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FBA vs FBM

Posted on July 18th, 2024 

Should You Do FBA or FBM?

FBA (Fulfillment by Amazon) stands for fulfillment by Amazon. This is exactly what it sounds like. You ship your items to Amazon, and they store the items for you at their fulfillment center, pack and ship your items to the customers when they sell, and handle customer service.

FBM, Fulfillment by Merchant, on the other hand, is when you ship the product directly to the customer. You also accept 100% responsibility for customer service.

Benefits of FBA

1. Less work. After you ship your items to Amazon FBA, they handle all of the prep, customer service, and even returned items.

2. Prime check. Since your items are at Amazon’s warehouse, they are able to ship them within 2 days to the customer. This means you will have the Amazon Prime check next to your offer.

3. More BuyBox wins. When you ship FBA, you will win the buy box over the merchant sellers. This results in your items selling faster.

4. The “Prime Bump.” Prime offers often sell for significantly more than FBM offers. This is called the Prime Bump.

5. No customer service. Amazon assumes all customer service for FBA.

Benefits of FBM

1. Your products are instantly live. With FBA, you have to wait for your products to check in. When you list a product FBM, it is instantly available.

2. Lower fees. With FBM, you avoid the storage and fulfillment fees associated with FBA. This can lead to higher profit margins, especially for larger or slower-moving items.

3. More control. You have complete control over your inventory, shipping methods, and customer interactions. This can be especially beneficial if you have specialized packaging or branding needs.

4. Flexible pricing. You can adjust your prices more quickly to respond to market changes, sales trends, or competitor pricing.

5. Better for unique items. If you sell custom or handmade products, FBM allows you to offer more personalized service and unique packaging that might not be possible with FBA.

Which Should You Choose?

The decision between FBA and FBM depends on your specific business needs, product types, and resources. Here are some considerations to help you decide:

Use FBA if:
  - Your products are small, lightweight, and have high turnover rates.
  - You prefer a hands-off approach to logistics and customer service.
  - You want your products to be Prime-eligible

Use FBM if:
  - You sell large or heavy products.
  - You want full control over customer interactions and logistics.
  - You have an existing logistics infrastructure.
  - You plan on selling high ranked, slow moving inventory to avoid storage fees.

Use Both FBA and FBM if:
  - You have a diverse product range with varying characteristics.
  - You want to balance the benefits of both methods for different products.
  - You seek to mitigate risks associated with relying solely on one fulfillment method.

Pro tip:

During Q4, load up your FBA inventory early (think October). Send as much inventory as you can during this time. Then, as it gets deeper into Q4 like mid November through December consider listing most of your inventory FBM to avoid your inventory just sitting idle waiting to be checked in.

Final Thoughts

Choosing between FBA and FBM is not a one-size-fits-all decision. It requires careful consideration of your product types, business model, and long-term goals. By understanding the nuances of each fulfillment method, you can make an informed decision that optimizes your operations and enhances your success on Amazon.

Whether you opt for FBA, FBM, or a combination of both, the key is to stay flexible and responsive to your business’s evolving needs. Using a 3rd party software can speed up the process and help you stay organized. Go2lister - the fastest listing software on the planet - is able to make FBA and FBM listings! Go2lister alleviates headaches associated with creating FBA shipments by allowing you to easily combat split shipments, create custom skus, and list fast. Give it a free trial here!

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