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When selling online, one of the first decisions you’ll have to make is whether to use Amazon FBA or FBM. But with so many options available, it can be difficult to determine which one is best for your business.
Amazon FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) are two different types of delivery services that allow you to sell products on Amazon. With both services, Amazon will hold the inventory onsite at their warehouses and ship items directly to customers for a fee.
The main difference between them lies in who holds responsibility for shipping & returns (Amazon or the seller).
To learn more about the difference between the two, we’ll compare both services and provide a helpful guide to help you decide between Amazon FBA vs FBM. Read on.
Pros:
- Shipping is tracked easily and quickly
- More efficient for sellers, since Amazon does the packaging and distribution
- Increased exposure and visibility for sellers in the Amazon marketplace
Cons:
- Costly for sellers in terms of setup and additional fees
- Not as much control over branding or customer service experience
- Potential delays due to increased demand on the Amazon fulfillment network
The primary benefit of using an Amazon fulfillment service is convenience – it makes sending products more streamlined and efficient than traditional warehousing methods such as courier deliveries or drop shipping directly from a wholesale distributor. Additionally, taking advantage of Prime benefits like free shipping can increase sales significantly while offering buyers an exceptional customer experience.
On the downside, sellers must pay a fee along with storage fees that can add up over time which could eat into profit margins if not managed correctly.
Pros:
- Lower upfront costs for the merchant than Fulfillment by Amazon (FBA)
- Merchants have more control over product storage and shipment
- Potential for faster delivery times to customers
Cons:
- Merchant must be responsible for customer service issues and returns
- Limited access to Amazon’s marketing platform and partner programs
- Additional cost of managing inventory and shipping
When using a fulfillment by merchant service, sellers take responsibility for all aspects of delivery including picking product off shelves, packaging orders, order tracking & payments as well as customer service inquiries – essentially doing all the hard work themselves!
This gives sellers complete control over how product is stored & managed which may result in tax or other cost savings but also requires more effort than relying on someone else’s system.
Before deciding between Amazon FBA vs FBM, consider your own resources and capabilities:
Do you want full control over every aspect of order processing?
Or are you looking for convenience because you don’t have easy access to affordable warehouses or shipping partners?
If you prefer hands-off approaches that keep seller involvement to a minimum, then go for an Amazon fulfillment service but know that cost savings may be outpaced by storage fees overtime if not managed correctly.
However, if ultimate control matters most then opting for Fulfillment by Merchant might be the better route despite its higher labor demands.
Apical is an Amazon automation solution for businesses, combining intelligent AI-driven strategies with a suite of powerful tools to simplify and streamline the management of selling on Amazon. We help sellers stay one step ahead of their competition by leveraging data-driven insights to identify opportunities and discover new revenue streams.
With features like price monitoring, account health checks, inventory optimization and competitor analysis, Apical helps users keep their business growing with ease.
Product Features:
- Automated price monitoring for smarter pricing strategies.
- Account health checks to identify issues before they become problems.
- Inventory optimization tools to improve product visibility & cut carrying costs.
- Competitor analysis allows users to track & analyze prices & calculated metrics quickly & accurately.
- Intelligent product sourcing systems designed to maximize customer satisfaction & drive sales.
- Robust reporting system allowing accurate tracking & measurement of key performance indicators (KPIs).
- Made specifically for Amazon; designed to work within Amazon’s rules & policies without infringing on them
With automated solutions like Apical, we can help ensure that you always have a healthy stock of products and are optimizing listings for maximum success.
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