Amazon FBA vs. FBM: Pros and Cons of Each

If you’re an Amazon seller, you’ve probably heard about FBA and FBM. These are two ways to fulfill your orders, but which one is better for you? In this blog, we’ll explore Amazon FBA vs. FBM, explaining both options and their pros and cons. This will help you make an informed decision about which one suits your business best.

What is FBA and FBM?

Amazon FBA (Fulfillment by Amazon): With FBA, Amazon handles the entire process from storing your products to shipping them to customers. You send your products to Amazon’s warehouse, and they take care of packing, shipping, and even customer service. If any issues arise with your inventory, you may need to explore FBA inventory reimbursement to recover lost or damaged items.

Amazon FBM (Fulfillment by Merchant): In FBM, you handle everything yourself. This means you store your products, pack them, and ship them directly to the customer. Amazon just provides the platform to list your products.

Amazon FBA vs. FBM – A Complete Comparison Guide

To understand which method suits your needs, let’s compare Amazon FBA and FBM based on different factors:

The Pros and Cons of Amazon FBA and FBM

Pros:

• Fast Shipping: Amazon handles fast shipping, including Prime eligibility.
• Customer Service: Amazon takes care of customer service, returns, and refunds.
• More Sales: FBA products often rank higher and sell faster due to Prime benefits.
• FBA Reimbursement Services: If Amazon damages your inventory, you can use FBA reimbursement services to claim compensation.

Cons:

• Higher Fees: You have to pay storage, handling, and fulfillment fees.
• Less Control: Amazon controls how your products are stored, packed, and shipped.
• Storage Limits: There might be restrictions on how many products you can send to Amazon’s warehouses.

Amazon FBM

Pros:

• Lower Fees: You don’t have to pay storage or fulfillment fees.
• More Control: You handle your products and can ensure everything is done your way.
• Flexibility: You can sell on other platforms without worrying about Amazon’s restrictions.

Cons:

• Slower Shipping: You have to manage shipping yourself, which can be slower than Amazon’s fast services.
• More Work: You’ll need to handle customer service, packing, and returns.
• Less Exposure: FBM products don’t get the same visibility as FBA products, especially for Prime customers.

Factors to Consider Before Choosing Amazon FBA vs. FBM

When deciding between FBA and FBM, it’s important to think about several key factors:

1. Product Size and Weight

If your products are big or heavy, FBA fees can add up. FBM may be a cheaper option for large or bulky items. On the other hand, for small and lightweight products, FBA may be more cost-effective because Amazon offers competitive shipping rates.

2. Customer Experience Management and Control

FBA takes care of customer service, which is great if you don’t have time to deal with inquiries or returns. But, if you want more control over how you interact with your customers, FBM gives you that opportunity. You can directly manage the relationship with your buyers.

3. Seller Feedback

With FBA, Amazon handles most of the process, which can lead to more positive feedback for fast shipping and customer service. However, if you have excellent packing and communication skills, FBM allows you to showcase this and get good feedback.

4. Product Turnover Rate

If your products sell fast, FBA can be a great option as you can send them in bulk to Amazon. But, if your products don’t sell quickly, you may end up paying high storage fees. FBM can save you money by letting you store products in your own space without paying extra fees.

5. Fees

FBA comes with storage and fulfillment fees. These can be worth it if your products sell quickly or if you value the time saved by having Amazon manage everything. FBM allows you to avoid these fees, but you’ll need to factor in the costs of shipping, packing materials, and your time.

6. Logistics

Amazon’s FBA system is known for its smooth logistics. Amazon ships fast and makes the process easy for the seller. With FBM, you need to handle everything yourself, including managing shipping times and ensuring products arrive on time.

7. Restrictions from Other Marketplaces You Sell On

If you sell on multiple marketplaces (like eBay, Etsy, or your website), FBM might be a better choice. FBA can limit your flexibility because Amazon prefers that sellers focus on their platform.

Top Product Categories for Amazon FBA vs. FBM

• FBA Products: Lightweight, high-demand, and fast-selling products (like electronics or small gadgets) are ideal for FBA. This is because the quick shipping and high visibility through Amazon Prime can boost your sales.
• FBM Products: Large, expensive, or specialized products (like furniture or handmade items) may be better suited for FBM. You’ll have more control over how these items are handled and shipped, and you can avoid high storage fees.

How FBM and FBA Works

• FBA: You send your products to Amazon’s warehouse. They store, pack, and ship the products for you. Amazon also handles customer inquiries, returns, and refunds.
• FBM: You list your products on Amazon, but you keep them in your storage. When a customer places an order, you pack the product and ship it yourself.

How to Choose Between Amazon FBA and FBM

If you’re trying to decide between Amazon FBA and FBM, here’s a quick guide:

Choose FBA if:

• You sell lightweight, high-demand products.
• You want Amazon to handle most of the work.
• You want your products to be eligible for Amazon Prime.

Choose FBM if:

• You sell heavy or bulky items.
• You want more control over how your products are shipped
• You want to avoid Amazon’s storage and fulfillment fees.

Conclusion

Deciding between Amazon FBA vs. FBM depends on your product type, business model, and goals. Both options have their pros and cons, and there’s no one-size-fits-all solution. Take time to consider your needs, product turnover rate, and costs before making a decision. 

Choosing the right option can help grow your Amazon business and improve your customer’s experience.