Amazon FBA vs FBM: Which One Is Better for You?

If you're looking for Amazon to handle the storage of your inventory in its warehouses, along with picking, packing, and shipping the products when an order comes in, you should consider using Fulfillment by Amazon (FBA). With FBA, you don't have to worry about packing or shipping—your supplier typically sends the products directly to Amazon’s fulfillment centers.

Advantages and Disadvantages of FBA

Pros of FBA

Here’s a breakdown of the key benefits and potential drawbacks of using Fulfillment by Amazon:

Simplified Shipping and Storage

Managing inventory, especially in large quantities, can quickly take over your home, garage, or storage space. Packing and shipping orders is also time-consuming, especially with Amazon's detailed packing guidelines. With FBA, you pay a small fee, and Amazon handles everything—allowing you to focus on growing your business.

Affordable Shipping and Logistics

When you use FBA, you leverage Amazon's extensive network of warehouses and shipping facilities. As a result, the costs of packing, storing, and shipping are typically lower than if you were to handle it yourself, buying packaging and paying for separate shipping services. The pricing depends on the size and weight of the product.

Access to Amazon Prime

FBA sellers automatically qualify for Amazon Prime benefits. This means your products are eligible for fast, free shipping to Prime members, who number over 110 million. This can significantly increase the likelihood of sales, as customers often prefer fast delivery, building trust in your store.

Improved Chance of Winning the Buy Box

The Buy Box is a coveted spot on Amazon where the "Add to Cart" and "Buy Now" buttons are located. Sellers using FBA have a higher chance of winning the Buy Box, which translates into more sales.

Customer Service, Returns, and Refund Management

With FBA, Amazon also takes care of your customer service, returns, and refunds. This gives you access to Amazon's trusted global customer service, as well as the convenience of having returns and refunds handled without any additional effort on your part.

Cons of FBA

To make an informed decision, it's important to weigh both the pros and cons. Here are some disadvantages to consider when using FBA:

Loss of Control Over Inventory

By storing and shipping your products through Amazon, you relinquish control over your inventory. You cannot visit Amazon's fulfillment centers to inspect your items and must rely on Amazon to manage your stock.

Increased Returns

Because Amazon makes returning items easy for customers, you may experience a higher return rate compared to managing returns yourself.

Complicated Shipping to Amazon

Amazon has specific requirements for how products must be labeled and packaged before being sent to their fulfillment centers. Non-compliance with these strict standards may result in rejected shipments. To avoid this, you could use prep centers that specialize in Amazon’s requirements, but keep in mind they charge a fee, which will add to your costs.

FBA Fees

While FBA fees are often lower than the cost of doing everything yourself, they still represent an additional expense. Whether these fees are worth it depends on the scale of your business and the products you sell.