Amazon FBA vs FBM
FBA is Fulfillment by Amazon, and FBM is Fulfillment by Merchant.
All entrepreneurs start their Amazon business to increase sales and improve the bottom line. But, the problem is whether the best way for your business is Fulfillment By Amazon (FBA) or Fulfillment By Merchant (FBM). You can only set up your company account as an FBA or FBM while registering as an Amazon seller. You can only set up your company account as an FBA or FBM while registering as an Amazon seller.
But, most sellers are unaware of this because they can register their accounts for FBA and FBM, which can double the chances of visibility and sales.
The key to remember while looking for FBA vs. FBM is that Amazon businesses are not single-sized businesses that fit all equally, so the fulfillment methods can also vary. Your selection should be according to terms of your business goals and needs.
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Here is a quick comparison chart that offers a detailed overview of Amazon sellers working on choosing between FBA or FBM.
| FBA Is Ideal IF | FBM Is Ideal IF |
| 1. Seller items have fast turnovers. | 1. Seller items don’t have fast turnovers. |
| 2. Items are small, lightweight, and expensive. | 2. Items are big, heavy, and inexpensive. |
| 3. You accept commingling. | 3. Commingling might be risky for you |
| 4. You do not have enough manpower to fulfil this efficiently. | 4. You have enough manpower and storage. |
Now let’s have a brief discussion
What Is Amazon FBA
FBA- (Fulfillment By Amazon)
Fulfillment by Amazon FBA is simply using services provided by the Amazon fulfillment program to the seller rather than his resources. FBA fulfillment allows sellers to ship their products to Amazon warehouses, where similar items are stored until they sell.
FBA is Better For-
- High-volume sellers.
- Retailers are ready to drop the cost to the lowest possible profit point.
Advantages to FBA-
- Almost every FBA Seller gets the Buy Box, which is ideal for any product.
- Amazon takes care of customer service and product shipping.
- High lead generation ratio because people trust Amazon to take care of them.
- They store your inventory and pick it up from their warehouses.
- Retail operation open 24/7 Service.
- Large target audience.
- Super Saver and Amazon Prime Membership shipping benefits.
- Simplified returns process.
- It provides extra time to grow the business.
- Best for retailers selling large, heavy, or low-priced goods where packaging is labour-intensive and independent shipping costs may be prohibitive.
What Is Amazon FBM
FBM- (Fulfillment By Merchant)
Fulfillment By Merchant (FBM) is when the seller has self-control over the entire storage and shipping process. Rather than paying Amazon a service fee and sending inventory to manage, the seller uses their money and delivers the goods directly to the customer.
FBM is Better For:
- Exclusive and small volume sellers.
- Sellers who want to use Seller Fulfilled Prime (SFP).
Advantages to FBM-
- The seller maintains self-control over the business.
- Margins are high.
- Easy to build an independent brand.
- Less non-predicted losses due to changes in Amazon policies.
- Less paperwork, particularly when dealing with non-sales-tax states.
- Freedom to run the business according to the seller.
- More control over the product inventory.
- No unexpected costs.
- Easier to maintain both online and offline retail activity.
FBA vs FBM: A Full Comparison (Pros & Cons) for Amazon Sellers
Check out FBA vs FBM pros and cons for quick analysis of them.
Fulfillment By Amazon( FBA) v/s Fulfillment By Merchant( FBM) or FBA vs FBM
FBA- Fulfillment By Amazon
| Pros | Cons |
| 1. Prime Eligibility. | 1. Additional Charges. |
| 2. Hands-Off Fulfillment. | 2. Limited Access to Inventory. |
| 3. Buy Box Advantage. | 3. Quality Compromise. |
| 4. Multichannel Fulfillment. | 4. Pricey-Multichannel Fulfillment. |
| 5. Low Shipping Rates. | 5. Tax Obligations. |
FBM- Fulfillment By Merchant
| Pros | Cons |
| 1. Prime Opportunity. | 1. More Responsibility. |
| 2. Hands-On Fulfillment. | 2. Not Automatically Prime Eligible. |
| 3. Less Amazon Charges. | 3. Overhead Cost. |
| 4. High Margin. | 4. Lower Conversion. |
| 5. No Unexpected Costs. | 5. Elusive Buy Box. |
How an FBA Business Model Differs From FBM
If you prefer (FBA) Amazon’s fulfilment services, then the company picks, packs, and ships your goods with Delivery through Amazon and provides customer support for those goods. An FBA business model can benefit sellers who are consistently looking to grow an expanding Amazon startup quickly and attract more customers. With FBA, seller products are eligible for free two-day Amazon Prime shipping, and all Amazon customers can get free delivery on qualifying orders.
In the case of merchant-fulfilled operations, sellers have two options: Fulfillment by Merchant (FBM) or Seller Fulfilled Prime (SFP). With Fulfillment by Merchant, the seller accepts to pick, pack and ship goods to each customer via logistics and operational processes. Sellers store goods in their warehouse (or a warehouse of a third-party company) instead of at Amazon’s fulfilment centres.
Which Option Is Best for You (FBA or FBM)?
There are several factors to consider when deciding between FBA and FBM, such as whether to choose Amazon Fulfillment, Merchant Fulfillment, or a combination of the two. You can select Amazon SFP (Seller Fulfilled Prime) for your company; this is, again, a good option. You should analyze your business’s size and potential for improvement, the product segments you sell, and what aspects of your business you want to invest in.
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FBA or FBM: Choice Is Yours
FBA is best for high-volume products with high margins. FBA fulfillment is for sellers ready/willing to drop the selling price to the lowest possible profit point.
FBM is best for small-scale, small-margin, or one-offs. FBM Fulfilled allows sellers to take control of the fulfillment process without cutting their margins.
There is no particular scale to measure regarding Amazon FBA Tools and FBM; Now, it depends on your business goals and needs. Still, If you are unsure which fulfilment process suits you best, check out an Amazon Seller Coach; they will assist you throughout the process at no cost.
So, what are you waiting for? Start planning about selling on Amazon. If you are worried about finding the best products to sell, refer to our best Amazon FBA product research service.
