Amazon FBA vs FBM: which is better for your business?

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Amazon is one of the largest and most important marketplaces and businesses in the world. One of its greatest qualities is that it offers its sellers different alternatives to make them more efficient and competitive on their marketplace. One of the systems they offer is Amazon FBA. But what is better for you, Amazon FBA vs FBM?

What is Amazon FBA?

Amazon FBA also known as Fulfillment By Amazon is a system focusing on product shipping logistics  within the marketplace platform to which you as a seller (regardless of whether you are a retailer or a brand), can sign up to.

What is FBM?

FBM or Fulfillment By Merchant in this case the seller takes full responsibility for the storing and delivering logistics including returning packages and client services.

Which of these options should you choose: Amazon FBA vs FBM?

You may have seen the overall definition of both and thought the best option clearly was Amazon FBA. However, both of these  methods have their advantages and disadvantages, let’s take a look.

Amazon FBA vs FBM

Amazon FBA Pros:

1. You are free of all delivering responsibilities.
2. As part of the Fulfillment package Amazon offers customer Service.
3. Amazon provides inventory storage.
4. Your product will be part of the Amazon Prime products, which means that Prime users will have free shipping and a 2 day delivery guarantee. This will make your product more attractive.
5. A better placement on the marketplace.

FBM Pros:

1. You can personalize your fulfillment experience.
2. You have to pay less Amazon fees.
3. Personalized customer services.

Amazon FBA Cons:

1. There are costs to take into consideration such as: a monthly fulfillment fee, a monthly storage fee and an Amazon commission for sale on the marketplace.
2. One your product is delivered to Amazon, you lose all control over it. You will have to rely 100% on Amazon and its systems.
3. Amazon can create a product just like yours and be your direct competition if it sees that your product is very competitive in the market. This can affect your place in the marketplace and your overall sales.

FBM Cons:

1. You are responsible for fulfilling Amazon’s services levels when it comes to delivering and returning processes.
2. You are responsible for storage.
3. You are responsible for customer services.
4. Your products may be less visible on Amazon’s marketplace.

If you are still not sure what you want, you can use both systems: Amazon FBA and FBM also, Amazon offers the opportunity to FBM sellers to have SFP, Seller fulfillment Prime, which allows the seller to sell products as a Prime product. 

Regardless of what you choose, remember to implement an Amazon price tracking tool and do your market research for e-commerce or ecommerce analysis to take your business to the next level.

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