If you’re planning to sell on Amazon, one of the first decisions you need to make is choosing between FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant). Each model has its advantages and drawbacks, and the best choice depends on your business needs. In this guide, we’ll break down both models to help you decide which one suits you best.
What is Amazon FBA?
FBA allows sellers to store their inventory in Amazon’s fulfillment centers, where Amazon handles storage, packaging, shipping, and even customer service.
Advantages of Amazon FBA
– Prime Badge Access – FBA products are eligible for Amazon Prime, giving customers fast shipping options, which can increase your sales.
– No Need for Storage & Logistics – Amazon manages warehousing, packing, and shipping, saving you time and effort.
– Less Customer Service Work – Amazon takes care of returns and customer inquiries, reducing your workload.
– Faster Shipping – Amazon’s logistics network ensures quick delivery, improving customer satisfaction.
Disadvantages of Amazon FBA
– Higher Fees – Amazon charges storage and fulfillment fees, which can be costly, especially for slow-moving or bulky products.
– Less Control Over Inventory – Once your products are in Amazon’s warehouse, you won’t have direct access to them.
– Upfront Investment Required – You need to send stock in advance, meaning a higher initial investment.
What is Amazon FBM?
With FBM, sellers store, pack, and ship their own products instead of using Amazon’s fulfillment centers. You are responsible for inventory management, shipping, and customer service.
Advantages of Amazon FBM
– Full Control Over Inventory – You manage your own stock and can handle fulfillment the way you prefer.
– Lower Costs – If you sell large or slow-moving products, managing your own logistics can be cheaper than FBA.
– Custom Packaging Options – You can use branded packaging and include promotional materials to improve customer experience.
Disadvantages of Amazon FBM
– No Automatic Prime Eligibility – FBM sellers don’t get the Prime badge, unless they qualify for Seller Fulfilled Prime (SFP), which has strict requirements.
– Time-Consuming Logistics – Packing and shipping every order yourself requires significant time and effort.
– Customers Expect Fast Delivery – Amazon shoppers are used to fast shipping, and meeting these expectations can be challenging with FBM.
Which Model is Best for You?
Ask yourself these key questions when deciding between FBA and FBM:
- Are your products small and fast-selling? → FBA is likely the better choice.
- Do you want full control over storage and shipping? → If yes, FBM may suit you.
- Is Prime eligibility important for your business? → FBA provides automatic Prime access.
- Do you have a low sales volume? → FBM can be a more cost-effective option for small-scale sellers.
