Resources - Playbooks
Amazon FBA, FBM, SFP: Which Is Right for You?
Stay on top of the latest e-commerce and marketplace trends.
50% of Amazon sellers utilize FBA as their primary fulfillment method, but just 24% use a combination of FBA and a merchant-fulfilled method such as FBM or SFP.
From inventory fulfillment and supply chain logistics to adhering to Amazon’s evolving marketplace policies and restrictions, selling on Amazon requires extensive bandwidth and continuous strategy optimization.
Given the current e-commerce landscape amidst the COVID-19 global pandemic, now more than ever, it is important to incorporate a revisit to your Amazon fulfillment method into your quarterly business practice to sustain your sales velocity and avoid potential negative customer experiences, product stockouts, or late deliveries.
Amazon recently suspended inventory shipments of nonessential products to its Fulfillment by Amazon (FBA) fulfillment centers for its U.S. and EU markets in response to the substantial spike in orders related to the COVID-19 crisis. The suspension has been extended indefinitely and, as Prime orders continue to overwhelm Amazon’s marketplace, delivery windows are widening, causing frustration among consumers and merchants alike.
Some sellers have even reported that, in an effort to reduce the number of goods shipping from its warehouses, Amazon is reducing the Buy Box share for FBA merchants, giving Fulfillment by Merchant (FBM) sellers greater Buy Box share than average. Plus, with heavy Prime delivery delays, consumers may no longer be seeking out the Prime badge on products but rather are looking specifically for the delivery date, which could be sooner for FBM products.
What are the benefits of FBA versus FBM or SFP? Are there risks associated with relying heavily on one Amazon fulfillment method over the other? As e-commerce plays a growing role in consumers’ lives, having a diversified fulfillment strategy is increasingly important to keep up with growing demand and ultimately scale your business.
In this playbook, our Amazon experts have curated an extensive resource for you to reference when determining if you need to make a change to your fulfillment method as well as the specific skills you need to execute the transition without impacting your bottom line.
What Will You Learn in the Playbook?
- The key differences and benefits of FBA, FBM, and SFP
- A breakdown of how many Amazon sellers are utilizing each fulfillment option
- Products with proven success rates with each fulfillment method
- Overviews of specific FBA programs such as FBA Small and Light
As your business scales and changes over time, revisiting your fulfillment method will allow you to uncover any previous blind spots and generate additional product exposure and sales opportunities. Some key factors to consider are the size of your operation, your forecasted growth potential, and your product categories, among others as outlined in this playbook.
Given that your fulfillment method can impact high-stakes variables such as your Buy Box share and overall account health, it is not a decision — or transition — to be taken lightly. It also may be in your favor to balance multiple fulfillment methods, depending on the composition of your Amazon catalog. Reference the specific tips in this playbook to help you make a strategic, vetted business decision regarding fulfillment.
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