If you’re an Amazon seller, should your fulfillment model be FBA vs FBM, or some mix of both? We’re talking about how Amazon sellers manage the storage, handling and shipping of their products.
FBA is Fulfilled By Amazon; FBM is Fulfilled by Merchant, often called “seller fulfilled.”
At Riverbend Consulting, we serve hundreds of sellers, with many preferring FBA vs. FBM. In fact, our client base mirrors what a recent seller report from JungleScout reports: 86 percent of sellers choose FBA, 37% are FBM and 22% choose both.
So, what’s your approach and why? What makes the most sense financially, logistically and operationally? Here’s more to help you decide.
FBA vs FBM: Is it time re-evaluate?
Could FBM be a better option? Here are three reasons to consider FBA vs FBM.
- Costs: Amazon fees are no joke. Not only do existing fees seem to keep escalating but new fees are on the upswing. This is a particular hardship for new sellers or those with low-margin products. Ultimately, it means doing the math to determine if FBM is less expensive than FBA’s fees-driven approach. In contrast, FBA may be more cost-effective. For example, if you’re dealing with high-volume sales or have items that are particularly difficult to ship, FBA’s economies of scale may make it the better choice. Examine and compare FBM vs. FBA, costs such as wages, warehousing, storage fees, picking and packing fees, shipping fees and more.
- Customer experience: Do you control the customer experience? With FBA, Amazon handles the entire fulfillment process, from picking and packing to shipping and returns. While this can be convenient, it also means that you have less control (almost no control) over how your products are packaged and presented to customers. With FBM, there is more control. You make the product, store the product, package it and ship it. There’s more flexibility in how it’s packaged and presented. Additionally, you’ll be able to respond to customer inquiries and concerns directly, which can help build trust and loyalty with your customers. Of course, customer support services can be time-consuming and costly, with no guarantees that your customer’s experience is any better or worse than FBA.
- Flexibility: With FBM, you’re working your approach, your plan, your way. You have the freedom to ship your items whenever and wherever, be it your own warehouse or from a third-party logistics provider. You have more range to package and label products (Amazon guidelines still apply). There are more constraints with FBA. It means you ship your items to Amazon’s fulfillment centers. It means you adhere to more of Amazon’s strict guidelines for packaging and labeling. It means potential foibles and delays. Essentially, it’s all Amazon’s ways in Amazon’s time.
Whether you’re a new seller or one who’s been in the race for years, it’s a smart exercise to evaluate the most affordable, valuable fulfillment approach. For most sellers I know, a blended approach using both FBM and FBA, works well. It helps manage costs and keeps sellers from putting all their eggs in the Amazon FBA basket (which is riskier than you think).
Take the time to evaluate your amazon business and overall e-commerce strategy. Run the numbers and dive deep into your business performance and business needs. Amazon is both a beautiful system – and a broken one. Yet there’s no doubt, selling on Amazon is worth the blood, sweat and tears.
At Riverbend, we help sellers improve their Amazon presence, increase sales and solve problems. We’re here to help you.