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What is Amazon FBA and FBM?




What is Amazon FBA and FBM? Which is Better?

Amazon offers sellers the opportunity to deliver their products to customers through different logistics methods. The most popular of these methods are FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) . Here is a detailed explanation of these two systems and their differences:

Amazon FBA (Fulfillment by Amazon)

FBA is a service model where logistics processes are managed by Amazon. As a seller, you send your products to Amazon's warehouse and Amazon handles the rest.

Advantages of FBA:

  1. Access to Amazon Prime: Your products are displayed with the Prime tag, which attracts more customers thanks to the fast delivery advantage.

  2. Warehousing and Logistics: Amazon stores, packs, and ships your products to customers.

  3. Customer Service: Returns and customer questions are managed by Amazon.

  4. Visibility: FBA products have a higher chance of appearing on Amazon.

Disadvantages of FBA:

  1. Cost: You pay Amazon for warehousing and logistics services.

  2. Lack of Control: Logistics processes are completely under Amazon's control.

  3. Long Term Storage Fees: Additional fees are charged for products that remain in the warehouse for long periods of time.

Amazon FBM (Fulfillment by Merchant)

FBM is a service model where logistics processes are completely managed by the seller. As a seller, you store your products in your own warehouse and ship them to customers yourself.

Advantages of FBM:

  1. Cost Control: Since you manage your own storage and shipping processes, you can better control your logistics costs.

  2. Product Control: You can directly manage stock, packaging and shipping processes.

  3. Low Commissions: You don't pay extra fees to Amazon for shipping.

Disadvantages of FBM:

  1. It Takes Time and Effort: Organizing logistics processes can be time-consuming.

  2. Competitive Disadvantage: Your products may be less attractive to customers because they do not carry the Prime label.

  3. Customer Service: You must deal with returns and customer requests individually.

Differences Between FBA and FBM

Feature

FBA

FBM

Storage

Amazon warehouses are used.

You use your own storage.

Transfer

Amazon ships.

Seller ships.

Customer service

Amazon manages it.

The seller manages.

Access to Prime

Yes

No

Cost

Storage and logistics costs are high.

It is lower but has a time cost.

FBA or FBM: Which is Better for You?

Your business model, product type and goals are important when making your choice:

  • Choose FBA If:

    • If you want to reach a large customer base that wants fast delivery.

    • If you don't want to spend time on logistics processes.

    • If your products are fast-selling, small in size, or high in price.

  • Choose FBM If:

    • If you want to manage your business with lower budgets.

    • If you cater to a niche market and want to manage customer service yourself.

    • If you sell large and heavy items (FBA charges a high fee for these items).

Conclusion

FBA and FBM offer advantages that suit different business models. If you aim to reach a wide audience and lighten your logistics burden, you can choose FBA. However, if you want to keep costs under control and have more say in logistics processes, FBM may be more suitable for you.

You can achieve success on Amazon by choosing the model that suits your business needs! 😊

 
 
 

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