Below is a comparison of two Amazon fulfillment options, Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM), highlighting the strengths and limitations of each.
Fulfilled by Amazon (FBA)
- Ideal for sellers without fulfillment infrastructure: FBA is an excellent option for those who lack their own shipping networks or don’t have the capacity to manage logistics.
- Products needing fast delivery: Items that customers demand quickly, like seasonal products, perform well under FBA due to Amazon’s efficient shipping and Prime access.
- Prime Badge advantage: Products listed with the Prime badge can see a sales boost of 20–25%, making FBA more appealing for high-velocity items.
- Best for high-velocity products: Items selling at least 15–20 units per month are well-suited for FBA, leveraging Amazon’s fast shipping.
- Not ideal for certain products:
- Refrigerated items: FBA doesn’t support products needing refrigeration.
- Large, multi-box shipments: Items that ship in multiple boxes but are considered a single ASIN are not a good fit for FBA.
- Seasonal inventory management: Sellers can benefit from sending seasonal products to FBA, but they need to carefully manage stock levels to avoid overstocking or running out.
Fulfilled by Merchant (FBM)
- Heavy and bulky products: Items over 50 pounds may be more profitable with FBM since FBA fees can cut into margins for large products.
- Product testing: For items that sellers are unsure about in terms of sales velocity, FBM is a lower-risk option before fully committing to FBA.
- Lower-velocity products: Products that don’t sell at a fast rate are better suited for FBM to avoid long-term storage fees associated with FBA.
- Greater control over shipping: FBM allows sellers to have direct control over fulfillment, shipping, and packaging, making it more suitable for custom requirements.
Key Takeaways
- FBA is great for fast-moving, lightweight, and seasonal products where speed and the Prime badge can significantly boost sales.
- FBM is better for large, heavy, or lower-velocity products where the seller may benefit from handling their own logistics and testing products before scaling up with FBA.