When it comes to selling on platforms like Amazon, choosing Fulfilment by Amazon (FBA) and Fulfilment by Merchant (FBM) significantly impacts your business. In this blog, we will explore the differences between FBA & FBM to help you understand which option best aligns with your business model.
Fulfilment by Amazon (FBA)
Fulfilment by Amazon is a service provided by Amazon that provides storage, packaging & shipping assistance to sellers. With this service, sellers can send their items to Amazon storage centres until sold. After the order is placed, Amazon staff handles the packaging as well as the shipping of the products.
Let’s go over the top three factors to consider while thinking about using FBA for fulfilling the products on Amazon.
- Convenience
FBA offers convenience to sellers by managing the labor-intensive responsibilities of order fulfilment. This means that businesses can focus on other aspects of their operations, such as marketing, product development, and customer service, while Amazon handles the logistics aspect of order fulfilment.
- Increased Customer Trust
Amazon, a trusted brand and one of the largest e-commerce platforms in the world, can boost customer confidence in your business’s products. Using a service by Amazon, such as FBA, enables firms to leverage its reputation and resources to build trust with customers.
- Fees
Fulfilment by Amazon (FBA) may be more cost-effective as compared to internal logistics management. Charges of FBA may fluctuate depending on the weight of the product, size & storage duration. Thus, the affordability of FBA allows sellers to avoid the costs associated with managing their fulfilment operations, such as hiring staff, purchasing equipment, and dealing with customer inquiries.
Fulfilment by Merchant (FBM)
Fulfilment by Merchant (FBM) is when sellers choose to list their products on Amazon but personally handle the shipping process for each buyer. In FBM, sellers independently manage packaging, shipping, and customer service without depending on Amazon for assistance.
Let’s go through a few benefits of selecting FBM as your primary tool for managing logistics.
- Inventory Authority
Fulfilment by Merchant (FBM) gives the seller control over the inventory and fulfilment process, allowing them to customise packaging, shipping, and handling of returns ensuring accurate order processing. FBM is an ideal choice for startups with limited inventory or resources.
- Cost Efficiency
Fulfilment by Merchant (FBM) is an economical option for sellers who have just started their business. FBM avoids the upfront costs associated with using FBA. In essence, sellers can save on expenses by directly managing their fulfilment processes and shipping arrangements under FBM.
- Flexibility in Product Management
FBM offers flexibility in handling unique, oversized, or temperature-sensitive products, allowing you to maintain specific storage and shipping requirements. This may not be possible with Amazon’s FBA as it could incur higher costs.
Overview:
Deciding between FBA and FBM involves evaluating various factors to determine the most suitable option for your e-commerce business.
FBA provides ease in operations and boosts customer trust, making it ideal for sellers aiming for straightforward transactions. Whereas, (FBM) offers lower cost options and flexibility over fulfilment processes requiring sellers to manage shipping independently.
Finally, the choice depends on your business size, product type, order volume, budget, and long-term goals. By carefully considering these factors, you can select the option that best aligns with your requirements.
If you need more information regarding your logistic management requirements, please feel free to consult with the United Prep representative at +1(647)910-8110.
