Amazon FBA v/s FBM and which service is beneficial for your e-commerce business!

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Posted on August 06, 2020

Not many of us are aware that Amazon offers a service of storing and shipping the product on behalf of a seller called Amazon FBA services, unlike Amazon FBM, where the seller has to take complete responsibility to fulfill their order.

How can Amazon FBA service be helpful to the seller?

Amazon FBA is a simple and effective process, where Amazon helps you in achieving your dream to expand your business, and it takes care of your products and shipments on your behalf.

For example, let us consider a scenario where a few of your products are hot selling on Amazon, and your business is moving fast and forward. But as a seller, you face challenges like maintaining inventory, less space for storage of products, low work-force, and dispatch related issues- this is where Amazon FBA helps you. It provides you with a solution to store numerous products at their warehouses and ship them for you.

What is Amazon FBA?

FBA is an acronym for fulfillment by Amazon, where Amazon picks, packs, and ships the seller’s product and takes care of the products after purchase process. Amazon’s slogan for the FBA process is “You sell it. We ship it.”

What is Amazon FBM?

FBM is an acronym for fulfillment by merchant, where the seller lists his product/ products on the Amazon website, maintains the inventory of products, and ships the product all by himself. Amazon’s slogan for the FBM process is “You sell it, and you ship it.”

After having a brief understanding of both the fulfillment options, let us find out what the difference between Amazon FBA & Amazon FBM is.

AMAZON FBA AMAZON FBM
Winning the Buy box by default Less Amazon fees
Access to Amazon Prime members Chance of having access to Prime by paying additional charges
Happy, loyal, and satisfying customer experience High Margins
Premier shipping services at amazingly low-cost The seller has control over his inventory
Increased Sales No long-term storage charges to pay
Inventory is at the Amazon fulfillment center
Gives Seller time to concentrate on their business
Customer prefers FBA sellers over FBM
Easy and smooth returns

Reduced overhead cost

Have you heard that 66% of Amazon sellers use Amazon FBA, and only 6% of Amazon sellers use Amazon FBM?

Amazon FBA is the most suitable method for business having small, and lightweight products with high margin and fast-moving inventory and the most of Amazon sellers fall under this category hence they prefer for Amazon FBA over Amazon FBM

For example, if you are into selling books, or baby products, or masks, or gloves, or mobile chargers, or mobile cover, etc. type of the business than Amazon FBA turns out the most effective and rewarding method for your business.

28% of Sellers on Amazon use both FBA and FBM methods to increase their profit and reduce their expenses. This option is best suited for sellers having a variety of products that means sellers, having different sizes of products, varying inventory of different products, etc.

Final Words:

FBA and FBM both benefit the sellers, and while selecting the right fulfillment method for your business is dependent on various criteria like size and type of products, margins, work-force, nature of their business, and sales. Sometimes using both the fulfillment methods also proves to be fruitful.

Right market research and understanding of your business help you to select the best-suited fulfillment method for your business. Still, in confusion, reach out to our Amazon specialist at 99 YRS, always happy to help. We are one of the best e-commerce consulting agencies in Mumbai and provide solutions for all e-commerce related topics like improving e-commerce sales, creating content, marketing products on e-commerce websites, and channel management. Stay tuned and get more tips about how to take your e-commerce business to the next level.