When looking for how you want to do order fulfillment through Amazon there are two types that you can pick. FBA which is fulfillment by Amazon or FBM which is fulfillment by merchant. There are pros and cons to both of these and you have to know which will make the most sense when looking at which one works for your needs, or what mixture of the two would be the best for your company. Here are the pros to both the FBA and FBM.
Some of the pros for FBA is that,
When signing up for FBA your products are now eligible for Amazon two-day prime shipping. This is crucial in this day in age when people are now getting used to getting their items within that two days. Another benefit of this is that you look very reputable on the website and you are more likely to sell more products when customers see the amazon prime badge under your products. Amazon is a very reputable company so when customers do see that badge it makes them trust you more than a product that doesn't have that badge.
Set it and go
When you are setting up FBA Amazon has a very good reputation of once a product is set up you no longer need to worry about that item that they are fulfilling. You can focus on the more important aspects of your business and not worry about if your fulfillment order is getting processed and going out at the right time. Amazon will also include warehousing so when your items are stocking up inside of your garage, they will take it off of your hand and make sure that they will safely store your products.
Lower shipping costs
Amazon is the biggest online retailer in the world, with this comes partnerships with shipping outlets to ensure that they are getting the best prices feasible. This will increase your margins and will be a great economic move.
Here are some of the pros when it comes to doing fulfillment by merchant.
When working with a third-party company you will have a more hands-on experience and will know exactly what is happening with your products. It may be a lot more personalized and will make sure that any program that you need will get done. While at FBA it is pretty cookie cutter and there is not much leeway when it comes to what a company really needs.
Opportunity for Prime
You may think that because you are not doing FBA there is no chance for you to get an amazon prime badge under your product, but it is still possible. This will come with seller fulfilled prime. This is very hard to get and your company will need a long-standing relationship with Amazon. You need to have existing prime shipping order volume and have outstanding performance metrics for you to be considered. This is a tall task to achieve, but it is still possible.
Most of the time when doing business with an FBM you will be able to make slightly higher margins and make more money. This is because you will be paying fewer fees. The draw-off is that most of the time you will have fewer sales and may not have the peace of mind that your products are kept safe in warehousing. Over half of the shoppers that are on Amazon will be prime members and if someone is paying annually they are more than likely going to use prime when buying a product.
There are pros and cons when it comes to choosing if you want to fulfill using Amazon or Merchant. I have listed some of the pros that may come along with using either, but the best for your company may be using a mixture of both. If you do want to compare and see if an FBM is for you, contact Complemar for a free quote and we will have an industry professional reach out to see if our company is a good fit for you.