FBA is Fulfilment by Amazon and FBM is Fulfilment by Merchant
In this Post today I am going to explain the difference between the two, FBA and FBM which one you should go with as new seller
Let’s start with FBA –
In FBA model, You deliver your products to Amazon in bulk and then Amazon deliver your products to customers and take care of customers serive, and returns too
Whereas FBM is,
you as a seller take responsibility to ship your products to customers using any third party shipping service. It may sound cheaper than FBA but still in most of the cases FBA is cheaper
Pros for FBA-
- Amazon favours this model most which means you get more visibility and better cart
- Amazon Handles Everything: Storage, packing, shipping, and returns.
- Prime Eligibility: Your products get Prime badge instantly
- Amazon Customer Service: Amazon manages inquiries, refunds, and returns.
- Faster Shipping: Quick and reliable delivery.
- Scalability: Ideal for high-volume sellers.
Cons of FBA –
- Storage and Fulfilment fees can be higher for some items.
- Stock Management Issues – Short vs long term storage issue, Storage Fees: Sellers may find it default to have a right amount of inventory in FBA as short inventory will make them out of stock, long story will result in high long term storage fees
- Returns Management: Amazon handles returns, which may not always be in your favor. And Amazon can classify sellable items also as unsellable, and they you need to bring that item back to you, paying shipping and amazon a fees for handling or you can simply destroy the item but in both cases it is your loss
- Inventory Limits: Amazon may impose limits on the amount of inventory you can send to FBA
Pros of FBM:
- Full Control: You manage inventory, shipping, and customer service.
- No FBA Fees: No storage or handling fees from Amazon, potentially lowering costs.
- Flexible Shipping: You can choose the best shipping carriers and methods.
- No Inventory Restrictions: You have complete control over how much stock you keep.
- Better Profit Margins: Potential for higher margins by avoiding FBA fees.
Cons of FBM:
- Low Visibility and CVR
- More Responsibility: You handle packing, shipping, and customer service.
- No Prime Eligibility: Your products won’t automatically be Prime-eligible, possibly reducing visibility. There is option for seller fulfilled prime also but thats not easily available for all the items either
- Slower Shipping: May not compete with FBA’s fast shipping times.
- Limited Scalability: Scaling up can be harder without Amazon’s logistics support.
So I hope you have a better understanding on FBA vs FBM
My Final Recommendations –
Go with FBA if you truly wants to enjoy full potential of Amazon, because Amazon always favours FBA products, you get prime badge instantly, Sellers have option to put filter for prime products only and may consumers consider Prime eligibility when choosing a product.
you should look for FBM only when
if you have a very bulky item
There are almost 0 completion in your niche
You have huge profit margins going with FBM
You sell custom products: If your product needs special customization or handling, FBM is a better choice.
Hybrid Approach (Best of Both Worlds):
- Some sellers use both models. For example, high-demand products can go with FBA, and special/custom items can be handled with FBM.
