Almost every Amazon seller is confused about which option to go for; FBA or FBM? There is no one-word answer for this though. Choosing the best fulfillment method for your business can only be done by comparing the pros, and analyzing your business situation. Here are a few advantages of Amazon FBA vs. FBM to help you decide which works best for your brand.
FBA- Fulfillment by Amazon
With the help of FBA, you can store all your inventory in Amazon’s warehouses, and Amazon is responsible for packing and delivering your products to customers. Moreover, Amazon is also in charge of handling your returns and refunds. Amazon FBA allows sellers to expand their customer base and grow their business in less time. Amazon receives all the goods from sellers and stores them while processing all the orders they get. Marketing of the product and sales are still handled by sellers. As a result, everything else happens automatically if you choose Amazon to store your items.
Fulfillment by Merchant (FBM)- How is it different from FBA?
FBA is when you choose to sell something and Amazon is responsible to ship it to your customers. Sellers transport large quantities of goods to Amazon’s warehouses, where Amazon will store, pack, and deliver orders as they are sold. Amazon FBA allows sellers to outsource order fulfillment and offer free two-day shipping for Amazon Prime members.
FBM however, is “Fulfillment by Merchant”, meaning that the seller fulfills orders on their own, while also handling storage, packaging, and shipping. Also, sellers are required to take care of refunds and returns.
Advantages of FBM:
· Control over the activities: You are in charge of storing your products, packing them, and also shipping them. You can check your inventory anytime and do things your way.
· Costs are decreased: Amazon’s FBA fees are according to the size and weight of the product. If you sell large products with a minimum profit margin then FBA won’t be a feasible option for your business.
· Offering products to prime members: SFP (Seller Fulfilled Prime) now allows sellers on Amazon to offer their products to Amazon Prime members without paying the fulfillment fees or storage fees of Amazon.
· Lower shipping costs: Sellers can avail discounts and get good deals from other shipping companies that can help lower costs.
Advantages of FBA:
· Sell on Amazon Prime: You can sell your products to Prime members once you sign up with FBA.
· Ease of shipping: You don’t have to do anything except get orders. The rest is managed by Amazon. Amazon keeps a check on your inventory and ensures that you always have high stock levels. Moreover, it makes sure your items are packed and shipped properly.
· Low shipping costs: Amazon also has other shipping companies under its umbrella apart from its network. You can pick and choose which option is the best for you.
· Fast shipping: The main advantage of FBA is the fast delivery that it can provide for your customers. Moreover, since your products already have a Prime badge, they are eligible for free shipping.
· Management of refunds and returns: FBA is responsible for handling your refunds as well as your returns. You won’t have to deal with all the chaos. If a customer wants to return a product, Amazon will deal with the issue.
· Warehousing issue: Amazon seller can quit worrying about the storage problem. They can transfer all their products to the fulfillment centers of Amazon that have plenty of storage space.
· Customer service: Amazon’s customer service is the best of all, plus it’s 24/7. FBA sellers can discuss their issues easily with Amazon.
· Winning the Buy Box: Every seller knows the importance of Buy Box on Amazon. It drives approximately 80% of the entire sales on Amazon. With FBA, you get Buy Box eligible and your chances of winning the Buy Box are also higher.
In conclusion,
There are several factors you must keep in mind before choosing whether FBA is good for your business or FBM. The above-mentioned factors can help you figure out which one can help you grow faster on Amazon. Make sure to invest enough time in research before finalizing your option.