Amazon is the world’s largest e-commerce website. You can reach a vast number of potential customers by listing and selling your items on such an online marketplace. Amazon provides merchants the option of handling order fulfillment themselves or let Amazon do it for them using the best Amazon sales tracker.
Amazon has over 2.5 million active sellers, with over 3,000 new vendors joining every day. Statista calculated that Amazon’s net revenues in 2020 were roughly $390 billion. Sellers on Amazon can employ a mix of fulfillment methods like FBM, FBA, or SFP to fulfill their orders.
Amazon FBA vs. FBM
FBA (Fulfilled by Amazon) is Amazon’s distribution and fulfillment service, enabling sellers to transfer products to an Amazon warehouse and dispatch their orders. FBM (Fulfilled by Merchant) is a fulfillment technique where the seller is solely responsible for inventory storage and order fulfillment.
Amazon charges a monthly inventory storage premium and a fulfillment cost when using FBA. As an FBM user, you have the option of either storing and shipping things yourself or outsourcing fulfillment to a 3rd party (that is not Amazon).
If you don’t know the advantages and disadvantages of each program, making a decision might be challenging. We’ll try our best to clarify FBA vs. FBM in this post so that you can select the fulfillment method that’s perfect for your company.
Pros and Cons of Amazon FBA
Amazon FBA allows sellers to ship their products to an Amazon warehouse, and when an order is created on Amazon, Amazon fulfills the order. Customer support and refunds will also be taken care of by Amazon.
Pros of FBA
Prime Shipping – Prime delivery is available on orders fulfilled via FBA. Customers who subscribe to Amazon Prime will be able to get their item in two days at no additional charge. Because Prime members are eager to take advantage of quick delivery times, this boosts your products’ sales potential.
Amazon SEO – The A9 search algorithm used by Amazon is a closely guarded secret, according to the company. FBA is widely accepted as a ranking element in Amazon’s search algorithm, despite the company’s refusal to acknowledge this openly. All other things being equal, FBA offers are likely to outrank FBM offers when it comes to search results.
Customer Care – As previously indicated, Amazon handles all aspects of customer care and returns processing for orders fulfilled through FBA. Even though you won’t be able to interact with your clients face-to-face, it will reduce the burden on online retailers.
Cons of FBA
Costs – Based on what you sell and how well you can fulfill orders, you might have an advantage or drawback. Larger, bulkier, and slower-moving products are more expensive to ship through the FBA program.
Loss of Control – You can’t check your items on the warehouse floor using FBA. And it’s pretty doubtful that Amazon will allow you to see their facilities on your own. You have to put your faith in Amazon to ensure that your merchandise is safe and secure.
The Requirements for Packing and Labeling – Before products could be accepted into Amazon warehouses, they must meet stringent packing and labeling criteria. Your inbound shipment may be rejected if your merchandise is not adequately prepared to fulfill these standards.
Pros and Cons of Amazon FBM
This approach allows you to store and ship your products, or you may contract with a third-party fulfillment service to do it for you. When it comes to shipping and order fulfillment, the seller is ultimately accountable.
Pros of FBM
Access Amazon’s Consumers for Less Money – There is a significant difference between the Amazon FBA fees and the FBM fees. With FBM, merchants generally pay a monthly membership fee, a nominal cost for each order, and an affiliate fee.
Avoid Amazon’s FBA rules – In the past, Amazon has been known to alter FBA rules without providing merchants adequate time to respond. Merchants who use Amazon’s fulfillment service may find it challenging to meet these standards. FBM has fewer limitations and penalties for orders that do not meet their stringent requirements for Amazon Prime.
Retain More Business Control – Customers may associate your items with Amazon when a problem arises and contact Amazon’s customer service. It is easier to provide the consumer experience you want while using FBM for order fulfillment.
Cons of FBM
No SEO Benefits – When compared to FBM, FBA has a minor advantage in search results. In terms of keyword ranking and SEO, FBA isn’t a magic pill, but it does assist.
Customer service and refunds – A lot of work goes into customer care and return processing with FBM. It’s important to remember that this isn’t necessarily bad. When FBM sellers communicate directly with customers, they have a greater awareness of their wants and trouble spots.
Brands selling on Amazon should choose FBA as their fulfillment method of choice. For bigger or heavier things like furniture, FBM is the best option because FBA isn’t designed to handle them.