FBA vs FBM

Still confused between FBA vs FBM? 

This GUIDEBOOK and comparison give you answers to all questions. Our logistics experts have compiled this comparison to make your decision easier. You get tips for shipping to Amazon FBA to SAVE COSTS. 

Don’t skip and keep reading about this comparison. You make a sound decision for maximum profitability in the Amazon marketplace. 

What is FBA?

FBA stands for Fulfillment by Amazon. There are various Amazon fulfillment centers across the country. Amazon FBA Sellers store and manage inventory in Amazon’s warehouses. Amazon pack and ship orders to CUSTOMERS. 

Amazon charges some fees and manages all inventory operations. It automates the whole shipping process. The FBA seller saves time, resources, & energy and invests them in expansion. Amazon’s logistics infrastructure is efficient and far more PRODUCTIVE.

What is FBM?

FBM stands for fulfillment by the merchant. Amazon sellers manage their inventory and shipping operations independently. They process their shipments and order without Amazon’s help. 

Sellers pack and ship their orders and update their tracking ID in Amazon’s system. It is not as automated as Amazon fulfillment is. Yet, sellers save storage and shipping costs as compared to FBA. They must invest time, energy, and RESOURCES to manage these operations.

Pros & Cons of Amazon FBA

Amazon FBA has pros and cons, like any business. Look at these points before choosing FBA: 

Pros:

• Automation: FBA gives automation of shipping operations. Amazon packs and ships your orders to customers and updates their TRACKING. You focus on selling, while Amazon focuses on inventory flow. 

• Prime shipping: FBA listing has Amazon prime badge. Prime shipping is the fastest shipping option. Amazon Customers tend to buy products with PRIME SHIPPING. 

• Less hassle: You don’t need to care about inventory management. You just have to ship your inventory to Amazon centers. NO HASSLE! 

• More visibility: Amazon earns more with FBA products, so they give more VISIBILITY to them. Also, the Prime shipping tag gives more visibility and boosts sales. 

Cons:

• High Monthly storage fees: Amazon has high storage fees. Also, in peak seasons, Amazon limits the storage units. Storage fees are an extra burden if you don’t have continued sales. 

Pros & Cons of Amazon FBM

Merchants use their own resources in this FULFILLMENT OPTION. It has a few advantages and disadvantages. Here are the pros and cons:

Pros:

• Convenient: You pack and ship independently. CHOOSE any courier service while shipping orders. Easy to manage everything according to your budget and timeline.
• More profit margin: You don’t face high storage fees from Amazon and save on LONG-TERM storage fees. No need to pay Amazon to fulfill orders. Choose your own shipping company. 
• More control over inventory:  You handle and manage your inventory. Amazon DISCARDS your damaged products. But you repair them and sell them as second-hand products. 
• Amazon Seller fulfilled prime: FBM seller gets FBA benefits without paying high fees. This FULFILLMENT method provides access to prime customers. 

Cons: 

• Buy Box: Only one seller wins the buy box. You compete with other sellers. Amazon considers the SHIPPING SERVICES while choosing a winner. FBM sellers have less chance of winning. 
• More hassle: It’s a time and energy-consuming process with more hassle. 

What’s the difference between Amazon FBA and FBM?

Here is FBA vs FBM comparison with every point you should consider:

1. Fulfillment Process:

In FBM and FBA main difference is fulfillment. FBA uses amazon’s fulfillment centers network. Amazon provides LOGISTICS and courier services, which result in fast shipping. 

Most Customers purchase products with FBA prime shipping due to fast shipping. Conversely, the merchant-fulfilled network is less efficient than Amazon.

2. Fees:

FBA fees are high for every unit that sells. It also has high storage fees. Yet, FBM has just 0.9$ fee on every single unit that sells. Also, some monthly SUBSCRIPTIONS for pro sellers. Non-FBA sellers have better profit margins for the same product. They come with the hassle of their own logistics support.

It gives you more BUDGET for marketing and branding.  FBM sellers don’t face huge storage costs and fees. If they are starters, they store inventory in their house or cheap warehouse. 

3. Automation and customer support:

FBA has complete automation in fulfillment. Amazon PICKS, PACKS, and SHIPS your orders. They update your inventory and tracking. You have to focus on front-end operations like marketing. 

Amazon handles most of the customer support. FBM sellers have to handle all the customer support and FULFILLMENT. It is time taking.

Which is better: FBA vs FBM?

Everyone has different preferences when choosing the right business model. Here we give you an overview according to every single point. 

• Profitability: Seller pays FBA fees on every unit, which results in low-profit margins. Yet, it is easy to scale and turn GOOD PROFITS into more sales. 

FBM is profitable when sales are low due to LESS WORK for inventory management. It can turn into an unsolved mess without proper management. 

• Beginner friendly: FBM sellers don’t need to buy a certain number of units. You list your products with available inventory and can start selling. No barrier and no hassle to send inventory to Amazon warehouses. 

So FBM is friendly, for starters. Yet, in FBA, you need to send a certain INVENTORY LEVEL. You pay a storage fee if your units are not selling. 

• Easy to expand: FBA has automation and less hassle. Amazon handles your operations. It is easy to expand with AUTOMATION if you compare FBA to FBM.

FAQs about FBA vs FBM

What’s Next

These two fulfillment methods (FBM or FBA) need proper shipping plans. You can’t excel in the Amazon business model without an OPTIMIZED shipping process. In FBM, you have more workload. 

Branding and inspection need more time and effort. Still, a proper dedicated resource saves you time and energy. LEELINE has been helping Amazon sellers for years. We automate all your shipping processes at cheap rates. 

Get Free consultation from our representative. CUSTOMIZE your shipping plan according to your needs. Saves your time and energy from hectic shipping operations.