Are you looking for the best option for your business? At present, there are two programs: “FBA” (Fulfilled by Amazon) and “FBM” (Fulfilled by Merchant).
Between Amazon FBA and FBM?
Amazon has the potential to grow your business in no time since millions of people visit with higher purchase intent than elsewhere on the web.
Whether FBA or FBM is the best option for your business, when you first register as a seller on Amazon, you can set up your account as an FBA, FBM, or by-product. At the same time, you can change it at any time.
What is the difference between Amazon FBA and FBM?
Amazon’s Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) business models differ significantly. Which one is right for you will depend on the size of your business, the items in your catalog, and your individual goals and strategies.
With FBA, you store your products in Amazon’s fulfillment centers. Amazon selects, packages, ships, and provides customer service for those products. An FBA business model can be beneficial for sellers who hope to develop a private label with or without an exit strategy and reach more customers quickly.
You can read more about What Amazon FBA is in our previous blog post.
With “Fulfilled by merchant” (FBM), you choose to ship your items to each customer via your logistics and operational resources. Your products are stored in your warehouse rather than Amazon’s fulfillment centers.
FBM can be valid for specific items, such as bulky or heavy items, or are sold in small volumes, such as mattresses.
Benefits of Amazon FBM
As an FBM seller, one of its main advantages is having better control over your shipping rates.
Some FBM advantages:
- Have no storage volume limits
- Can build better brand relations with your customers
- Have control over storage, handling, and fulfillment costs
Benefits of Amazon FBA
When it comes to Amazon FBA, one of its main advantages is that sellers send the inventory to an Amazon warehouse. When an order is placed for their item, Amazon automatically fulfills it, covering customer service and returns related to that order.
Some FBA advantages:
- Higher conversion rate on your listings
- Access to Amazon prime customers
- Effortless shipping
- Fast delivery
- Returns management
- Customer Service Management
So, after all this information, what is the best option between FBA and FBM for your business?
The best option depends on your business and strategy.
Due to its pricing structure, “Shipped by” Amazon (FBA) is best suited for small, lightweight products that sell quickly in high volumes.
It may also be suitable for businesses that cannot efficiently store, handle, ship, and provide customer service. Amazon will take care of all of this while you invest time in other areas, such as marketing and e-commerce procurement.
Keep in mind that seller ratings are critical to success on Amazon Marketplace. If you can’t effectively deliver these services on your own, go for FBA.
Amazon FBM is best for large, heavy items (over 20 lbs) with small margins. It is also recommended for unique or exclusive products. FBM will also avoid Amazon’s storage fees if inventory turnover is slow.
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