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Amazon FBA/FBM Model

There are two business models provided by Amazon. Many people stuck on understanding these business models. Here we are doing a deep comparison between FBA and FBM models. After that you will be able to choose the best model for your business needs.

Stands ForFulfilled By AmazonFulfilled By Merchant
Product StoredAmazon warehouseIn merchant’s own warehouse
Packing and shipping responsibilityAmazonMerchant’s own
FBA Storage FeeYesNo
FBA Long term FeeYesNo
Shipping Logistics & Operational ProcessAmazonMerchant
Amazon Prime BadgeYesNo

Now the question is when to choose Amazon FBA and FBM?

Amazon FBA

Amazon FBA model is better fit when:

  1. There is a high sell volume
  2. You are looking to drop the cost to lowest possible profit point

Advantage of FBA Model

  1. Amazon almost every time prefers FBA stores for Buy Box.
  2. You don’t need to take care of shipping and customer services.
  3. People have more trust in FBA rather than FBM models. So you can target much more audience in the FBA Model.
  4.  You can get Amazon Prime benefits.
  5. As Amazon is handling your complete process you have much more spare time to spend on your other business.

When To Use FBA Model

Amazon FBA model is best fit when the size of your product is small and it is not heavy in weight. Because Amazon has its FBA charges on each product stored in its warehouse. If your product is not sold in a month then amazon will also charge you a fee on it.

Amazon FBM Model

FBM model better Fits when:

  1. Your product is Exclusive
  2. Product is small in volume
  3. You need to take Seller Fulfilled Prime benefits  (SPF).

Advantage of Amazon FBM Model

  1. Sellers have complete control over business.
  2. No extra fee of storing and shipping.
  3. Less chances of loss “If Amazon Policies are changed”.
  4. Easy to maintain

When to Use FBM Model

Amazon FBM best fits when your product size is large and you are worried about FBA storage charges. Or when your product is expensive or chances of product broken.