Choosing between Amazon FBA and Amazon FBM is one of the greatest dilemmas faced by Amazon sellers.
Both fulfilment methods have their own strengths, and both can impact your business’s scalability, profitability, and customer service efficiency.
In the Fulfillment by Amazon (FBA) model, sellers send their products to Amazon, which then ships the products to customers. In contrast, the Fulfillment by Merchant (FBM) model is the one where the sellers take care of the logistics.
Understanding which model aligns with your products, margins, and long-term goals is highly essential to ensure the success of your Amazon business. At Krolog, a leading Amazon FBA agency, we help sellers analyze the numbers, margins, and customer expectations before opting for the right fulfillment method. In this blog article, we will help sellers like you understand the pros and cons of each method to help you make an informed decision that aligns with your business goals and prospects.
Let’s break it down step by step for you.
What is Amazon FBA?
Amazon FBA (Fulfilment by Amazon) is Amazon’s product fulfillment method, where Amazon stores, packs, ships, and even handles customer support for your orders. Sellers simply need to dispatch their inventory to Amazon’s fulfillment centers, and the rest of the order shipment and fulfillment process is seamlessly taken care of by Amazon.
Why sellers choose FBA:
- Products fulfilled by Amazon qualify for the coveted Prime badge, which instantly boosts customer trust and triggers conversions.
- Amazon FBA is perfect if you want to scale your Amazon business quickly without worrying about warehousing or shipping logistics.
- Amazon handles customer queries and returns on your behalf, saving you time and stress.
What is Amazon FBM?
FBM (Fulfillment by Merchant) is where the seller themselves manage the storage, packing, shipping, and customer service directly, or by collaborating with a trusted third-party logistics (3PL) partner.
Why sellers choose FBM:
- With the FBM approach, you, as a seller, get to decide your warehousing, packaging, and shipping methods, which often means lower costs for bulky or low-margin products.
- FBM sellers do not have to spend on the warehouse storage fees or Amazon policies.
- For sellers selling furniture, gym equipment, or items that move more slowly, FBM can prove to be far more cost-effective.
With FBM, sellers can practice greater control over their products, while foregoing convenience, making it a good choice for experienced merchants who want tighter command over operations.
Amazon FBA vs FBM: Key Differences
Factor | FBA (Fulfillment by Amazon) | FBM (Fulfillment by Merchant) |
Logistics | Managed by Amazon | Managed by the seller or a third party |
Storage | Amazon warehouses | Seller’s warehouse or a third-party storage |
Shipping | Amazon Prime Fast Shipping | Opted by sellers |
Customer Service | Handles by Amazon | Handles by Sellers |
Prime Eligibility | Automatically eligible | Non-eligible, unless registered for Seller fulfilled Prime |
Costs | Greater fees, fewer overheads | Lower costs, greater responsibility |
An Amazon FBA agency can help sellers decide better by factoring in product dimensions, storage cycles, margins, and shipping volumes to decide which option drives better ROI.
Hybrid Model: Why Not Both?
At Krolog, we aim to help sellers choose what works best for you. For many businesses, going for a hybrid approach might prove to be a great success. Here’s how a hybrid approach can work beneficially for you:
- Choosing FBA for fast-moving, small-to-medium items can benefit from Prime shipping.
- FBM can work perfectly for oversized, seasonal, or low-margin products that would otherwise eat up profits with FBA and storage fees.
Krolog sets up these customized hybrid strategies for clients, striking a balance between cost-efficiency and customer satisfaction.
Which is Better: FBA or FBM?
- FBA is an ideal approach if you’re looking to scale quickly, tap into Amazon Prime customers, or simplify your logistics.
- FBM works for experienced sellers who want greater control and better margins on certain products, along with flexibility over shipping.
In many cases, sellers find success with a mix of both, that is, by selecting the fulfilment model based on product type, audience, and market competition.
Choosing between Amazon FBA and FBM isn’t a simple logistics decision. It shapes the entire growth strategy of your Amazon business. Both models can help you succeed, but the key to Amazon success lies in aligning fulfillment with your goals, margins, and product type.
That’s where Krolog’s expert guidance can make a difference. At Krolog, our Amazon FBA services help sellers evaluate costs, set up efficient fulfilment strategies, and scale without the stress of guesswork.
Looking to scale your Amazon business? Our professional Amazon FBA services can help you choose the right fulfilment model to unlock maximum ROI.
Schedule your free consultation or log on to www.krolog.com to take advantage of the best fulfillment method for your business.
