cost-effective for smaller sellers or those with unique products that are not suited for Amazon’s warehouses.

Advantages of FBM

• You have more control over the fulfillment process
• You can save money on storage and fulfillment fees
• You can use your own packaging and branding
• You can ship products that may not be suitable for Amazon’s warehouses

Disadvantages of FBM

• You are responsible for storage, packing, and shipping
• You are responsible for customer service and returns
• FBM products may not be eligible for Amazon Prime, which could decrease sales
• FBM products may not be eligible for the Amazon Buy Box, which could decrease visibility and sales

Factors to Consider When Choosing Between FBA and FBM

Product Type

Amazon FBA is a better option for products that have high sales volume, are small and lightweight, and are eligible for Amazon’s warehouses. FBM is a better option for sellers with unique products, custom packaging, or oversized products.

Sales Volume

Sellers with high sales volumes could think about Amazon FBA, whilst those with low to medium sales volumes could consider FBM.

Storage Capacity

Sellers with limited storage capacity can benefit from Amazon FBA, as they do not have to store inventory in their own facilities. FBM is a good option for sellers with ample storage space and the ability to handle their own inventory.

Fulfillment Costs

Amazon FBA can be more expensive than FBM, but it comes with additional benefits such as access to Prime customers and automatic inventory management. FBM may be a more cost-effective option for sellers with low to medium sales volume.

Customer Service

Amazon FBA takes care of customer service and returns on behalf of the seller. FBM requires the seller to handle all customer service and returns.

Wrap-up

Both FBA and FBM offer advantages as well as disadvantages, so it’s crucial to carefully consider your options to choose which is ideal for your company. You can decide which choice to select by comprehending the distinctions between the two solutions and assessing the particular requirements and objectives of your business. When making your choice, keep in mind to take into account elements like order volume, product kind, control, and cost. In the end, the fulfillment option you select can significantly affect the success of your business, so carefully consider your options before making a choice.