To FBA or FBM, that is the Question… If you’re a seller on Amazon, you’re probably familiar with these two terms – FBA and FBM. But which one is right for you? As we hum along in 2023, it’s essential to understand the different Amazon fulfillment strategies to make the right choice for your business.
So, what exactly are FBA and FBM? In short, FBA (Fulfillment by Amazon) means that Amazon takes care of the storage, packing, and shipping of your products, while FBM (Fulfillment by Merchant) means that you handle all of these aspects yourself. Each option has its advantages and disadvantages, and we’ll be exploring these in detail in this episode.
With FBA fees increasing every year, sellers are asking the ONE question, why can’t I just do FBM? It costs less, and it’s less headache.
But don’t make the switch just yet, we may have a lot of complaints about FBA, but there’s a reason why it’s so popular.
If you’re looking to expand your Amazon business or just starting, you won’t want to miss out on this value-packed episode.
So, let’s get started!
The FBA Advantage
Amazon FBA is a fulfillment option in which Amazon stores and ships products on behalf of third-party sellers. When a seller uses Amazon FBA, they send their products to Amazon’s fulfillment centers, where they are stored, picked, packed, and shipped to customers.
One of the greatest benefits of FBA is access to Prime members. Statistics show that there are more than 265 million Prime members and 80% of them filter listings by free 2-day shipping. That’s not all; Prime members spend 3 to 4 times more than nonmembers.
For these reasons, all new sellers who are entering the Amazon platform with a product eligible for FBA, then you have to do it. You can’t afford this segment of the market.
“Faster delivery has been proven again and again that it works. It leads to a much, much higher conversion rate in sales if you did next-day delivery.” Jason Boyce
Amazon FBA vs FBM vs SFP
When deciding between Amazon FBA and FBM, sellers should consider their sales volume, product margins, and their ability to handle fulfillment. Amazon FBA is a better option for high-volume sellers with products that are eligible for Prime shipping, while FBM may be a better option for sellers with low-volume or high-margin products.
Amazon FBA and SFP both offer Prime eligibility, but SFP allows sellers to maintain control over their inventory and has lower fees. However, with SFP, sellers are responsible for the strict fulfillment requirements, which is a huge challenge for many sellers.
But that’s not all, in this episode, Shannon and I discuss more the pros and cons of each, the mythological SFP (Seller Fulfilled Prime), and why having the Prime Badge can increase your sales exponentially.
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