FBA vs. FBM: Choosing Your Amazon Fulfillment Method

When it comes to Amazon, choosing your fulfillment method can make or break your brand. Everything from profitability, customer satisfaction and product availability on Amazon are affected by fulfillment. To help you get your fulfillment strategy in place, we’ve compiled this resource with everything you’ll need to know about your options. 

Fulfilled by Amazon (FBA) Fulfillment

FBA is the most common method of fulfillment on Amazon in which Sellers ship in FBA inventory directly to Amazon. Amazon then handles everything from customer fulfillment to storage to customer service and returns. Here are some reasons why you may want to consider FBA:

• If your products are not oversized or shipping costs are more efficient than what you can negotiate on your own for 2-day shipping, FBA might be for you.
• If you are unable to manage fulfillment on your own and offer fast shipping.
• If you want to handle customer service and returns on your own due to the nature of your product.
• If you have a good handle on your flow of inventory with products consistently selling through available volume.
• If you have the bandwidth and resources in place to store and pick & pack inventory.
• If you are not concerned with the amount of time it takes to ship in inventory before starting.
• If you have a resource who can carefully oversee inventory and handle replenishments.
  

Fulfilled by Merchant (FBM) Fulfillment

FBM is not as widely used on its own as FBA, but is a solid alternative that gives companies flexibility which have certain business needs. When merchants fulfill Amazon orders themselves, they are accountable for picking, packing, storing, shipping, providing tracking, and handling customer service and returns. If your business falls within the following criteria, FBM may be a good fit for you:

• If your products are oversized and will not be profitable using FBA fulfillment.
• If your distribution center is centrally located and can offer fast, 2-day (or faster) shipping. 
• If you prefer to handle your customer service and returns in house.
• If your products do not sell consistently or you aren’t certain how a product will perform.
• If you have the bandwidth and resources to store and pick & pack inventory.
• If you want to start selling immediately and would prefer not to wait to ship in FBA inventory.
• If you have a resource that can oversee all Amazon order fulfillment and tracking.

FBA & FBM Hybrid Fulfillment

The second most popular method is actually a hybrid of both fulfillment options offering companies the most flexibility. This is ideal for companies who have a mix of the above-mentioned specifications or find themselves falling within the following categories:

• If your product costs are similar regardless of whether you fulfill via FBA or FBM.
• If some of your products are proven best sellers on Amazon with steady sales while other products do smaller, less consistent volume.
• If you are encountering issues with FBA inventory limits and can’t keep items in stock.
• If products are running out of stock, FBM can be used as a backup offer to take over buybox whenever FBA runs out and ensure you never go out of stock.
• If you have inventory on hand and can handle fulfillment, but prefer to open up bandwidth by moving best sellers to FBA.

When determining your fulfillment strategy there is a lot to consider, but one of the key drivers that plays a role in all three of the primary methods is profitability. For a quick and easy assessment of your potential FBA fees, try using Amazon’s FBA Calculator to better gauge which group your products fall within.