Tuesday, September 26, 2023

Amazon FBA vs. FBM: What Are the Differences?

With 89% of customers more likely to purchase a product from Amazon than another site, having a presence on the platform is essential to eCommerce businesses. Many businesses know the benefits, with there being around three million active sellers on Amazon.

If you’ve recently looked into selling your products on Amazon, you’ve likely seen that there are two different fulfillment methods. But, how do you know which one is best for your business — Amazon FBA vs. FBM?

This guide will discuss the differences between Amazon FBA and FBM so you can learn more about the subject.

What’s the Difference Between Amazon FBA vs. FBM?

Amazon FBA stands for Fulfillment by Amazon. With this method, a business stores its products at various Amazon fulfillment centers. When an order is placed, Amazon packs and ships the order to the customer.

Amazon FMB stands for Fulfillment by Merchant. The business handles the storage, packing, and shipment of all customer orders.

Advantages and Disadvantages of Amazon FBA

When a business opts for Amazon FBA, they pay Amazon a monthly storage and fulfillment fee. The fulfillment fee covers the packing, customer service, and shipping costs. The storage fee includes the cost of storing their items at a fulfillment center.

With Amazon FBA, the items you sell are eligible for Amazon Prime shipping. Customers that have a Prim account can get your products with free two-day shipping. This increases the chance of your items selling since customers can take advantage of free, fast delivery.

Additionally, you can focus on selling your products when you don’t have to worry about packing and shipping them. You and your team can spend your time developing new products and doing customer outreach.

The extra costs of Amazon FBA might be a deterrent for some businesses. If you want more Amazon FBA advice and help with running your online store, you can click here for more information.

Advantages and Disadvantages of Amazon FBM

With Amazon FBM, you have more control over your fulfillment process and inventory. You can use marketing inserts and branded packaging when you ship your orders yourself. That’s not possible with Amazon FBA.

You also won’t encounter additional fees when you do FBM. You can increase your company’s margins if your fulfillment costs are less than Amazon FBA fees.

However, when you opt for Amazon FBM, you’ll be in charge of the entire process. That includes returns and customer service inquiries.

While that’s not always a bad thing, it does take time out of your day. You might also have to hire additional team members to handle these requests. The cost of hiring extra staff might increase your bottom line.

Make the Right Decision for Your Business

Deciding whether Amazon FBA vs. FBM is better for your business depends on a variety of factors. Doing your research and speaking with a qualified Amazon management company can help you with your decision-making process.

For more Amazon FBA tips and other eCommerce information, check out one of our other articles.