Amazon’s bustling marketplace is home to more than 2.5 million sellers, and every day, over 3,700 new ones join the fray. If you’re selling on Amazon, you’ve got a big decision to make about how to get your products to your customers.
You can either let Amazon handle everything with their Fulfillment by Amazon (FBA) service, or you can roll up your sleeves and do it yourself with Fulfillment by Merchant (FBM). It’s all about choosing what’s best for your business.
Let’s dive into the main differences between Amazon FBA vs FBM, including which one needs more “know-how” and which can make you more money. We’ll also cover what you should think about when deciding whether to go with FBA, FBM, or maybe even both!
Alright, here’s the scoop on why Amazon FBA is the top pick for
online …
Alright, here’s the scoop on why Amazon FBA is the top pick for online entrepreneurs nowadays: It’s all about letting Amazon handle the heavy lifting—shipping, customer service, you name it—so you can zero in on growing your brand. Plus, with Amazon’s massive audience, your products get the spotlight they deserve. It’s a no-brainer for scaling up in today’s digital marketplace
What’s the scoop on Amazon FBA versus FBM?
Here’s the lowdown:
With Fulfillment by Amazon (FBA), you send your products straight to Amazon’s warehouses. Amazon then takes care of storing your stuff, packing, and shipping orders out to your customers. They’ll even handle customer service for those orders.
On the flipside, Fulfillment by Merchant (FBM) means you list your products on Amazon but manage the storage, shipping, and customer support on your own, or with the help of a third-party fulfillment center.
Amazon Selling Breakdown: Who’s Using FBA vs FBM?
The graph below paints a clear picture: 86% of Amazon sellers prefer using FBA, while 37% are also exploring the possibilities with FBM.
Here’show it breaks down:
64%
Just FBA: 64%
15%
A mix of FBA and
FBM: 15%
22%
Only FBM: 22%
Pros & Cons of Amazon FBA
Using FBA means Amazon charges you two main fees: a fulfillment fee for the pick-pack-ship and customer service part, and a monthly fee for storing your items in their warehouse. Remember, these fees are on top of the referral fees, which is basically Amazon’s cut for selling on their platform.
FBA Pros
- Prime shipping: With FBA, your items get the Prime badge, meaning Amazon Prime members can get your products delivered super fast (like,2-day or even 1-day fast in some places) for free. This is huge because Prime members, all 110 million of them in the US, tend to prefer buying Prime items. It’s a big boost for your sales.
- Winning the Buy Box: If you’re selling the same thing as someone else, landing your offer in the Buy Box (that’s where the “Add to Cart” and “Buy Now” buttons are) is crucial. About85% of sales happen through there. Amazon loves FBA for its speed and reliability, so using FBA could up your chances of getting that prime spot.
- More Time for You: Let’s be real, shipping and handling isn’t the fun part of selling. Amazon’s got a slick operation to get your products out without you having to sweat the details. This means you can focus on creating, marketing, and selling more.
- Better Visibility on Amazon: Though Amazon keeps the exact workings of their search algorithm secret, it’s pretty clear that FBA listings often get a leg up in search results over FBM listings.
- Customer Service Handled: Amazon takes care of customer service and returns for FBA orders, which can really lighten your load.
- Sell Everywhere Easily: With Multi-Channel Fulfillment (MCF), you can use Amazon’s fulfillment network to ship orders from all over – not just Amazon sales. It’s a bit pricier, but super convenient.
FBA Cons
- Costs Could Be a Con: Depending on what you’re selling (think size, weight, sell rate), FBA can be a deal or a deal-breaker. Costs go up during the busy holiday season, too. If you’re a logistics wizard, you might find it cheaper to DIY your fulfillment.
- You’re Not in Charge: Once your inventory is in Amazon’s hands, it’s out of yours. You have to trust them not to mess up, and you won’t be able to pop into the warehouse to check on things.
- Packaging Rules: Amazon’s strict about how they want things packaged and labeled. Mess it up, and you could be doing a frustrating do-over. There are services that can help, but it’s an extra step and expense to consider.
Pros & Cons of Amazon FBM
With the Fulfillment by Merchant (FBM) setup, you’ve got the reins. You can keep your products close and ship them out yourself or team up with a third-party fulfillment partner (and nope, we’re not talking about Amazon here).
Either way, you’re the one making sure everything ships on time and meets Amazon’s standards. Plus, handling customer service and returns? That’s all on you too.
Diving into Seller Fulfilled Prime (SFP):
SFP is like a special club within FBM that lets you flaunt the Prime badge without having to send your inventory to Amazon’s warehouses. To get in on this, you’ve got to promise to deliver orders in 2 days or less to Prime members, without charging extra for shipping. Amazon expects a lot from sellers in this program, so you’ve got to be on top of your game.
To even think about qualifying, here’s what you need to nail:
- Ship at least 99% of your orders on time.
- Get orders out the door the same day if they’re placed before your cut-off time.
- Keep your order cancellation rate under 0.5%.
- Stick to using Amazon’s Buy Shipping Services for pretty much all orders (99% of them, to be exact).
- Play by the rules of Amazon’s Returns Policy.
- Let Amazon handle all the customer service questions.
You’ve got to go through a trial period that could last anywhere from 5 to 90 days to show you can hit these marks consistently. Opting for SFP can give you a nice boost, similar to what you’d get from FBA, like more eyes on your products from Prime members and a better shot at winning the Buy Box compared to regular FBM.
If you’re juggling whether to stick with FBM or switch to FBA…
If you’re juggling whether to stick with FBM or switch to FBA, here’s a bit of friendly advice: FBA could seriously up your game. Imagine Amazon taking care of all the shipping drama, customer service, and even returns for you. That means more chill time for you to brainstorm and expand your empire. Plus, that Prime badge on your listings? It’s like a magnet for customers, seriously boosting your sales. So, if you’re mulling it over, I’d say give FBA a shot. It’s a game-changer for your biz!
FBM Pros
Why FBM Can Be Awesome:
You’re the Boss:
With FBM, you’ve got the wheel when it comes to your inventory and how you fulfill orders. Want to check on your stock more often or tweak how often you restock? No problem. Plus, you don’t have to worry about Amazon changing rules on you out of the blue.
Personal Touch:
For those who think branding is everything, FBM lets you go all out. Fancy packaging? Promotional goodies in the box? All doable with FBM.
Save on Fees:
If you’re a logistics ninja, FBM might save you some cash. You avoid some of the extra fees that come with FBA, like those for returns, long-term storage, and yanking inventory from Amazon’s grip.
FBM Cons
Why FBM Can Be Awesome:
Buy Box Battles:
Landing in the Buy Box can be tougher with FBM, unless you’re doing Seller Fulfilled Prime. But even then, FBA might have a tiny edge. If the Buy Box is where your battle is, FBA might be your best bet.
No SEO Boost:
FBA listings get a bit of love in Amazon’s search rankings. Not a game changer, but every little bit helps.
DIY Customer Service:
Handling returns and customer service is all you. It’s more work, but it’s also a chance to really understand what your customers want and to make improvements based on real feedback.
Diving into Amazon with FBA or FBM in 2024?
Diving into Amazon with FBA or FBM in 2024? You’re looking at the easy button compared to hustling on Etsy, eBay, or anywhere else. FBA takes the shipping drama off your plate, and FBM lets you steer with Amazon’s awesome support. It’s your shortcut to growth without the headaches. Trust me, Amazon’s business model is THE place to be in 2024.
FBA or FBM - Which Way to Go?
Alright ,let’s break it down. Both options have their cool points.
Choosing FBA gets your products all cozy with SEO and the Buy Box, plus it slaps on that Prime badge without you lifting a finger.
If you’re all about selling on Amazon and not so much about the nitty-gritty of shipping and customer chats, FBA lets you chill while Amazon does the heavy lifting.
Your bid is just the ceiling – you might end up paying less. Let’s say you’re aiming for the keyword “running shoes for women” and you set your bid at 70 cents.
Plus, if you’re selling elsewhere, Amazon’s Multi-Channel Fulfillment (MCF) can step in, for a bit extra cash.
But remember, while FBA has some sweet benefits, they do come with a price tagin the form of various fees.
Head-to-Head: Fulfilled by Amazon (FBA) vs. Fulfilled by Merchant (FBM)
- FBA
- FBM
- Prime Shipping
- Item sare automatically eligible for Prime shipping.
- Available only if you’re part of Seller Fulfilled Prime (SFP).
- Buy Box Perks
- Higher chance of winning the Buy Box.
- No inherent advantage unless you’re with SFP.
- Search Ranking
- Listings often get a search ranking boost.
- Generally no boost.
- Customer Service
- Amazon handles it.
- The seller’s job.
- Returns
- Handled by Amazon.
- Managed by the seller.
- Performance Metrics
- Amazon ensures on-time delivery and order accuracy.
- Sellers are responsible for meeting Amazon’s service standards.
- Costs
- Sellers pay for storage, fulfillment, and referral fees. More cost-effective for small, light items. Beware of higher storage fees during the holidays.
- Sellers owe Amazon a referral fee. FBM can be more cost-effective for heavy, bulky items, and some sellers might find it cheaper than FBA.
- Inventory Management
- Sellers don’t control inventory once it’s in Amazon’s hands.
- Sellers have full control.
- Customer Experience
- Less personal control.
- More room for customization and control.
- Packaging Requirements
- Amazon has strict packaging and labeling rules.
- Varies based on the seller’s preferences and practices.
FBA
- Prime Shipping
- Item sare automatically eligible for Prime shipping.
- Buy Box Perks
- Higher chance of winning the Buy Box.
- Search Ranking
- Listings often get a search ranking boost.
- Customer Service
- Amazon handles it.
- Returns
- Handled by Amazon.
- Performance Metrics
- Amazon ensures on-time delivery and order accuracy.
- Costs
- Sellers pay for storage, fulfillment, and referral fees. More cost-effective for small, light items. Beware of higher storage fees during the holidays.
- Inventory Management
- Sellers don’t control inventory once it’s in Amazon’s hands.
- Customer Experience
- Less personal control.
- Packaging Requirements
- Amazon has strict packaging and labeling rules.
FBM
- Prime Shipping
- Available only if you’re part of Seller Fulfilled Prime (SFP).
- Buy Box Perks
- No inherent advantage unless you’re with SFP.
- Search Ranking
- Generally no boost.
- Customer Service
- The seller’s job.
- Returns
- Managed by the seller.
- Performance Metrics
- Sellers are responsible for meeting Amazon’s service standards.
- Costs
- Sellers owe Amazon a referral fee. FBM can be more cost-effective for heavy, bulky items, and some sellers might find it cheaper than FBA.
- Inventory Management
- Sellers have full control.
- Customer Experience
- More room for customization and control.
- Packaging Requirements
- Varies based on the seller’s preferences and practices.
With FBM, you’re pretty much the captain of your ship. You get to call the shots on your stock and how you send out orders.
If you’ve got a knack for logistics and keeping things running smoothly, you could see some nicer profits. Plus, you get to make sure your customers are getting the VIP treatment they deserve.
And hey, if you want in on that Prime action, Seller Fulfilled Prime (SFP) has got your back, potentially bumping up those sales numbers.
Sure, you might not get as much love in the search rankings or the Buy Box as you would with FBA, but FBM hands the reins over to you, perfect for those ready to handle the extra work that comes with freedom.
Can You Use Both FBA and FBM on Amazon?
Totally, you can use both FBA and FBM if you’re selling on Amazon.
Turns out, about 22% of sellers are already doing this. If you’ve got a bunch of different products, mixing and matching FBA and FBM can be a smart move.
Picture this: you’ve got one big item that doesn’t sell too fast and another small one that flies off the shelf. To keep your wallet happy, you could handle the big guy with FBM and let Amazon speed the little one to customers with FBA.
And here’s a pro tip: you can list the same product twice under one ASIN, once for FBA and once for FBM. This way, if you run out of FBA stock, you’ve still got FBM as a backup to keep the orders rolling in.
Top Selling Categories in FBA & FBM
7 Key Factors for Picking Your Amazon Fulfillment Method
So, FBA is pretty great and loads of sellers are into it, but it’s not a one-size-fits-all deal. Here are the top 6 things to mull over when you’re figuring out how to get your products into customers’ hands on Amazon.
Size Matters – If you’ve got small, light products that sell like hotcakes, FBA’s fee structure is your friend. But if we’re talking big and heavy, those fees can add up fast. To figure out the best fulfillment option for your product, check out Amazon’s FBA revenue calculator. It’ll help you estimate the fees and costs involved.
Final thoughts:
Choosing Amazon FBA or FBM
So, you’ve got the lowdown on Amazon FBA and FBM.
Here’s the deal: if you’re selling something that’s flying off the shelves, let Amazon handle the hustle with FBA.
It’s a no-brainer for avoiding the headache of shipping tons of packages daily.
Keep in mind though, if your product’s big and hefty, those FBA fees can add up, but the trade-off is snagging that Prime badge and more Buy Box wins.
If your product’s more of a slow mover, FBM or Seller Fulfilled Prime might be more your style to dodge those storage fees.
This is also a sweet spot if you’ve already got a shipping setup that’s ticking along nicely. Got something big and bulky, or need special packaging love? Stick with FBM to keep that hands-on control and save some cash on fees.
If you’re worried about your items getting the kid gloves treatment they need, FBM lets you sleep easy.
Bottom line: what you’re selling and how your business runs should guide your choice. And hey, crunch those numbers with an FBA calculator before diving in to see what makes cents… I mean, sense!
