FBM vs FBA: Comparing FBM vs FBA – Which Method is Right for You?

February 14, 2024 Pros & Cons of FBM vs. FBA

As an Amazon seller, you have two primary options:

1) Use the Fulfillment by Amazon (FBA) program and pay Amazon.com, Inc. (“Amazon”) to store and ship your products to customers
2) Ship orders out yourself, which is known as seller-fulfilled or Fulfillment by Merchant (FBM).

A third option is to do some of both. Whatever your strategy, it should be reviewed from time to time to ensure it makes sense for your evolving business. Let’s look do a comparative analysis of FBM vs FBA.

FBM vs FBA: Comparing Amazon’s Fulfillment Methods for Sellers

FBM vs FBA

FBA

Amazon is proud of its FBA program and encourages sellers to use it to fill customer orders.

It’s a great service that takes a lot of the headache out of selling online, but there are some things to be aware of before you jump in. Here are a few points to consider:

Pros

    • Prime enrollment. This is one of the biggest benefits to FBA. As a third party seller using FBA, all your products are automatically enrolled in Amazon’s Prime program. It’s estimated that Amazon has 60 to 80 million Prime members who shop more frequently and spend more than non-Prime members.

    • Buy-Box wins. There are many factors that go into winning the Buy Box and fulfillment method is a big one. An FBA seller can generally price a little higher than an FBM offer and still hold the Buy Box.

    • Freed-up time. With FBA, Amazon takes on the task of filling your customer’s orders including customer service and returns. For some sellers, this is a big benefit. FBA allows you to focus your time and resources on growing your Amazon business, instead of spending it on the logistics of storing, packing and shipping your inventory to customers.

    • Lower shipping rates. It’s likely that the fees Amazon charges to ship your products are lower than what you would get through your own shipping account. If that is the case, using FBA will lower costs and increase your profit margin.

Cons

    • Complicated fees. Amazon charges different FBA fees, including fees for monthly storage, order fulfillment, pick-and-pack and weight handling. These fees vary depending on the size of your item and can be complicated to calculate on your own. Use the FBA revenue calculator or the Fee Preview report to determine what you are paying in fees for each of your products.

    • Long-term storage fees. Amazon does not want to store your goods indefinitely. Twice a year in February and August they will charge long-term storage fees for inventory older than 6 and 12 months. You will need to be aware of your inventory age and have a plan to sell through or remove your older inventory to avoid these penalty fees.

    • Limited access. If there are quality problems with your inventory or the wrong product is being sent out to customers, sellers are obviously not able to walk into the warehouse and review their inventory. You will need to either have it removed and shipped back to you, or rely on Amazon’s employees to double-check the product inside their fulfillment centres.

    • More complicated process. Preparing your inventory and sending it to Amazon fulfillment centres for FBA is a much more involved process with several steps and considerations to track.

Preparing your inventory and sending it to Amazon fulfillment centres

FBM

There are a number of reasons why sellers would choose FBM over FBA, but there are also contrary reasons. Here is a summary of the advantages and disadvantages:

Pros

    • More control. If you store and ship your inventory yourself, you will maintain hands-on access to your inventory whenever you need it.

    • Lower costs. Because Amazon’s fees are based on the size of the item, if you have a large item with small margins you will want to compare the costs of using FBA vs. handling fulfillment yourself. This is especially true for items that have a slower turn rate.

    • Faster turn rates. Going FBM for low-priced items under $6-$8 will keep them out of Amazon’s add-on program. This program is designed to save Amazon shipping and handling costs and requires that a customer purchase $25 worth of merchandise before Amazon will ship out an add-on item. This deters some customers, and you may find you can increase sales velocity by shipping these items yourself.

Cons

    • Required discipline. Amazon is fanatical about customer service and will penalize sellers for late and incorrect shipments. Without a strong, quality-controlled process, you will make mistakes. Those may lead to a lower seller-health rating, which affects how you show up in search and reduces your chances of winning the Buy Box. Too many errors and Amazon could suspend your seller account, even permanently.

    • Lower selling price. To win the Buy Box and compete with other FBA sellers, you may need to keep your sales price low. This will affect margins and could start a pricing war.


This article on FBM vs FBA presents just a few of the considerations that should go into choosing a fulfillment strategy. FBM vs FBA let you Compare the Amazon’s Fulfillment Methods for the Sellers.

Many Amazon sellers actually find that their strategy is neither 100 percent FBM or FBA, but a mix of both.

You should be aware of the pros and cons for each option, specifically the costs associated with them, for each of your products.

As your selling on Amazon business grows and evolves, continue to revisit your fulfillment options and make the best decision based on your business and your bottom line.

If you’re an Amazon wholesaler or one that’s just starting out, you can get a free quote from our team at AMZ PREP.

Not only do we provide the prep, pack, labeling, and shipping, but we also provide some of the most competitive pricing and are a full suite Canadian Amazon warehousing solution that helps you every step of the way when growing your wholesale business on Amazon.

FBM vs FBA: Which is better?

FBA is better for high volume, higher margin products where sellers don’t want to handle storing and shipping products.

FBM is better for smaller scale, small margin products or one-off products where the seller doesn’t mind storing and shipping products.

If you like having more control over your inventory then FBM is for you, however, if you like the idea of Amazon storing and dealing with returns, then FBA is the way to go.

Blair Forrest

Blair Forrest

Blair Forrest is the CMO of AMZ Prep. Blair helps provide consulting and guidance through our articles, guides, and other resources to help growing eCommerce & Amazon FBA businesses master their logistics and fulfillment.

Looking for a fulfillment solution?

60 thoughts on “FBM vs FBA: Comparing FBM vs FBA – Which Method is Right for You?

  1. I have joined your feed and look forward to looking for extra of
    your fantastic post. Also, I’ve shared your web site in my social networks.

  2. I am genuinely pleased to read this website posts which
    carries tons of valuable information, thanks for providing these kinds of information.

  3. You’re so awesome! I don’t suppose I’ve read through something
    like this before. So good to find somebody with some unique thoughts on this topic.

    Seriously.. many thanks for starting this up.
    This site is something that’s needed on the internet, someone with some originality!

  4. Heya i’m for the primary time here. I came across this board and I find It really helpful & it helped me out
    much. I’m hoping to present one thing again and help others such as you aided me.

  5. Since the admin of this web page is working, no doubt very quickly it will
    be well-known, due to its feature contents.

  6. It’s amazing in favor of me to have a web site, which is valuable in favor of my experience.
    thanks admin

  7. Hmm is anyone else experiencing problems with the images on this blog loading?
    I’m trying to figure out if its a problem on my
    end or if it’s the blog. Any feedback would be greatly appreciated.

  8. Hi there! I know this is kind of off topic but I was
    wondering which blog platform are you using for this website?
    I’m getting sick and tired of WordPress because
    I’ve had problems with hackers and I’m looking at alternatives for another platform.
    I would be awesome if you could point me in the direction of a good platform.

  9. Howdy! This article could not be written any better!
    Reading through this article reminds me of my previous
    roommate! He continually kept talking about this. I most certainly will send this post to him.
    Fairly certain he’ll have a very good read. Thanks for
    sharing!

  10. Hi there I am so thrilled I found your web site,
    I really found you by mistake, while I was searching on Bing
    for something else, Regardless I am here now and would
    just like to say thanks a lot for a fantastic post and a all round thrilling blog (I also love the theme/design), I don’t have time to read through it all at the moment
    but I have book-marked it and also included your RSS feeds, so when I have time I will be back to read
    much more, Please do keep up the great jo.

  11. I enjoy, result in I discovered just what I was having a look for.
    You’ve ended my 4 day long hunt! God Bless you man.
    Have a nice day. Bye

  12. Definitely imagine that which you said. Your favourite justification appeared to be on the net
    the simplest factor to take into accout of. I say to you, I certainly get irked
    while people think about issues that they just don’t recognise about.
    You managed to hit the nail upon the top and outlined out the entire thing without having side effect , folks can take a
    signal. Will likely be back to get more. Thanks

  13. Hello! This is my first comment here so I just wanted to give a quick shout out and tell you I genuinely enjoy reading your articles.
    Can you recommend any other blogs/websites/forums that go over the same subjects?
    Appreciate it!

  14. Everything is very open with a precise description of the issues.
    It was really informative. Your site is very helpful. Many thanks for sharing!

  15. Exceptional post however , I was wanting to know
    if you could write a litte more on this topic? I’d be very
    grateful if you could elaborate a little bit further.
    Kudos!

  16. naturally like your web site however you need to take a look at
    the spelling on quite a few of your posts. A number of them are
    rife with spelling issues and I find it very troublesome to inform the
    reality nevertheless I will certainly come back again.

  17. You really make it seem so easy along with your presentation but I to find this matter to be actually one thing that I think I would by no means
    understand. It sort of feels too complicated
    and very huge for me. I’m having a look forward to
    your next put up, I’ll try to get the hold of it!

  18. I do not know if it’s just me or if perhaps everyone else encountering
    problems with your blog. It appears as if some of the text within your posts are running off the screen. Can somebody else please provide feedback and let me know if this is happening to them as well?
    This may be a problem with my internet browser because I’ve had
    this happen previously. Appreciate it

  19. Simply wish to say your article is as astounding. The clarity on your publish is
    simply cool and i could suppose you’re an expert on this subject.
    Well along with your permission allow me to grasp your RSS feed to stay updated
    with coming near near post. Thank you 1,000,
    000 and please continue the gratifying work.

  20. Oh my goodness! Incredible article dude! Many thanks, However I am experiencing issues with
    your RSS. I don’t understand why I am unable to join it. Is there anybody
    having similar RSS issues? Anybody who knows the solution can you kindly respond?
    Thanks!!

  21. I don’t know whether it’s just me or if perhaps everybody else experiencing issues with your website.
    It appears as though some of the text in your content are
    running off the screen. Can someone else please comment
    and let me know if this is happening to them as well?
    This might be a problem with my internet browser because I’ve had
    this happen previously. Thanks

  22. This is really interesting, You are a very skilled blogger.
    I have joined your rss feed and look forward to seeking more of your fantastic
    post. Also, I have shared your site in my social networks!

  23. Have you ever considered publishing an e-book or
    guest authoring on other blogs? I have a blog centered on the same information you discuss and would
    really like to have you share some stories/information. I know my subscribers would
    appreciate your work. If you’re even remotely interested, feel free to
    send me an e-mail.

  24. My spouse and I absolutely love your blog
    and find the majority of your post’s to be what precisely
    I’m looking for. Would you offer guest writers to write content in your case?
    I wouldn’t mind composing a post or elaborating on a few of the subjects you write in relation to here.
    Again, awesome website!

  25. Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something.
    I think that you could do with a few pics to drive the message home a little bit,
    but instead of that, this is fantastic blog. A great read.
    I’ll definitely be back.

  26. I don’t even understand how I stopped up right here, but I believed this
    post was good. I don’t recognise who you’re
    however certainly you are going to a well-known blogger should you aren’t already.
    Cheers!

  27. Hello to all, how is the whole thing, I think every one is getting more from this website, and your views are nice in favor of new
    visitors.

  28. I’m truly enjoying the design and layout of your site.
    It’s a very easy on the eyes which makes it much more enjoyable for me to come
    here and visit more often. Did you hire out a developer to create
    your theme? Superb work!

  29. It’s amazing to pay a quick visit this website and
    reading the views of all colleagues concerning this paragraph, while I
    am also eager of getting knowledge.

  30. Incredible! This blog looks exactly like my old one! It’s on a totally different subject but it has
    pretty much the same layout and design. Superb choice of colors!

  31. Good day! This is my first comment here so I just wanted to give a quick shout
    out and tell you I really enjoy reading through your blog posts.
    Can you suggest any other blogs/websites/forums that deal with
    the same subjects? Thanks a ton!

  32. Thank you for sharing your thoughts. I really appreciate your efforts and I will be
    waiting for your further write ups thank you once again.

  33. Howdy! This post could not be written much better!
    Reading through this post reminds me of my previous roommate!
    He continually kept preaching about this. I’ll forward this article
    to him. Fairly certain he will have a great read.
    Many thanks for sharing!

  34. My brother recommended I might like this website. He was entirely right.
    This post actually made my day. You can not imagine just
    how much time I had spent for this info! Thanks!

  35. Appreciating the hard work you put into your site
    and detailed information you provide. It’s great to come across a blog every once in a
    while that isn’t the same outdated rehashed material.
    Fantastic read! I’ve bookmarked your site and I’m including
    your RSS feeds to my Google account.

  36. Hi! Would you mind if I share your blog with my twitter group?

    There’s a lot of people that I think would really appreciate your content.
    Please let me know. Cheers

  37. Nice blog here! Also your site loads up fast! What web host are you using?
    Can I get your affiliate link to your host? I wish my web site loaded up as fast as yours lol

  38. I’m not that much of a online reader to be honest but your
    sites really nice, keep it up! I’ll go ahead and bookmark your website to come back down the road.
    Cheers

  39. Its like you learn my thoughts! You seem to know so
    much approximately this, like you wrote the ebook in it or
    something. I believe that you just can do with a few p.c.
    to drive the message home a bit, however other than that,
    this is wonderful blog. A fantastic read. I’ll certainly be
    back.

  40. Hello! Would you mind if I share your blog with my zynga group?
    There’s a lot of folks that I think would really enjoy your content.
    Please let me know. Cheers

  41. Thank you for consistently going above and beyond with your blog. Wishing you all the best and looking forward to your next piece of captivating content.

  42. Howdy just wanted to give you a quick heads up. The words in your content seem
    to be running off the screen in Safari. I’m not sure if this is a format
    issue or something to do with browser compatibility but I
    figured I’d post to let you know. The style
    and design look great though! Hope you get the issue fixed soon. Thanks

  43. Pretty nice post. I just stumbled upon your blog and wished to say that I have truly enjoyed browsing your blog posts.

    In any case I will be subscribing to your feed and I hope you write again very
    soon!

  44. You brought up some points I hadn’t considered before, and it’s cool how your insights are making me see things from a new perspective.

  45. Your way of breaking it down made it so easy to understand, even for someone like me who’s not an expert in the subject.

Leave a Reply

Your email address will not be published. Required fields are marked *