Amazon has two storage and logistics services, on the one hand, we have Fulfillment By Amazon (Amazon FBA) and on the other, Fulfillment By Merchand (Amazon FBM
). The first is the service that allows Amazon sellers to send their inventory to Amazon warehouses and have them ship the products.
On the contrary, FBM is the method by which the seller himself takes care of all the logistics part. That is, they store and ship their orders to customers.
With the Amazon
program, Amazon charges sellers a fulfillment fee and a monthly fee for inventory storage. With the FBM model there is no type of fee since it is each seller who is responsible for storing and sending the items.
It should be noted that FBA shipments are those that have the signature of Amazon Prime since, when Amazon takes care of the shipments, it makes them in 24 hours. This is one of its main advantages. It will be up to each seller to decide what type of Amazon logistics and warehousing suits them best. Since it will depend on the type of business or product you have and the needs of these.
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Advantages and Disadvantages of Amazon FBA
One of the main advantages of Amazon FBA is that with this type of logistics you have the advantages of Amazon Prime. This allows you to take thousands more buyers, since customers usually opt for this type of shipments. It is very common for smaller sellers to start with this type of shipping to gain customers and sales.
The growth of the seller account that occurs with this option is much greater and faster than if he takes care of the shipment himself. This also translates into gaining positioning within the Marketplace, since the sales ratio affects the algorithm to position the brand and products.
On the other hand, it is true that for those sellers who are still very new to the platform it can be somewhat tedious to send to Amazon’s logistics warehouses. This is because they have to perform a series of steps that can be a bit complicated for someone who is not yet familiar with the Amazon Seller platform.
Even so, there are templates that can be very useful as well as tutorials to complete it. In summary, the advantages of using Amazon FBA are:
- Products within the Amazon Prime filter.
- You can forget about the storage and shipping of products.
- Better positioning within the platform.
- It helps in the growth and expansion of the account.
Advantages and Disadvantages of FBM
The other option, with FBM , means that the seller has facilities to manage inventory. In addition, you can choose the courier service that best suits your business needs or the type of product you send.
In this case it is also the seller who takes care of customer service, so you must commit to respond to messages and complaints in less than 24 hours and have a low percentage of defective orders.
It is the platform that sets requirements to be able to maintain quality standards of service, and it is the seller who is responsible and undertakes to comply with them. In summary, the advantages of using Amazon FBM are:
- Greater inventory control.
- Possibility to choose the shipping company you want.
- More independence in the processes.
- Direct contact with customers.
What type of FBA you should choose
As we have seen, both programs have their advantages. That’s why it’s important for each company to analyze their circumstances and be able to clearly determine what type of Amazon warehousing and fulfillment is best for them.
As a conclusion we can draw that for very new sellers the Amazon FBA option would be more interesting.
Both programs have benefits for sellers so each particular case must be studied. It is possible that someone who has been in the online business for a long time is more familiar with logistics and shipping, so they could use Amazon FBM.