There are millions of sellers on Amazon across the globe, which is only increasing day by day. Amazon works hard, to not just providing the best user experience to the customers but also to the sellers who wonder day and night about starting their business and Amazon advertising. For their convenience Amazon came up with unique selling programs known as FBA and FBM.
As a seller you are free to choose from both, but before you start selling products on Amazon and start with ecommerce shopping campaigns, let’s understand the basic difference and pros and cons of both.
FBA (Fulfilled by Amazon)
FBA simply means that you sell it but Amazon does behind the scenes job. The seller sends the bulk inventory of the products at Amazon’s warehouse called Amazon’s fulfillment centers, and then Amazon will handle the picking, storing, packing and shipping of the products once sold.
Amazon charges a fulfillment fee from the seller and monthly inventory storage fee according to the standards and guidelines.
The advantages of FBA
- It’s Amazon who is in charge of picking, packing and shipping the products directly to the customers.
- Amazon handles the storage of inventory and manages the count of it.
- All the returns are handles by Amazon itself.
- Best customer service is provided by Amazon on your behalf to your customers.
- FBA registered sellers are eligible for winning the buy box.
- FBA sellers are eligible for Amazon Prime membership.
- With Amazon’s FBA you don’t have to be bound to a certain location. You can manage your business remotely from anywhere in the world.
FBM (Fulfilled by Merchant)
In FBM the seller lists the products he wants to sell on Amazon and then handles the storage, packing and shipping himself.
For cases when a seller drop-ships, FBM is far more convenient because you don’t have to pay the unnecessary inventory storage fee. You can directly procure it from vendor and ship it to the customer.
The advantages of FBM
- You are in charge of your inventories.
- You don’t have to pay the storage fee to Amazon.
- You don’t have to rely on Amazon’s packing or shipping methods. As a seller, it’s obvious that you want your products to reach safe and as it is to your buyers and might want to do it yourself with the utmost care and cautiousness.
- Sellers pay less fee to Amazon and thus can claim to higher margins on their products.
- FBA registered sellers are eligible for SPF (Seller Fulfilled Prime) membership.
If you are a new seller on Amazon, and you are not quite familiar with Amazon’s working ways, you can blindly go for Fulfillment By Amazon. And if you are a pro in selling online and you think you can handle everything on your won, you should go for Fulfillment by Merchant.
To sum it up, whether you are a registered FBA or FBM seller, there are pros and cons of both which ultimately only you have to decide. Hiring experienced and professional Amazon advertising consultant like Hike Commerce can give you a better clarity by weighing all the aspects of your business.