Amazon FBA vs FBM: Which is better for Amazon Sellers?
Introduction
Selling on Amazon can be a great way to get your products out there. But once someone buys your item, there’s the whole question of getting it to them. This is where fulfillment comes in.
There are two main options on Amazon: FBA (Fulfillment by Amazon) and FBM (Fulfilled by Merchant).
Think of them as two different ways to handle shipping and customer service for your Amazon sales. In this blog post, we will break down how they work, the pros and cons of each option, the costs associated with each, and more, so you can choose the best fit for your business.
What is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) is a service provided by Amazon that allows sellers to store their products in Amazon’s fulfillment centers. Amazon then takes responsibility for packing, shipping, and providing customer service for these products. When a customer orders a product, Amazon picks, packs, and ships it on behalf of the seller. This service also includes handling returns and refunds, managing customer inquiries, and providing access to Amazon’s customer service network.
What is Amazon FBM?
Amazon FBM, or Fulfillment by Merchant or Merchant Fulfilled Network, is a method of order fulfillment on the Amazon marketplace where the seller is responsible for storing, packing, and shipping their products directly to the customer. Unlike Amazon’s Fulfillment by Amazon (FBA) program, where Amazon handles the logistics and customer service on behalf of the seller, FBM requires the seller to manage these aspects themselves.
Sellers using FBM list their products on Amazon, and when an order is placed, they must ensure timely and accurate processing and shipping to meet Amazon’s performance standards. This includes maintaining adequate inventory levels, selecting appropriate packaging materials, and choosing reliable shipping carriers to deliver orders within the expected timeframe.
Additionally, FBM sellers are responsible for handling customer inquiries, returns, and any issues that arise during the shipping process.
Pros of Amazon FBA
Efficient Logistics
Amazon FBA simplifies the entire process for sellers. Instead of worrying about storing inventory, finding packaging materials, and shipping out each order, sellers send their products to Amazon’s warehouses. Once there, Amazon takes charge, handling everything from picking the right items for orders to carefully packing them and sending them off to customers. This saves sellers time and reduces the headaches associated with managing logistics independently. Amazon’s efficient system ensures that orders are processed quickly and accurately, leading to satisfied customers.
Prime Eligibility
A major perk of using Amazon FBA is that it often makes products eligible for Amazon Prime benefits. Prime members love getting their orders fast and for free. When sellers opt for FBA, their products can qualify for Prime shipping, attracting more Prime customers who are more likely to make purchases. This increased visibility can potentially lead to more sales for sellers. Being part of the Prime program opens up access to a vast pool of loyal and eager customers who value the convenience of fast shipping.
Customer Trust
When customers see that a product is fulfilled by Amazon, it automatically adds a layer of trust. Amazon has built a solid reputation for reliable and speedy shipping over the years. So, when buyers come across products with the “Fulfilled by Amazon” badge, they feel more confident about their purchase. This trust factor can significantly boost conversion rates because customers are more likely to complete their purchases without hesitation or second-guessing. Ultimately, the peace of mind that comes with knowing their orders will be handled by Amazon contributes to a positive buying experience.
Scalability
Another key advantage of Amazon FBA is its scalability. Whether a seller is just starting out or experiencing rapid growth, FBA can adapt to meet their needs. Sellers don’t have to worry about investing in additional warehouse space or hiring more staff to handle increased order volumes. Amazon’s robust infrastructure can handle fluctuations in demand seamlessly, ensuring that orders are fulfilled efficiently even during peak periods. This scalability gives sellers the confidence to grow their businesses without being held back by logistical constraints.
Customer Service
Amazon FBA doesn’t just take care of shipping; it also handles customer service. From dealing with returns to addressing any questions or concerns that buyers may have, Amazon’s dedicated support team is there to assist. This takes a significant burden off sellers’ shoulders, allowing them to focus on other aspects of their business. By outsourcing customer service to Amazon, sellers can ensure that their customers receive prompt and professional assistance, leading to higher satisfaction levels and repeat business. Ultimately, the comprehensive support provided by Amazon FBA contributes to a smoother and more enjoyable shopping experience for customers.
Higher Search Ranks
Products fulfilled by Amazon through FBA often receive a boost in search rankings on the platform. Amazon’s search algorithm tends to favor products that offer Prime shipping and those with high customer satisfaction ratings. Since FBA products typically meet both criteria, they’re more likely to appear higher in search results when customers are browsing or searching for items to buy. This increased visibility can lead to more clicks and ultimately more sales for sellers. Essentially, by using FBA, sellers can improve their products’ visibility and chances of being discovered by potential customers on Amazon’s platform.
Buy Box Advantages
The Buy Box is the section on an Amazon product page where customers can directly add an item to their cart. It’s highly sought after because most purchases on Amazon are made through the Buy Box. When a product is fulfilled by Amazon (FBA), it often gets a better chance of winning the Buy Box. This is because Amazon trusts its own fulfillment method to deliver orders reliably and quickly, making FBA products more likely to win the Buy Box over products fulfilled by merchants (FBM). When a seller’s product wins the Buy Box, it means that their product is displayed prominently on the product page, making it more likely to be chosen by customers. Winning the Buy Box can significantly increase a seller’s sales and visibility on Amazon.
Cons of Amazon FBA
Costs
While Amazon FBA offers convenience, it comes with a monthly inventory storage fee. Sellers must pay Amazon for storage space in their warehouses and for fulfillment fees for each order processed. These costs can eat into profit margins, especially for products with low-profit margins or slow turnover. Additionally, sellers may incur additional fees for services like labeling or removing inventory.
Lack of Control
When sellers opt for FBA, they relinquish some control over the fulfillment process. Amazon manages inventory, packaging, and shipping, which means sellers have less oversight and control compared to fulfilling orders themselves (FBM). This can be concerning for sellers who prefer to handle these aspects of their business directly or have specific packaging or branding requirements.
Long-Term Storage Fees
Amazon charges long-term storage fees for inventory that remains unsold in their warehouses for an extended period. This can be a significant expense for sellers with slow-moving or seasonal products. To avoid these fees, sellers must carefully manage their inventory levels and consider removing or discounting slow-selling items before incurring additional charges.
Restricted Access
Amazon’s FBA program has certain eligibility requirements and restrictions that may limit participation for some sellers. For example, sellers may need to meet specific performance metrics or adhere to Amazon’s product preparation and labeling guidelines. Additionally, certain product categories may be restricted or require approval for FBA participation, limiting opportunities for sellers in those niches.
Pros of Amazon FBM
Cost Control
With Amazon FBM, sellers have more control over their costs compared to FBA. Since sellers handle storage, packaging, and shipping themselves, they can potentially save on fulfillment fees charged by Amazon. This is particularly beneficial for sellers with tight profit margins or those who want to minimize expenses associated with fulfillment.
Flexibility
FBM offers sellers greater flexibility in managing their inventory and fulfillment processes. Sellers can choose their own storage facilities, packaging materials, shipping methods, and customer service. This flexibility allows them to tailor these aspects to their specific needs and preferences, enabling them to adapt quickly to changes in demand, seasonal fluctuations, or unique shipping requirements for certain products.
Brand Control
With FBM, sellers retain full control over their branding and customer experience. They can customize packaging, include personalized notes or promotional materials, and ensure that orders are packaged and presented exactly as they desire. This level of control allows sellers to reinforce their brand identity and build stronger connections with customers through personalized interactions.
Direct Customer Interaction
FBM enables sellers to interact directly with their customers throughout the fulfillment process. Sellers can communicate directly with buyers, address customer service inquiries or concerns promptly, and provide personalized customer service. This direct interaction fosters trust and loyalty, as customers appreciate the personalized attention and responsiveness from sellers.
Avoidance of Long-Term Storage Fees
Unlike Amazon FBA, which incurs long-term storage fees for inventory stored in Amazon’s warehouses for an extended period, FBM allows sellers to manage their inventory independently. This means sellers can avoid long-term storage fees by selling products more quickly or storing inventory in their own facilities or third-party warehouses.
Cons of Amazon FBM
Logistical Challenges
With Amazon FBM, sellers are responsible for storing inventory, packing orders, and arranging for shipping. This can be time-consuming and labor-intensive, especially for sellers managing large volumes of orders or operating without access to efficient logistics infrastructure. Sellers may also encounter difficulties in managing inventory levels and coordinating shipments, leading to potential delays or errors in order fulfillment.
Limited Prime Eligibility
Unlike FBA, where products are often eligible for Prime benefits such as free two-day shipping, FBM products may not qualify for Prime eligibility. This can put FBM sellers at a disadvantage, as Prime members tend to prioritize products with Prime shipping options. Without Prime eligibility, FBM sellers may struggle to attract and retain customers who value fast and free shipping, potentially impacting sales and competitiveness on the platform.
Customer Trust and Satisfaction
FBM sellers may face challenges in building and maintaining customer trust and satisfaction compared to FBA sellers. Customers may perceive FBM orders as less reliable or professional due to longer shipping times, inconsistent packaging, or lower perceived quality of service. Additionally, FBM sellers may struggle to provide customer service at the same level and convenience as FBA sellers, leading to lower customer satisfaction and potential negative feedback.
Increased Workload
Managing fulfillment operations independently can significantly increase the workload for FBM sellers. From handling inventory management and packaging to arranging shipping and managing customer inquiries, FBM sellers must juggle multiple tasks simultaneously. This can be overwhelming, especially for small or inexperienced sellers who may lack the resources or expertise to efficiently manage these responsibilities.
Risk of Seasonal Fluctuations
FBM sellers may be more susceptible to seasonal fluctuations in demand and shipping volumes compared to FBA sellers. During peak seasons or periods of high demand, FBM sellers may struggle to keep up with order volumes and ensure timely delivery to customers. Conversely, during slower periods, FBM sellers may face challenges in managing excess inventory and minimizing storage costs.
Choosing Between FBA and FBM: Which is Right for You?
The best fulfillment method for your Amazon business depends on your specific needs. Here’s a breakdown of when FBA (Fulfillment by Amazon) and FBM (Fulfilled by Merchant) might be the better choice:
FBA is ideal for:
High-volume sellers: If you sell a lot, FBA handles the logistics, letting you focus on growth.
Sellers who want to outsource: FBA takes care of packing, shipping, and customer service, freeing up your time.
New sellers: No need to set up your own shipping – Amazon’s network takes care of it all.
Sellers with limited space: Store your products in Amazon warehouses and avoid storage costs.
Sellers with standard-sized products: FBA is cost-effective for items that fit Amazon’s size and weight tiers.
Sellers comfortable with FBA fees: The convenience of FBA comes with storage and fulfillment costs.
FBM is a good option for:
Sellers with slow-selling products: Avoid FBA storage fees for items that don’t sell quickly.
Experienced logistics managers: If you already have a shipping system in place, you can potentially save money with FBM.
Sellers with existing shipping partners: Leverage your existing relationships for potentially better rates.
Sellers with storage space: Manage your inventory in your own warehouse and avoid Amazon storage fees.
Sellers with non-standard sized products: FBM is more flexible for unique or oversized items that may incur high FBA fees.
Sellers focused on profit margins: Avoid FBA fees and potentially increase your profit margins with FBM.
Can Amazon sellers use both FBA and FBM fulfillment methods?
Yes, absolutely! Amazon sellers can leverage both FBA and FBM fulfillment methods for their products. There are two main ways to do this:
Using FBA and FBM for different products: You can choose to fulfill different products through FBA and FBM depending on what makes the most sense for each item. For example, you might use FBA for your fast-selling, standard-sized products and FBM for your bulkier, slower-selling items.
Using both FBA and FBM for the same product: This is done by creating two listings under the same product ID (ASIN). One listing would be set up for FBA fulfillment, and the other would be set up for FBM fulfillment. This can be useful for ensuring you never run out of stock on your product listing, even if your FBA inventory runs low.
What is Amazon Seller Fulfilled Prime?
Amazon Seller Fulfilled Prime (SFP) is a program designed for sellers on Amazon who want to offer Prime benefits (like fast and free shipping) to customers, but handle the fulfillment themselves. In simpler terms, you get to store and ship products from your own warehouse, but still display the Prime badge on your listings.
Requirements:
Strict performance standards: Maintain high on-time delivery rates (over 93.5%), valid tracking rates (over 99%), and low cancellation rates.
Fast shipping speeds: Offer one-day or two-day shipping to Prime customers.
Fulfillment options: You can fulfill orders from your own warehouse or use a third-party logistics (3PL) service.
Conclusion
In conclusion, whether you opt for FBA or FBM depends on what matters most to your business: convenience, control, or cost savings. FBA offers a streamlined process with Prime benefits and trusted fulfillment, but it comes with higher fees. On the other hand, FBM gives you more control and potential cost savings but requires more effort and may lack Prime eligibility.
By weighing these factors against your business priorities, you can make an informed decision that sets you up for success on the Amazon platform.
Turning your bookshelf into a source of income has never been easier, thanks to Amazon. If you have books collecting […]
If you’re an Amazon seller, encountering an account suspension or policy violation can be a significant setback. But with the […]
Introduction Amazon dropshipping is an increasingly popular way to run an e-commerce business without the need to store or ship […]
Introduction The Amazon Influencer Program is a great way for content creators to turn their influence into earnings. This program […]
Introduction Amazon Kindle Direct Publishing (KDP) is a platform that allows authors to self-publish their work as ebooks or print […]
Selling on Amazon offers many opportunities for businesses, but it’s essential to understand the costs involved with Fulfillment by Amazon […]
Walmart is quickly becoming a popular platform for brands and sellers to connect with more customers. One way to boost […]
In today’s competitive retail landscape, reaching the right audience at the right time is crucial for success. Walmart’s Demand Side […]
In today’s fast-paced eCommerce landscape, shoppers demand speedy delivery. Walmart has responded by offering 2-day shipping, giving sellers on the […]
Running successful Walmart advertising campaigns takes more than just setting them up—it requires ongoing optimization. A Walmart PPC (Pay-Per-Click) audit […]
Are you ready to tap into the massive potential of Walmart Marketplace? With millions of daily visitors and a loyal […]
In the world of e-commerce, Amazon and Walmart reign supreme, dominating the retail landscape. These two giants offer vast opportunities […]
Are you a brand owner struggling to maintain control over your products on Walmart? The Walmart Brand Portal is here […]
Are you dreaming of a passive income stream from your Walmart store? The allure of an automated Walmart store with […]
Are you a seller looking to tap into the massive market of private-label brands? Walmart, one of the world’s largest […]
Tired of your Walmart products getting lost in the shuffle? In this blog post, we’ll dive into the essential strategies […]
Ever wondered why some Amazon sellers seem to have a magic touch with product bundles? It’s not luck—it’s strategy. Bundling […]
If you’re a Walmart seller looking to grow your business through retail media, Walmart Connect could be a game-changer. But […]
If you’re an Amazon seller, you may have noticed a portion of your inventory marked as “reserved” without knowing exactly […]
Have you ever wondered what managing your own Amazon orders is like? Switching from Fulfilled by Amazon (FBA) to Fulfilled […]
Walmart Marketplace offers an exciting opportunity for sellers to reach a vast audience by listing their products on Walmart’s platform. […]
Selling products on online marketplaces has become a vital strategy for businesses to reach more customers. If you’re looking to […]
Are you a Walmart seller aiming to improve your visibility and sales? In this blog, we will explore Walmart SEO, […]
As an Amazon brand owner, maintaining control over your product listings is essential to protect your brand’s reputation and customer […]
Introduction​ Tired of losing out on Walmart sales to competitors? Want to know the secret to consistently winning the Buy […]
Are you an Amazon seller struggling to increase your rating? A high seller rating is crucial for attracting new customers […]
As an Amazon seller, providing the best customer service is paramount to maintaining a positive customer experience. One key metric […]
Are you an Amazon seller wondering what the IPI score is and how it affects your business? Look no further! […]
Introduction Starting an Amazon subscription box business presents a unique opportunity to tap into the growing trend of curated, recurring […]
Thinking about using Fulfillment by Amazon (FBA) to sell on the Amazon marketplace? Awesome! But before you box up your […]
Thinking about using Fulfillment by Amazon (FBA) to streamline your Amazon business? While FBA offers a convenient way to store […]
For FBA sellers, the Amazon Buy Box is the holy grail of product visibility. But with constant algorithm updates and […]
Have you ever wished you could offer customers pre-made packages of complementary products without the hassle of physically bundling them […]
Have you ever wanted to create a more branded and engaging presence for your products on Amazon? An Amazon storefront […]
Are you storing items on Amazon for a while? If so, it’s important to be aware of Amazon’s long-term storage […]
When selling products on Amazon, it is crucial to follow their packaging requirements, rules, and guidelines. Proper packaging ensures that […]
A/B testing on Amazon can significantly enhance your product listings and boost sales. This method, also known as split testing, […]
Have you ever browsed Amazon and stumbled upon a product with a little blue badge that reads “Amazon’s Choice”? It […]
Introduction Selling on Amazon can be a great way to get your products out there. But once someone buys your […]
Ever feel like you’re missing something in your Amazon PPC Search Terms report? You might be! Sure, they show what […]
Amazon can be a fantastic platform to reach new customers, but keeping your virtual shelves stocked can get tricky. That’s […]
Navigating Amazon as a new seller can be tough, but there are tools and programs available to help. Amazon’s Launchpad […]
Have you ever scrolled through an Amazon search result page and noticed product recommendations nestled alongside the standard listings? These […]
Finding time for yourself while selling on a competitive marketplace like Amazon can be challenging. As a seller, your main […]
Starting an E-commerce business has become quite easy with Amazon, but it also brings heavy competition. Millions of Amazon sellers […]
As an Amazon seller, you know the importance of getting your products seen. But with millions of listings, how do […]
Ever scrutinized an Amazon product page and noticed the cryptic “Sales Rank”? Wondering what it means and how it impacts […]
Millions of products compete for customer attention on Amazon’s search results page, making it tough for your brand to stand […]
Are you selling products on Amazon and looking to increase your sales? This blog is for you. We’ll share tips […]
Are you an Amazon seller looking to boost your brand visibility and profitability? Are you feeling stuck in the cycle […]
Ever wonder what drives your online shopping habits? Perhaps a captivating product description, or an eye-catching professional photo? As it […]
For any seller on Amazon, understanding the A9 algorithm is crucial for success. This complex algorithm dictates which products appear […]
Are you an Amazon seller looking to turn those single purchases into recurring revenue? Look no further than the Subscribe […]
Amazon has become a go-to platform for all e-commerce business owners to launch and scale their e-commerce brands online. But […]
Mother’s Day, a time to celebrate the incredible women who raised us, is a prime opportunity for Amazon sellers to […]
In the ever-competitive landscape of Amazon, ranking high in organic search results is crucial for driving sales. While you might […]
If you’ve ever found yourself scratching your head over Sessions and Pageviews on your Amazon business reports, you’re not alone. At […]
Amazon is a massive marketplace, attracting millions of customers with diverse needs, preferences, budgets, and mindsets for shopping. To effectively […]
With Amazon boasting over $575 billion in retail sales for 2023, it’s no wonder so many sellers flock to its […]
Advertising on Amazon through pay-per-click campaigns can significantly enhance product visibility and sales for sellers. However, mastering Amazon PPC, with […]
Have you heard of the terms copyright infringement and plagiarism? If so, then Amazon Brand gating won’t be unfamiliar to […]
If you are running ads on Amazon, you’ll come across a sea of data in your advertising console. But does […]
Have you heard of the terms copyright infringement and plagiarism? If so, then Amazon Brand gating won’t be unfamiliar to […]
In the fast-paced world of e-commerce, where shoppers are bombarded with choices, standing out on platforms like Amazon is paramount […]
Are you planning to start an Amazon FBA store? If so, you’ll encounter a unique term – FNSKU. This seemingly […]
Introduction As an Amazon seller, you understand the power of reviews. They’re the lifeblood of trust and conversion on the […]
Are you struggling to get Amazon reviews on your product? Well, you are not alone! Reviews are the backbone of […]
Are you tired of bland Amazon product listings failing to grab attention? In today’s competitive online marketplace, standing out is […]
As an Amazon seller, understanding how your brand performs throughout the customer journey is vital for success. However, until recently, […]
As an Amazon seller, optimizing your business and maximizing profits relies heavily on data analysis. One invaluable tool for gaining […]
Are you struggling to get noticed on Amazon’s massive platform? Do your products get lost in a sea of similar […]
For any Amazon seller getting into the world of sponsored advertising, understanding the Advertising Cost of Sale (ACoS) is crucial. […]
A well-executed product launch on Amazon can be the key to unlocking success and gaining a competitive edge. As the […]
In the ever-evolving landscape of e-commerce, distinguishing between keywords and search terms is vital for optimizing product visibility and driving […]
Ever felt like you are throwing darts in the dark when it comes to your marketing efforts outside Amazon for […]
Amazon, the e-commerce giant, has successfully concluded a robust business year with outstanding performance in quarter 4. The most recent […]
Picture this: you have a great product on Amazon, but it’s not selling well despite having attractive images and a […]
The advertising landscape is evolving, and viewers are rapidly migrating from traditional cable TV to streaming platforms. This presents a […]
Feeling lost in the Amazon discount jungle? Struggling to reach the right customers and entice them to make the purchase? […]
Are you losing your product in the deep ocean of Amazon product listings? Want your product to stand out, rank […]
For years, Amazon sellers were in the dark. They couldn’t see what keywords customers were using to find their products, […]
Selling on Amazon can be tough with so many others doing the same in your category. That’s why it’s super […]
For Amazon sellers, understanding their customers has often felt like navigating a maze without a map. The missing link? A […]
Have you ever felt like your Amazon advertising campaigns are lost in a tangled jungle of keywords? You’re not alone. […]
When did you last give your Amazon PPC account a checkup? Regular Amazon PPC audits are crucial to ensure the […]
Embarking on the path of online selling? If so, you’re likely aware that Amazon is your ultimate destination. With a […]
Ever felt like your product is lost in the vast Amazon jungle? You’re not alone. With millions of shoppers actively […]
Amazon Sellers selling on the Amazon marketplace usually utilize Amazon advertising without keeping a close eye on the TACoS metric. […]
The rush of Black Friday and Cyber Monday might be over, but the opportunity for continued sales growth extends beyond […]
In the fierce Amazon advertising domain, where competition rises and costs increase, understanding and keeping track of the right metrics […]
Have you ever felt the frustration of campaigns going out of budget, leading to missing out on potential sales, or, […]
Amazon PPC campaigns can be a powerful tool for driving traffic and sales to your products. However, without proper structure, they […]
Whether you are creating a new advertising campaign or optimizing existing ones, doing it manually from the Amazon ad console […]
Want to know what search terms people use to visit or purchase your product on Amazon? If yes, you’re in […]
When you are spending dollars or even more to get a click on your Amazon ads, you want to ensure […]
Are you an Amazon seller looking to maximize your profits and minimize your advertising costs? If so, you’re not alone. Many […]
Are you exclusively relying on traditional metrics such as CTR, CPC, CVR, or ROAS to make your campaign optimization decisions? […]
Navigating the ever-evolving landscape of Amazon’s online marketplace is essential for any seller looking to thrive on the platform. Among […]
As the holiday season approaches, businesses are gearing up for the highly anticipated Q4 rush. To ensure a successful Q4, […]
Do you regularly review your Amazon advertising reports? If not, you may be missing out on numerous opportunities. Amazon […]
Whether you’ve just launched a new product or have been selling on Amazon for a while, advertising on the platform […]
Amazon PPCÂ bidding strategies that you choose play a significant role in the success of your Amazon Ads campaigns. As […]
Have you ever heard of a “catch-all campaign”? This single campaign can generate extra sales for you at a very […]
Amazon Prime Day is one of the largest global e-commerce sales events, attracting millions of customers worldwide. But how do […]
Are you looking to boost your brand’s visibility and drive more sales on Amazon? Look no further than Amazon Sponsored […]
Succeeding on Amazon in 2023 isn’t easy. Just listing your products and hoping for the best won’t work anymore. You […]
Are you bidding the same amount for all your ad placements on Amazon? If yes, then you’re missing out on […]
Whether you are looking to boost product discovery or target audiences further down the sales funnel who have already engaged […]
We, at Adbrew catalyze millions of dollars of ad spend monthly through our platform, with Sponsored Product Ads being the […]
Do you want to know how many clicks you should give a search term before adding it as negative in […]
Think of your product listing as a guiding light on the Amazon marketplace. It’s your chance to grab attention, tell […]
It is no longer a secret that shopping behavior on Amazon varies over the day. This is the reason why […]
Are you struggling to get the most out of your advertising budget on Amazon? Do you find that your campaigns […]
Ever run an Amazon Ad campaign and wondered why some sales weren’t directly linked to the products you advertised? That’s […]
If you’re managing Amazon PPC ads, it’s essential to have an effective and organized approach for target harvesting and movement. […]