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. 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 directly to its customers, once sold.
- Amazon charges a fulfillment fee from the seller and monthly inventory storage fee according to the standards and guidelines. All the returns are handles by Amazon itself.
- FBA registered sellers are eligible for winning the buy box and Amazon Prime membership. Best customer service is provided by Amazon on your behalf to your customers.
- 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. 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.
- For cases when a seller drop-ships, FBM is far more convenient because you don’t have to pay the unnecessary inventory storage fee to Amazon and you are in charge of the inventories. You can directly procure it from vendor and ship it to the customer.
- FBA registered sellers are eligible for SPF (Seller Fulfilled Prime) membership and they also pay less fee to Amazon and thus can claim to higher margins on their products.