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FBM or FBA

The goal of your Amazon business is to grow sales and improve your bottom line. The question is whether Fulfillment By Amazon (FBA) or Fulfillment By Merchant (FBM) is the best route for your business. When you first register as a seller on Amazon you can set up your account as an FBA or FBM. What many sellers do not realize is that you can actually register for both, which will double your exposure and sales opportunities.

Fulfillment by Amazon

Fulfillment by Amazon (FBA) is simply using the services provided by Amazon rather than your own resources. The program allows sellers to ship their merchandise to Amazon where items are stored in warehouses until thehttp://feedvisor.com/university/skins/common/images/button_bold.pngy sell.

When to choose FBA

FBA is better for:

  • High-volume accounts
  • Retailers prepared to drop the cost to the lowest possible profit point

Advantages to FBA

  • FBA Sellers almost always get the Buy Box, which is the ideal situation for any product
  • Amazon takes care of customer service and shipping
  • Conversions are generally higher because people trust Amazon to take care of them
  • They store the inventory for you and do the picking from their warehouses
  • Retail operation open 24/7
  • Much larger target audience
  • Comparatively shallow learning curve thanks to a plethora of support materials available on the internet
  • Super Saver and Amazon Prime Membership shipping benefits
  • Simplified returns process
  • More free time to grow the business
  • Great for retailers selling large, heavy or low-priced items where packaging is labour intensive and independent shipping costs may be prohibitive

Fulfillment By Merchant

When to choose FBM

FBM is better for:

  • Exclusive products
  • Small volume or one-offs

Advantages to FBM

  • Seller maintains a sense of control over the business
  • Margins are greater
  • Opportunity to build an independent brand is more feasible
  • Less unavoidable losses due to changes in Amazon policies
  • Less paperwork, particularly when deal with non-sales-tax states
  • Freedom to run the business exactly as seller chooses
  • More control over your inventory
  • No unexpected costs
  • Easier to maintain both online and offline retail activity with one inventory