Your Guide to Amazon FBM vs. FBA

Your Comprehensive Guide to Amazon Fulfillment Options

Even if you don’t currently sell on Amazon, understanding how Amazon operates is incredibly useful for every eCommerce merchant.

In this article, we’ll explore Amazon’s two fulfillment options: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). We’ve tapped the expertise of Mike from Remix Logistics to provide insights and recommendations to help you make the right choice for your eCommerce business.

Fulllment by Amazon (FBA)

Fulfillment by Amazon (FBA) is like having Amazon as your dedicated fulfillment partner. They handle everything for you, including picking, packing, shipping, order returns, and customer service.

FBA Pros:

  1. Hands-off Fulfillment: Amazon takes care of inventory storage, packing, shipping, and even customer inquiries. It’s truly hands-off.
  2. Eligibility for Prime Shipping: Your products become eligible for Amazon’s Prime Program, offering Prime members free same-day or two-day delivery.
  3. Buy Box Advantage: Products listed under FBA often get priority in winning the Buy Box, leading to increased sales.
  4. Lower Shipping Costs: FBA benefits from Amazon’s discounted shipping rates, reducing your shipping expenses.
  5. Multi-Channel Fulfillment: You can use Amazon’s extensive fulfillment network to ship products from your various e-commerce sites.

FBA Cons:

  1. Additional Fees: FBA involves fees like fulfillment, prep, labeling, inventory, and long-term storage fees.
  2. Limited Inventory Access: Your inventory is stored in Amazon fulfillment centers, limiting your direct access.
  3. Stringent Prep and Labeling: Products must meet strict Amazon standards, requiring proper preparation and labeling.

Fulfillment by Merchant (FBM)

Fulfillment by Merchant (FBM) puts you in control of handling everything, including shipping, customer service, and storage.

FBM Pros:

  1. Faster Product Listing: You can list your products on Amazon immediately without waiting for fulfillment center approvals.
  2. More Inventory Control: With FBM, you manage your inventory directly, giving you better insights.
  3. Reduced Amazon Fees: You avoid storage and fulfillment fees, although there are closing and referral fees.
  4. Personalized Packaging: Include personalized messages to enhance customer relationships.
  5. Expanded Business Opportunities: FBM opens doors to Amazon sales if you’re already experienced in handling shipping and packaging.

FBM Cons:

  1. Additional Responsibility: You’re responsible for daily operations, including returns and customer service.
  2. Limited Prime Eligibility: Without Prime, you miss out on customers who prefer Prime shipping.
  3. Challenging Buy Box Access: FBM sellers find it challenging to win and retain the Buy Box.
  4. Overhead Costs: While you save on Amazon fees, you incur costs for storage, logistics, and shipping.
  5. Lower Selling Price: To compete effectively, you may need to lower your prices, impacting margins.
  6. Reduced Conversion Rates: Without FBA, you may experience lower conversion rates, potentially losing sales.

The Remix Logistics Recommendation

In most cases, Fulfillment by Amazon (FBA) is the better option. It’s more profitable in the long term, and it significantly boosts your sales potential. As Mike, the Amazon expert, puts it, “When we convert clients from FBM to FBA, we see traffic and sales double. It’s a no-brainer.”

However, dealing directly with Amazon can be complex. They prioritize their profits, not yours. That’s where Remix Logistics comes in. We’ve created foolproof processes optimized for Amazon-compliant shipments. Our prep fees are significantly lower than Amazon’s. Plus, we can seamlessly switch to FBM when FBA stock runs out, ensuring your products keep moving.

Mike adds, “Making mistakes with FBA prep will cost you THOUSANDS in expenses. That’s why we use Remix Logistics. Their team knows exactly how to prep FBA shipments, saving our clients both TIME and MONEY.”

So, if you want Remix Logistics to help you set up your FBA, click here.

Looking for an expert to enhance your Amazon game? Reach out to Mike at Remix Logistics.

Meta Description: Explore the pros and cons of Amazon FBA and FBM fulfillment options. Discover why FBA is often the best choice for eCommerce success.