Fulfilled By Amazon vs Fulfilled By Merchant: How Are They Different?

Posted on 20 October 2021

Man packing shipment on the table

Let’s say you’ve started your own artisanal product business. Between listing products online, figuring out social media, buying materials, and bubble-wrapping every product that you ship, you’ve run out of time to make the gorgeous items you’re known for.

There are often big questions and concerns when owning a business that operates internationally, like “What does customs cleared mean” or “What is Importer Of Record?” Amazon Marketplace must answer these questions, on top of making several important choices. For example, choosing your fulfillment method and external suppliers will impact how you run your business. For most sellers, the choice lies between Fulfillment by Amazon vs. fulfillment by Merchant. These are commonly known as FBA and FBM:

Fulfilled by Amazon – So, how does Amazon FBA shipping work? With FBA, you ship your products to an Amazon warehouse and Amazon employees handle order fulfillment and customer service. Amazon fulfillment includes picking, packing, and shipping your orders, as well as managing returns for Amazon shoppers.

Fulfilled by Merchant – So, how does Amazon FBM shipping work? Under FBM, you arrange for storage of your products and handle the order fulfillment and customer service process yourself.

How Do I Decide Between Amazon FBA And FBM?

As with any business decision, you need to calculate which approach makes the most financial sense for you. Since there are such a variety of product types, package sizes, shipping methods, and inventory demands, there is no one-size-fits-all solution to the FBA vs FBM question. Consider: 

Keep in mind that you don’t need to make a permanent decision at any one time. Some business owners start with FBM and move to FBA as their business scales up or claims more of their attention for strategic management. 

Another factor that adds flexibility to this decision is the ability to use both methods. The categorization of FBA vs FBM rests at the product level rather than being a single option for a seller’s entire stock.1

What Are The Pros And Cons Of Amazon FBA?

There are some bright and shiny benefits to the FBA program, but keep reading to get a complete picture before you decide. 

Amazon FBA pros include:

Many factors are at play in deciding who wins the buy box, but which fulfillment method is used by a seller is one of the most important. Even if an FBM seller’s price is slightly lower, an FBA seller is likely to still win the buy box—which is a huge selling advantage.

Amazon FBA cons include:

What Are The Pros And Cons Of Amazon FBM?

Are you leaning toward rolling up your sleeves and doing it yourself? Let’s take a look at both sides of choosing FBM. 

Amazon FBM pros include:

Amazon FBM cons include:

When Should I Use FBA?

Nothing comes for nothing, but there are many benefits to going the FBA route as an Amazon seller. 

Amazon FBA is likely your best bet if you: 

When Should I Use FBM?

If you’ve read this far, you probably have a good idea of which solution you’re leaning toward. But as always: do the math. Go with FBM if: 

Ready To See Where FBA Can Take You?

The pros and cons above are guidelines—your exact situation, strengths, and goals are all unique. Gather information, use FBA calculators, and follow the data before making a decision for your Amazon business. 

Part of that research is identifying the tools and partners you can depend on. Zee is an all-in-one import and logistics service provider specializing in helping Amazon FBA merchants expand their inventories to international Amazon warehouses. 

There are some things, like shepherding goods through the export/import steps and accessing a trusted network of shipping providers, that you do not want to DIY. Drop us a line when you’re ready to learn more about growing your Amazon FBA business to multiple countries. We’ve got you covered!

Sources: 

  1. Amazon Seller Forums. What is the difference between fulfilled by amazon and fulfilled by merchant. https://sellercentral.amazon.com/forums/t/what-is-the-difference-between-fulfilled-by-amazon-and-fulfilled-by-merchant-i-am-a-new-seller/550553
  2. Viral Launch. FBA vs FBM: A Full Comparison for Amazon Sellers. https://blog.viral-launch.com/tips-for-selling-on-amazon/fba-vs-fbm-a-complete-comparison-for-amazon-sellers-infographic/
  3. Forbes. America’s Most Reputable Companies In 2017: Amazon Knocked Out Of The Top Spot. https://www.forbes.com/sites/karstenstrauss/2017/03/28/americas-most-reputable-companies-in-2017-amazon-knocked-out-of-the-top-spot/
  4. DataFeedWatch. Amazon FBA vs FBM: Which Solution Is Best For Your Business? https://www.datafeedwatch.com/blog/amazon-fba-vs-fbm
  5. Statistica. Number of paying Amazon Prime members worldwide as of 1st quarter 2021. https://www.statista.com/statistics/829113/number-of-paying-amazon-prime-members/
  6. MarketWatch. Amazon Prime member total reaches 142 million in U.S. with more shoppers opting in for a full year, data shows. https://www.marketwatch.com/story/amazon-prime-member-total-reaches-142-million-in-u-s-with-more-shoppers-opting-in-for-a-full-year-data-shows-11611073132