Understanding how to ship out and distribute your brand’s product can be a handful. Using a fulfillment solution like Shipfusion frees you from navigating the shipping and receiving landscape with zero stress. Below are some insights on the difference between FBA and FBM.
Looking to start your eCommerce business and get products moving online? Amazon is a great place to start with over 200 million visitors per month. If you choose to sign up to Amazon as a seller you have two options when it comes to fulfillment; FBA and FBM, each option comes with its own pros and cons– don’t worry we are here to help you sort it out!
What’s the main difference between FBA and FBM?
Fulfillment By Amazon (FBA): This is a method of selling on Amazon where a seller (or a seller’s supplier) sends their products directly to Amazon’s warehouses. Amazon will store your inventory and ship it directly to the customer (often through their 2-day Prime shipping). Amazon will also manage all the customer support on the order.
PROS OF FBA: Not every seller has the bandwidth to tackle the trickier aspects of fulfillment, like customer service, returns, and shipping. Delegating these key duties can be especially beneficial for eCommerce beginners. You are more likely to use FBA if; the products you sell are small, you feel comfortable giving control to Amazon, you are ready for Amazon to handle your customer service and you do not have any logistics put in place.
CONS OF FBA: There are several cons when choosing to use Amazon’s fulfillment program. Poor branding is one of them, Amazon is covering so many fulfilment options and your business has to work with standardized protocols set in place by Amazon. All packages will look like every other Amazon order so customers correlate their purchase with an Amazon purchase not a purchase from your company, removing brand recognition.
Fulfillment By Merchant (FBM): A method of selling on Amazon in which a seller lists their products on Amazon, but manages all storage, shipping, and customer support themselves (or through another third-party like Shipfusion).
PROS OF FBM: Looking for more control than letting Amazon control all aspects of your Business? You will most likely want to look into choosing your own fulfillment strategy like Shipfusion. Choosing your own fulfillment program can help you better organize and create your brand development. You are more likely to use FBM if; you want more control over your customers, customer service practices are in place, you already have a basic logistics program, you have a budget for a fulfillment solution and your inventory turns over quickly.
Cons of FBM: More responsibility is needed on the fulfillment side including; customer support services, missing packages and creating your own review and rating strategy.
Factors you should consider before you select a fulfillment program:
- Product size and weight
- Scalable customer service
- Seller feedback
- Inventory turnover rate
- Expenses and fees
Shipfusion sets your business on autopilot and combines flexible, reliable fulfillment with powerful, real-time technology. Shipfusion has multiple fulfillment centers across the US and Canada– making it easy to manage your eCommerce business. For more information on how to set your business on autopilot, contact one of our fulfillment specialists today.