PROs | CONs |
| You don't have to store, coordinate, package, or deliver your own products | Charges and Fees - Amazon charges various fees, which are complicated and hard to understand. You will have to put your trust in Amazon, and accept that you are getting fair prices if you want to use Amazon FBA |
You don’t have to handle returns or customer inquiries | You have to put all of your trust in Amazon that their warehouse and staff are handling your products & orders with care |
Amazon FBA sellers are automatically given Prime Shipping benefits | FBA sellers are subject to Amazon’s pricing structure. This means if the FBA fulfilment fees increase, you have to pay them |
FBA products win the Buy Box almost all the time. Amazon decides which seller wins the Buy Box on fulfilment channels. Only the fastest and the most reliable sellers win the Buy Box. As an Amazon FBA seller, you are considered to have perfect scores across all these metrics. This is for FBA products, Amazon itself is in charge of fulfilment (they consider their own metrics to be perfect.) | Amazon Support - Amazon FBA Seller Support is extremely unhelpful in times of crisis and has trouble answering simple seller inquiries. Amazon also change their policies regularly, and often do not communicate this so this can at times cause impact to service, or overcharges until you bring issues to their attention |
Performance data of sellers heavily implies that Amazon FBA products get higher positions in SERPs, simply because Amazon customers prefer to buy products fulfilled by Amazon. Fulfillment is a key factor that contributes to your Amazon SEO. While unconfirmed by Amazon, it is true that Amazon FBA products generally get more exposure. | FBA fees and storage fees are incredibly high for oversize products |
Amazon’s retail operations are open 24/7, so even when you’re not around, your goods are shipped out and your orders keep running | If you want your products to be returned to you, it can take months to get those products delivered, simply because your inventory is spread between so many Amazon warehouses (even if its the same SKU) and mixed with other Amazon FBA seller’s products |
PROs | CONs |
Lower costs as there will be no monthly Amazon storage fees (it is important to note that if you use a 3PL, that storage fees will be applicable there for the goods you store in their facilities each month) | You will be solely responsible for managing your own inventory and reorders and making sure that orders get to your customers on time |
Complete control over packaging, shipping options, and delivery speed | The process will be more labour intensive, due to picking/packing/shipping tasks. Please be reminded however that Expandly can help out with any 3PL needs that you have |
Ability to compete for the Buy Box by offering low prices or fast shipping | The risk of products getting damaged in transit will be your responsibility |
Higher profit margins compared to other methods like FBA, where Amazon Fees will apply | You will be responsible for overhead costs such as packaging or shipping supplies/shipping costs |
FBM is especially attractive for sellers who want to sell large-size, expensive products with a slow inventory turnover rate. FBM allows them to leverage the Amazon marketplace without having to pay the storage and fulfilment fees Amazon charges for large-size products. | There is intense competition from other sellers using FBM |
You can utilise multi-fulfilment channels via 3PL warehouses, which can fulfil both your online and offline orders using the same warehouse. Amazon FBA does not allow this, because what warehouse your SKUs are stored at, is simply out of your control | You will not automatically get the Seller Prime badge on your products, and instead you will need to qualify for it. The Seller Fulfilled Prime (SFP) program is the only way for FBM sellers to get prime benefits, and unfortunately the requirements are tough |
FBM is perfect for sellers who value the exclusivity of their brand, and want to focus on direct customer service, to find out their customer’s pain points and build their brand | FBM products have less Buy Box power. SFP often increases the odds of FBM products winning the Buy Box, but it’s hard to maintain it when FBA offers always have an edge, simply because customers trust Amazon to fulfil their orders better. FBM also doesn’t get any SEO perks like FBA, for the same reasons |
Once you have fully analysed both fulfilment models, you should then be in a better position to decide what fulfilment offer is best suited to you and your business needs.