Amazon’s storage and fulfillment service, FBA (Fulfilled by Amazon), allows retailers to deliver products to an Amazon warehouse and have their orders dispatched by Amazon. FBM (Fulfilled by Merchant) is a fulfillment technique in which the seller is solely responsible for inventory storage and order fulfillment. Amazon charges a fulfillment fee and a monthly inventory storage fee when you use FBA. You can either store and ship things yourself or outsource fulfillment to a third-party (not Amazon) with FBM. If you don’t grasp the benefits and drawbacks of each application, deciding which strategy to use can be tough. You should know about the difference between fba and fbm. Sellers deliver inventory to an Amazon warehouse, and when an order is placed for their item on Amazon, Amazon fulfils the order automatically. Customer service and returns for that order will also be covered by Amazon.
Merchant fulfillment vs. Amazon fulfillment
Many Amazon merchants are changing their FBA listings to Fulfilled by Merchant to maintain COVID-19 online sales velocity. Think of Crucial, a company that sells replacement components. They want to be as diverse as possible; therefore they always do both FBM and FBA. Amazon Fulfilled by Merchant is frequently the fulfillment method of choice for new Amazon sellers, as well as those whose principal sales are done on their online store.
Amazon’s FBA fees are significantly higher than FBM’s. Sellers pay a monthly subscription charge, a minor cost per purchase made, and a referral fee for each order when using Amazon Fulfilled by Merchant. Amazon has a history of modifying its FBA criteria without providing sellers enough notice (and they get much higher during Q4). These standards can be difficult for Amazon sellers to meet. There are less rules and consequences with FBM for failing to meet their high Amazon Prime order standards.
Your brand takes a hit when you use Amazon FBA. Customers will receive an Amazon-branded box, not yours. Customers may associate your products with Amazon, and if problems arise, they will contact Amazon’s customer service. You can better ensure that you are offering the consumer experience you want when you utilize FBM for order fulfillment.
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The biggest disadvantage of Amazon FBM versus FBA is that it does not offer Prime-eligible products. The Amazon Prime benefit is that orders are delivered in two days. Long delays for non-essentials are still evident throughout the corona virus epidemic, and consumers do not want to wait more than a month.
FBA has essentially ideal numbers in all of these areas. When competing against FBM sellers, this means that using FBA considerably increases your chances of winning the Buy Box. It is difficult to run smooth shipping and warehousing company. Amazon already has a cutting-edge fulfillment infrastructure in place to quickly process and ship your items. In addition, because sellers do not need to increase employees or warehouse capacity as order volume changes, the FBA programme allows them to scale simply.