In-depth Comparison, Amazon FBA or FBM

Amazon has a lot of good options for the sellers. It just depends on your needs and wants to pick a few and leave a few of them for your business. Every option has a certain range of pros and cons for your business. The most common con associated with every option is the cost that incurs when you choose to use that option. While the pros are always the outcome that proves productive for your business. FBA or formally calling it fulfillment by Amazon is a nice option for sellers as it helps to get the much wanted “buy box” very quickly. But it is important to notice that it will charge you a fee for handling your inventory or processing your orders. It is necessary to figure out what you want to attain and at what cost before picking up such an option. The FBM or fulfillment by the merchant is a useful option when you want to process your orders on your own. So which is one is better Amazon FBA or FBM? Let’s find out

Fulfillment by the merchant is a good option as it gives you complete control over your business. You can visit www.olifantdigital.com to learn how it works for the sellers. Some more details are however discussed in the passage given below.

Factors That Need To Be Considered Before Using FBA Or FBM

Amazon FBA or FBM

Item size and weight

It is obvious Amazon offers to store and deliver your inventory at a certain rate. The smaller the size the lesser will be the fees. A similar notion applies to the weight, the lighter weight products are likely to incur a lesser amount of fees. Hence, it is easy to conclude that if you have small and lightweight products then you can afford to try the FBA. But FBM should be the first option if you are selling larger size items that are also heavier in weight.

Turnover rate

The size and weight of the product is not the only thing that matters when it comes to picking between the two kinds of fulfillment. The turnover rate has an impact on the costs as well. One can afford to use FBA if the turnover rates for one’s products is higher i.e. product stay in the warehouse for a shorter span. But if turnover is slow then it is good to consider using FBM.

Control over customer experience

Under FBA, Amazon will not only handle the storage and shipmen but also will take care of the customer experience. Seller finds a very less chance to interact with the customer after handing over the fulfillment task to Amazon. The FBM on the other hand provides complete control to the seller. One can manage all communication channels and can take care of the reviews by using FBM.

Seller rating and comments

Amazon asks the buyer to rate the seller and comment on the services after fulfilling an order. It is mandatory for every sale that takes place using either of the fulfillment methods. But it is vital to notice that since Amazon is handling the entire selling for you under the FBA so you are less likely to get any rating. Similarly, the comments will no longer belong to you, even though your product is being sold in the transaction. It is vital to mention here that seller rating is always different from the product rating or review.

Logistics and time

Logistics is a hectic process and it is always going to cost you time and hence money. One cannot afford to pack, store and ship items if there is no existing system in place. It is therefore always good to pick the FBA program when you are starting as a fresh seller on the platform. But it is also vital to consider costs e.g. if you are not selling swiftly at the start then you are likely to incur storage costs without making any profits.

Fees

Fees mean calculating your costs in monetary terms. One cannot afford fees beyond a certain limit even if incurring a specific cost proves productive in the longer run. One may not afford to exist till the longer run. Hence, it is always good to consider taking the fees into account before trying to use any of the specific fulfillment methods.

Try FBA and FBM alternatively

You might just have been thinking that can I try both at the same time. The answer is yes, you can try both of the fulfillment methods at the same time. You can select the methods for a certain period. It is also easy to sort the methods out for every different product you are selling on Amazon.

You can visit the website to know more about how these two factors work for the sellers.

Pros And Cons Of Using FBA

Pros:

  • Prime shipping – means your items are eligible for rapid home delivery.
  • Buy box – your items are likely to qualify for the buy box, a situation most of the sellers would like to have for their products.
  • Amazon SEO – Amazon’s search engine bots are likely to promote an item that is linked with the FBA program. Although it is not publicly stated items have been found promoted while linked with FBA.
  • Customer service – will also be handled by Amazon.

Cons:

  • Costs – that are likely to incur even when you are not earning a penny on sales.
  • Loss of control – you are unable to interact with the shoppers and know nothing that is returned or replaced.
  • Packaging and labeling will be required for every single item.

Pros And Cons Of Using FBM

Pros:

  • You can manage the order processing at the supplier as well as sales ends.
  • You are likely to incur fewer fees and hence a reduction in the costs.

Cons:

  • Less buy box power – means you will have to struggle a lot for qualifying for the buy box on Amazon.
  • No Amazon SEO perks – means you are less likely to be promoted organically.
  • Customer service and return responsibility will be placed on your shoulders.

Bottom Line: Amazon FBA or FBM?

You need to assess the situation before deciding on a specific mode of fulfillment. Pros and cons are associated with both different methods. But it will always depend on the business you are doing and the flow of your products. You can get benefitted from the FBA if you have smaller, lightweight products that are selling quickly. But FBM is good if you want to keep control over everything your business does on Amazon.

Also Read, Alibaba Going to make tuff Competition for Flipkart, Amazon & Snapdeal

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