Amazon Fulfillment Services Comparison: FBA vs FBM
Quick Answer: Amazon offers two fulfillment methods — Fulfillment by Amazon (FBA), where Amazon stores, packs and ships your products, and Fulfilled by Merchant (FBM), where you handle storage, packaging and shipping yourself. FBA brings Prime eligibility and less hands-on work; FBM gives you more control and can cost less for large, slow-moving items.
Table of Contents
Choosing a fulfillment service is one of the most important decisions you must make when you start selling on Amazon.
Amazon offers two fulfillment methods: Fulfillment by Amazon (FBA) and Fulfilled by Merchant (FBM). Each option has pros and cons and will impact your profit margins, customer satisfaction, and ability to grow your business.
In this guide, we will give you a brief overview of the two Amazon fulfillment services, including their advantages.
What Is Amazon FBA (Fulfillment by Amazon)?
Under FBA, instead of handling individual customer orders, merchants send their inventory to Amazon’s fulfillment centers. Once an order is placed, Amazon’s fulfillment team picks the product from storage, packs it, and ships it to the customer.
Amazon also manages eligible customer service inquiries and returns associated with FBA orders. As a seller using Fulfillment by Amazon, you can concentrate on other aspects of your business, such as product development, marketing, and brand management.
Pros of Amazon FBA
Amazon FBA offers several benefits, particularly if you want to run an online store without worrying about setting up your own fulfillment operations.
Access to Amazon Prime Customers
One of the biggest advantages of FBA is eligibility for Prime shipping benefits. Having your product catalog available under Amazon FBA can therefore make your listings more attractive to customers who value convenience.
Less Time Spent Managing Orders
Inventory tracking and management can become increasingly difficult as your business grows. With FBA, Amazon handles much of the day-to-day fulfillment workload. Instead of spending hours worrying about order fulfillment, you can use that time to focus on marketing and developing new products.
Professional Shipping and Order Handling
Under Amazon fulfillment services, you get access to Amazon’s extensive fulfillment network designed to process and handle large numbers of customer orders. Access to these services and infrastructure allows you to benefit from Amazon’s established product fulfillment operations.
What Is Amazon FBM (Fulfilled by Merchant)?
Fulfilled by Merchant (FBM) is an Amazon fulfillment service that allows you, the seller, to manage storage, packaging, shipping, and delivery of customer orders yourself.
Unlike FBA, where products are stored in Amazon’s fulfillment centers, FBM sellers maintain control over their inventory and fulfillment operations. You can fulfill orders from your home, warehouse, or distribution center or rely on firms such as Packageman for third-party logistics.
Pros of Amazon FBM
FBM offers several benefits, especially if you prefer to maintain control over your fulfillment operations.
Greater Control over Inventory
The biggest advantage of using Amazon FBM is that you retain total control over your inventory. You determine where products are stored, how inventory is organized, and when stock is replenished.
This can come in handy if you operate other online stores on different platforms because you can monitor your inventory from a central location.
More Flexibility in Packaging
Using Amazon FBM also gives you more control over how products are packaged and presented to customers. This flexibility can help you strengthen your brand identity and create a more unique and personalized customer experience.
Potentially Lower Fulfillment Costs
FBM can be more economical for certain products, particularly large, slow-moving items. If you own a warehouse or have negotiated favorable shipping rates with a 3PL firm, you may be able to fulfill orders at a lower total cost than by using FBA.
