How Does Amazon FBM Shipping Work
8 February 2024
Top Products for Amazon FBM Success in 2024
8 February 2024Last year, more than 60% of sales on Amazon came from third-party sellers.
A key differentiator among Amazon sellers is the fulfillment method they choose: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).
Nearly all Amazon sellers (86%) use FBA, while over a third (37%) use FBM.
FBA involves sending products to Amazon’s fulfillment centers, where Amazon handles the storage, picking, packing, shipping, and customer service.
FBM, on the other hand, allows sellers to manage their own storage, shipping, and customer support.
Key Takeaways:
- Fulfillment by Amazon (FBA) involves sending products to Amazon’s fulfillment centers, while Fulfillment by Merchant (FBM) requires sellers to manage their own storage and shipping.
- With FBA, Amazon handles picking, packing, and shipping for orders, while FBM sellers are responsible for these tasks.
- FBA offers customer service support for orders, while FBM sellers handle customer service themselves.
- Sellers should consider factors such as product size/weight, control of customer experience, seller feedback, turnover rates, logistics, fees, and the importance of the Prime badge when choosing between FBA and FBM.
- Using both FBA and FBM methods can be beneficial for sellers with a large variety of products, allowing for flexibility in fulfillment options.
What’s the Difference Between Amazon FBA and FBM?
When selling products on Amazon, it’s important to understand the difference between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). These two fulfillment methods have distinct features that may impact your business.
Let’s take a closer look at the key differences.
Fulfillment by Amazon (FBA)
With FBA, you send your products to Amazon’s fulfillment centers where they take care of the storage, picking, packing, shipping, and customer service. Here’s what sets FBA apart:
- You send your products to Amazon’s fulfillment centers.
- Amazon handles picking, packing, and shipping for your orders.
- FBA offers customer service support for your orders.
Fulfillment by Merchant (FBM)
FBM allows you to manage your own storage, shipping, and customer support. Here are the main features of FBM:
- You are responsible for managing your own storage and shipping.
- You handle picking, packing, and shipping for your orders.
- You are in charge of customer service.
By understanding these differences, you can make an informed decision about which fulfillment method aligns best with your business needs and goals.
Which Amazon Fulfillment Method Should Sellers Use?
When it comes to choosing between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM), there are several factors that sellers should consider.
Understanding these factors will help you make an informed decision that aligns with your business goals and resources. Let’s explore the key considerations:
- Size and weight of the product: FBA is beneficial for small and lightweight products, as Amazon handles the storage and shipping. On the other hand, FBM may be more suitable for oversized or heavy products that require specialized logistics.
- Control of customer experience: If you want more control over the customer experience, FBM allows you to handle storage, shipping, and customer support. With FBA, Amazon takes care of customer service.
- Seller feedback: FBA sellers have less to worry about when it comes to seller feedback, as Amazon’s customer service can help maintain positive ratings. FBM sellers, however, must focus on managing customer satisfaction and feedback on their own.
- Inventory turnover rate: FBA is advantageous for products with quick turnover, as Amazon’s fulfillment centers can efficiently process and ship orders. FBM may be a better option for products with slower turnover, as you have more control over inventory management.
- Logistics: If you don’t have existing fulfillment logistics in place, FBA is recommended. Amazon’s infrastructure can handle the storage, picking, packing, and shipping of your products. On the other hand, if you already have established logistics, FBM allows you to leverage your own resources.
- Expenses and fees: FBA requires paying fulfillment fees and storage fees to Amazon. FBM, on the other hand, involves handling and shipping expenses. Consider your budget and cost structure when deciding between the two.
- Prime badge: If having the Prime badge and offering Prime shipping is important for your products, FBA is the way to go. FBA is automatically eligible for Prime, giving your products a competitive advantage.
Choosing the Right Method for Your Business
Each fulfillment method has its own advantages and considerations.
Assessing the size and weight of your products, your desired level of control, seller feedback management, inventory turnover rate, logistics capabilities, expenses, and the importance of Prime can guide your decision-making process.
Take the time to evaluate these factors and choose the method that best aligns with your business goals and resources.
Now that you have a better understanding of the factors to consider, let’s move on to the next section to explore whether sellers can use both FBA and FBM fulfillment methods.
7 Factors to Consider Before Choosing a Fulfillment Method on Amazon
When deciding on the right fulfillment method for your Amazon business, there are several factors to consider.
These factors will help you determine whether Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) is the best option for your specific needs and goals.
- Item size/weight: If you sell small and lightweight products, FBA can be more cost-effective due to Amazon’s efficient logistics and lower shipping rates. On the other hand, FBM may be more suitable for oversized or heavy products, as you can handle shipping on your own terms.
- Control of customer experience: FBM gives you more control over the entire customer experience, from packaging to shipping. With FBA, Amazon takes care of these aspects, but you have less control over the process.
- Seller feedback: FBA sellers have the advantage of relying on Amazon’s customer service, which can lead to less concern about negative seller feedback. However, FBM sellers must prioritize maintaining positive feedback through exceptional customer service.
- Turnover rates: For products with a quick turnover, FBA is advantageous because of Amazon’s efficient order processing and fulfillment. On the other hand, FBM may be a better choice for products with slower turnover, as you can manage inventory and fulfillment at your own pace.
- Logistics: If you don’t have existing fulfillment logistics in place, FBA can save you time and effort by utilizing Amazon’s extensive network of fulfillment centers. However, if you already have efficient logistics, FBM allows you to leverage your existing infrastructure.
- Fees: FBA requires paying fulfillment and storage fees, but it relieves you of the hassle and costs associated with managing your own fulfillment. FBM involves handling and shipping expenses, but you have more control over the associated costs.
- Prime badge: FBA offers the advantage of Prime shipping, which can attract more customers and increase sales. With FBM, you won’t have the Prime badge, but you can still offer competitive shipping options to provide a positive customer experience.
Considering these seven factors will help you make an informed decision when choosing between FBA and FBM.
It’s essential to align your fulfillment method with the unique characteristics of your products and your long-term business goals.
Comparison of FBA and FBM Factors:
| Factors | Fulfillment by Amazon (FBA) | Fulfillment by Merchant (FBM) |
|---|---|---|
| Item size/weight | Cost-effective for small and lightweight products | More suitable for oversized or heavy products |
| Control of customer experience | Less control; Amazon handles packaging and shipping | More control; handle packaging and shipping on your own terms |
| Seller feedback | Less concern about negative feedback; Amazon’s customer service support | Emphasis on maintaining positive feedback through exceptional customer service |
| Turnover rates | Advantageous for products with quick turnover | Better for products with slower turnover |
| Logistics | No existing fulfillment logistics required | Can leverage existing efficient logistics infrastructure |
| Fees | Fulfillment and storage fees | Handling and shipping expenses |
| Prime badge | Prime shipping and badge for eligible products | No Prime badge, but competitive shipping options |
Considering these factors will help you choose the fulfillment method that aligns best with your business strategy and objectives.
Whether you opt for FBA or FBM, it’s crucial to weigh the advantages and drawbacks to ensure optimal success on the Amazon marketplace.
FBA vs FBM: Which Is Right for Your Business?
When it comes to choosing between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM), there are several factors you need to consider.
Each method has its own advantages and considerations that can impact your business. Here’s a breakdown of what you should keep in mind:
Product Size/Weight
Consider the size and weight of your products. FBA is generally more cost-effective for small and lightweight items, while FBM may be a better choice for oversized or heavy products.
Control of Customer Experience
Think about the level of control you want over the customer experience. FBM allows you to manage all aspects of fulfillment, including packaging and shipping, giving you more control over the customer experience.
FBA relies on Amazon’s fulfillment processes, which may not offer as much control in this regard.
Seller Feedback
If seller feedback is important to you, keep in mind that FBA sellers have less to worry about when it comes to feedback since Amazon handles the fulfillment and customer service.
FBM sellers, on the other hand, need to focus on maintaining positive feedback as they handle customer service themselves.
Turnover Rates
Consider the turnover rates of your products. FBA is well-suited for products with quick turnover since Amazon’s efficient fulfillment processes ensure fast shipping. FBM may be more suitable for products with slower turnover rates.
Logistics
Evaluate your existing fulfillment logistics. If you don’t have your own logistics in place, FBA can be a convenient option since Amazon takes care of all the storage, picking, packing, and shipping.
If you already have established fulfillment processes, FBM allows you to leverage your existing logistics.
Fees
Take into account the expenses and fees associated with each fulfillment method. FBA requires paying fulfillment fees and storage fees, while FBM involves handling and shipping expenses that you’ll need to manage.
Prime Badge
If having the Prime badge on your product listings is important to you, FBA offers the advantage of Prime shipping and eligibility for the Prime badge on eligible products.
By carefully evaluating these factors, you can determine whether FBA or FBM is the right fulfillment method for your business. It’s essential to align your choice with your business goals and available resources.
| Fulfilment Method | Advantages | Considerations |
|---|---|---|
| Fulfillment by Amazon (FBA) |
|
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| Fulfillment by Merchant (FBM) |
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How to Use Both FBA and FBM Fulfillment Methods
Sellers have the opportunity to leverage both Amazon FBA and FBM methods to their advantage by tailoring their fulfillment strategies to suit different types of products.
This allows sellers to capitalize on the unique benefits offered by each method, depending on the specific characteristics and requirements of their products.
For instance, using FBA for small and fast-selling products can be highly efficient, as Amazon’s fulfillment centers handle the storage, picking, packing, shipping, and customer service for these items.
On the other hand, FBM can be an excellent option for oversized and slow-selling products, as it allows sellers to manage their own storage, shipping, and customer support for such items.
By strategically combining both FBA and FBM, sellers can optimize their fulfillment processes and enhance overall customer satisfaction.
Moreover, sellers can even create both FBA and FBM offers for the same product under one ASIN. This flexibility enables sellers to provide different fulfillment options to customers, depending on their preferences or specific requirements.
By offering both FBA and FBM options, sellers increase their chances of attracting a wider range of customers and maximizing their sales potential.
Here is an example of how sellers can effectively use both FBA and FBM methods:
- List small and fast-selling products under FBA to benefit from Amazon’s efficient fulfillment services and Prime eligibility.
- For oversized and slow-selling products, list them under FBM to have more control over storage, shipping, and customer support, ensuring a personalized experience for customers.
By making strategic use of both FBA and FBM fulfillment methods, sellers can optimize their operations, cater to a wider range of customer needs, and ultimately drive greater success on the Amazon marketplace.
| Advantages of Using Both FBA and FBM Methods | Benefits |
|---|---|
| 1. Flexibility | Sellers can choose the most suitable method based on product characteristics and requirements. |
| 2. Enhanced Customer Experience | Offering different fulfillment options allows sellers to cater to diverse customer preferences and requirements. |
| 3. Increased Sales Potential | By leveraging both methods, sellers can attract a wider range of customers and maximize their sales opportunities. |
Frequently Asked Questions
Now that you have gone through this helpful guide on the difference between Amazon FBA and FBM, you must have even more questions in mind. Don’t worry, we’ll answer them here.
Which Amazon fulfillment method should sellers use?
Sellers should consider factors such as product size/weight, control of customer experience, seller feedback, turnover rates, logistics, fees, and the importance of the Prime badge to determine which method aligns best with their business goals and resources.
Can Amazon sellers use both FBA and FBM fulfillment methods?
Yes, sellers have the option to use both methods for different products, allowing them to benefit from the advantages of each method based on the specific characteristics of their products.
What are the pros and cons of Amazon FBA?
Pros of FBA include Prime shipping eligibility, increased chances of winning the Buy Box, focus on selling instead of fulfilling, potential Amazon SEO advantage, and customer service coverage. Cons include costs, loss of control over inventory, packaging and labeling requirements, and potential competition from merchants with logistics expertise.
What are the pros and cons of Amazon FBM?
Pros of FBM include more control over inventory and fulfillment, potential cost savings for merchants with logistics expertise, Seller Fulfilled Prime program for Prime shipping eligibility, and the ability to use branded packaging. Cons include the need to handle all aspects of fulfillment, potential challenges with meeting Amazon’s service levels, and lack of the Prime badge for eligible products.
Which fulfillment method is right for my business – FBA or FBM?
The decision depends on factors such as product size/weight, control of customer experience, seller feedback, turnover rates, logistics, fees, and the importance of the Prime badge. Sellers should evaluate these factors and determine which method aligns best with their business goals and resources.
How can I use both FBA and FBM fulfillment methods?
Sellers can use both methods for different products, utilizing FBA for small and fast-selling products and FBM for oversized and slow-selling products. They can also create both FBA and FBM offers for the same product under one ASIN.
Conclusion
After considering all the factors, it is clear that choosing the right fulfillment method, whether it’s Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM), is crucial for the success of your Amazon business.
Evaluating the size and weight of your products, the control you want over the customer experience, seller feedback, turnover rates, logistics, fees, and the importance of the Prime badge will help you make an informed decision.
If you have small and lightweight products, FBA may be the ideal choice, as it allows you to take advantage of Prime shipping eligibility and Amazon’s customer service support.
On the other hand, if you have oversized or heavy products, prefer more control over the fulfillment process, or have existing logistics in place, FBM could be a better fit.
Ultimately, the decision between FBA and FBM depends on your specific business goals, resources, and product characteristics.
By carefully analyzing these factors and considering the unique aspects of your Amazon business, you can choose the fulfillment method that aligns best with your needs and maximizes your chances of success.
