When launching on Amazon, one of the most critical decisions is choosing between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Each model has its advantages and considerations that can significantly impact your operational costs and customer experience.
Understanding FBA (Fulfillment by Amazon)
With FBA, Amazon handles storage, packaging, shipping, and customer service for your products. This model offers several key benefits:
- Prime eligibility and faster shipping times
- Access to Amazon's world-class fulfillment network
- Simplified customer service and returns handling
- Multi-channel fulfillment capabilities
Understanding FBM (Fulfillment by Merchant)
With FBM, you maintain control over your inventory and fulfillment process. This approach works best for:
- Brands with existing fulfillment infrastructure
- Products with special handling requirements
- Businesses wanting more control over customer experience
- Lower-volume sellers managing costs
Cost Comparison
FBA typically involves higher per-unit fees but can lead to higher sales volume through Prime eligibility. FBM offers lower fees but requires investment in your own fulfillment infrastructure.
Making the Right Choice
Consider your product type, sales volume, operational capabilities, and growth goals when choosing between FBA and FBM. Many successful brands use a hybrid approach.