When new online sellers look for efficient ways to store and ship their goods to consumers, they may stumble upon Amazon 3PL services. Working with this provider means choosing between fulfillment by Amazon (FBA) and fulfillment by merchant (FBM), and it’s a big decision.
FBA vs. FBM: which is better? Whether you’re a small e-commerce retailer or an at-home seller, consult the guide below. Choosing your business’s preferred fulfillment method through Amazon requires some key considerations for an informed decision.
The Difference Between FBA and FBM
With fulfillment by Amazon, you send your merchandise to the program’s fulfillment network. From there, Amazon’s crew will handle the storage, shipping, returns, and customer service. It’s a full-service option that lets you take a hands-off approach to selling if you’d like to focus on other business obligations.
Choosing fulfillment by merchant means that even though you access Amazon’s e-commerce solutions and list products on the platform, you retain complete control over your inventory, shipping, and logistics. Going this route means you will interact directly with your customers who need support for returns or exchanges.
Considerations for Selecting FBM or FBA
If you’re still unsure about your position on the FBA vs. FBM debate, here are some key factors.
Prime Eligibility
FBA sellers qualify for Prime shipping for their goods. Profit margins may benefit since Prime members enjoy purchasing items with one-day or two-day shipping. FBM retailers don’t qualify for the same arrangement.
Fees
All sellers have storage and shipping costs, but FBA sellers pay Amazon storage, labor, packaging, and shipping fees. If your average cost of storing and shipping goods exceeds Amazon’s fees, selling through the company is a winning strategy.
Customer Service
Do you want to interact directly with consumers and control your brand’s customer experience and inventory management? Handling returns and customer service issues takes time, but FBM is a good choice if you want to better understand your customers’ needs and preferences.
Item Size and Weight
Since selling directly through Amazon incurs storage fees, using FBA for large, bulky items isn’t ideal. Are your goods generally small and lightweight? If they are, or they sell quickly, storage fees might not be an issue.
Merchandise Turnover Rate
Turnover rates refer to how quickly retailers can sell and restock merchandise.
Do you house your own products and just sell through Amazon’s store? Your turnover rate won’t matter because you’re not paying Amazon’s storage fees.
Choosing FBA means the longer the goods stay in Amazon’s warehouse, the more warehouse fees you’d pay. Only consider that option if your products sell quickly. An aged inventory surcharge applies to items in their warehouse over 180 days.
Turn To Streamline Fulfillment for More Help
If you prefer a hands-off approach to selling goods and don’t mind the fees, fulfillment by Amazon may be ideal. Streamline Fulfillment also manages business warehousing, labeling, packing, and shipping. Why not enlist our experienced team to assist with your FBA prep services and enhance your business operations?
For more information about FBA vs. FBM or a consultation with a leading fulfillment services provider, call Streamline Fulfillment today at 509-888-2880!