Amazon Fba Vs Fbm: Which Fulfillment Method is Right for Your Business

Amazon FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) are two mainstream logistics methods, each with its own advantages and challenges. This article will explore the pros and cons, fee structure, and packaging requirements of FBA and FBM to help you decide which model is more suitable for your Amazon business.

Why should sellers consider FBM?

Flexibility and cost control

Fulfillment by Merchant (FBM) allows sellers to handle the storage, packaging, and transportation of their products. For sellers who are new to the Amazon market, FBM (Fulfillment by Merchant) provides great flexibility and low cost control.

FBM allows sellers to manage inventory, packaging, shipping, and customer service on their own, without having to send products to Amazon warehouses in advance, thus avoiding high storage fees and possible long-term storage fees. This is an ideal choice for sellers with limited funds or who want to quickly test market response.

Self-control

With FBM, sellers can fully control the entire logistics process, including inventory management, logistics channel selection, and customer service quality. This autonomy allows sellers to be more flexible in responding to market changes, adjusting sales strategies, and optimizing customer experience.

Advantages and Disadvantages of Amazon FBM

Advantages of Amazon FBM

Low-cost startup: No need to pay Amazon's warehousing and fulfillment fees, reducing initial investment. Compared with FBA, FBM generally charges lower fees, which can increase profit margins.

Flexible product selection: Product selection is not restricted by FBA product policies, allowing for more flexibility in product selection. Ideal for oversized, heavy, or fragile items that may incur higher FBA fees.

Autonomy: Sellers have full control over inventory, logistics, and customer service, improving service quality and customer satisfaction, allowing for greater flexibility and customization.

Branding opportunities: FBM allows for customized packaging and branding, which enhances customer experience and increases brand loyalty.

Disadvantages of using Amazon FBM

Slow logistics timeliness: Compared with FBA, FBM has a longer logistics timeliness, which may affect customer experience.

Traffic disadvantage: FBA products enjoy higher exposure and ranking on the Amazon platform, while FBM products may face insufficient traffic.

Cumbersome return processing: Returns and customer service need to be handled by the seller, which increases the operational burden.

Not Prime eligible: Standard FBM products are not eligible for Amazon Prime, which may affect sales.

Amazon FBA Advantages and Disadvantages

Advantages of Amazon FBA

Fast delivery: Leverage Amazon's global logistics network to achieve fast delivery and improve customer satisfaction.

High exposure: FBA products are eligible for Amazon Prime and enjoy priority display rights on the Amazon platform, which increases exposure and sales.

Professional customer service: Amazon provides 24-hour professional customer service to help deal with negative reviews and disputes caused by logistics.

Hands-free delivery: Amazon is responsible for storage, packaging, transportation and customer service, allowing sellers to focus on other aspects of the business.

Disadvantages

High cost: FBA fees can be quite high, including storage fees, fulfillment fees, long-term storage fees, etc., which may significantly increase costs.

High operating threshold: It requires high operational skills such as product selection, listing writing, and paid promotion.

Inventory risk: It is necessary to prepare goods in Amazon warehouses in advance, and there is a risk of inventory backlog and unsalable goods.

Less control: Sellers have less control over inventory and fulfillment processes, which can be a disadvantage for those who prefer to do things themselves.

Strict requirements: FBA has strict product preparation and packaging guidelines that must be followed.

What are the fees for Amazon FBM?

Amazon FBM fees mainly include a monthly subscription fee (US$39.99 for professional sellers), sales commissions (usually around 15% of the product's selling price), and logistics fees (depending on the selected logistics channel and transportation method). In contrast, FBA fees include storage fees, fulfillment fees (order processing fees, sorting and packaging fees, weighing and handling fees, etc.), long-term storage fees, etc.

Does Amazon have packaging requirements for FBM sellers?

Packaging requirements are equally important for FBM sellers. Amazon has clear regulations on the packaging of goods to ensure the safety and integrity of the goods during transportation. For example, the packaging must be strong enough to withstand the pressure of transportation, damaged or contaminated cartons cannot be used, and must meet Amazon's size and weight restrictions.

Use appropriate packaging materials, label, and ensure that the packaging can withstand the rigors of transportation. In addition, there are additional packaging requirements for specific items (such as dangerous goods, fragile items, etc.).

Is FBM Amazon a viable option for your Amazon business?

Whether FBM Amazon is right for your business depends on your specific situation. If you are a startup with limited funds and want to test the market response quickly, and you have the infrastructure to handle logistics and want to control your fulfillment process, then FBM may be a good choice.

FBM Amazon is particularly suitable for sellers with slow sales, oversized products, or those who want to maximize profits by reducing fees.

Amazon FBA vs FBM, which one is better for your business?

Deciding whether FBM is right for your business depends on a variety of factors, including your inventory management capabilities, shipping infrastructure, and customer service resources. If you have the ability to handle logistics and want more control over your brand and customer experience, FBM may be a viable option.

Use FBA if:

Selling large quantities of products, want to take advantage of Amazon Prime eligibility, prefer a hands-off fulfillment process

Use FBM if:

Selling small quantities or oversized products, have logistics experience and a reliable transportation network, want to maintain control over inventory and fulfillment

When choosing between FBA and FBM, you need to consider the following factors:

Cost budget: Evaluate the cost structure of both models based on your financial situation.

Operational capabilities: Consider whether your operations team has the high-demand skills required to handle FBA.

Market demand: Analyze your target market and understand customer expectations for logistics timeliness and service quality.

Long-term planning: Consider your long-term business goals and how the two models can support the achievement of these goals.

Both Amazon FBA and FBM have unique advantages and challenges. Whether you choose the efficiency of FBA or the control of FBM, ensuring a seamless logistics process is critical to success on Amazon.

If you need more help with Amazon logistics services or have any questions, please feel free to contact ChinaDivision, we will provide you with professional support and services.