If you are a new Amazon seller, finding the perfect way to deliver your product is tough, as Amazon provides you with 3 delivery methods that are different from each other. When you have the best delivery system for your products, you will see a massive change in the growth of your business! But, before you decide on which delivery method you are going for your business, you will need to know all the benefits and drawbacks of each method. Then, and only then, will you find out the best delivery option for your business!
3-Types of Fulfillment Method on Amazon
3 different fulfillment methods are available for you to use when you send your product to the customer. These fulfillment methods are Fulfillment By Amazon (FBA), Fulfillment By Merchant (FBM), and Amazon Prime. Each fulfillment method comes with its own features and benefits that will help grow your business. Taking a closer look at each fulfillment method will help you gain a clearer picture of what you should expect when implementing it in your own business.
Fulfillment By Amazon
FBA, known as Fulfillment by Amazon, is a service that helps Amazon sellers outsource shipping to Amazon. With this fulfillment option, Amazon stores, picks, packs, ships, and delivers the products to customers. In FBA, Amazon does all the hard work and manages everything for you in exchange for a set fee. Here are some of the main features of FBA:
✅ Prime eligibility
✅ Hands-off fulfillment
✅ Multi-channel fulfillment
✅ Lower shipping rates
✅ More Storage Space
The way Amazon FBA works is very straightforward. Amazon FBA is like having your warehouse, pickers, and packers! Amazon’s team will dispatch all your orders and handle all your customer emails, including letting your customer know if their item has been dispatched or not. They will also deal with shipping and payments too. Besides, As an eCommerce seller, you can handle fulfillment in-house, using Fulfillment by Amazon (FBA), using a third-party logistics provider, or a combination of all three to effectively manage your fulfillment capabilities.
Fulfillment By Merchant
FBM (Fulfilled by Merchant) refers to the method of selling where a seller lists products on Amazon.com but manages storage, shipping, and customer support independently. In short, the seller must pick, store, pack, and ship the product to the customer. After that, the seller will also need to handle the customer support too to ensure customer satisfaction or resolve any issues. Here are a few beneficial points for FBM:
✅ Hands-on fulfillment
✅ Fewer Amazon fees
✅ Opportunity for Prime
✅ Slightly higher margins
✅ Handles storage and all aspects of order fulfillment
Amazon Prime
The Amazon Prime membership includes various perks, including free delivery (two-day, one-day, and same-day delivery options), streaming, shopping, and reading benefits on its site. Amazon Prime is a subscription membership to Amazon that offers customers premium services for a yearly or monthly fee. Listed below are some of the key benefits of Amazon Prime:
✅ Free scheduled delivery to eligible addresses.
✅ Free same-day delivery to eligible addresses.
✅ Prime early access- get early access to lightning deals.
✅ Special deals at whole foods.
✅ In large cities, other services get rolled out, like same-day delivery of all groceries.
Benefits of FBA, FBM, and Amazon Prime on Amazon
Every sort of method has its own unique benefits that provide a selected group with better opportunities overall. Similarly, Amazon fulfillment methods also have unique ways to improve your business performance and make reaching your goal much easier and more convenient! Here are the benefits of each of the fulfillment methods of Amazon.
Benefits of FBA:
✅ Prime shipping becomes automatically available for your products when you join the FBA program.
✅ Customers that have a Prime subscription can receive your products within 1-4 days at no extra cost.
✅ Having the Prime logo next to your products will automatically increase your sales and attract more Prime buyers.
✅ The number of FBA customers worldwide is even greater.
✅ These customers generally make more purchases than people without a subscription.
So, Participating in the FBA program is an excellent way to meet all of the requirements, and it will significantly increase your chances of winning the Buy Box. With proper storage management, you can have a blast on FBA.
Benefits of FBM
✅ You can manage all your sales and inventory by yourself.
✅ In addition, you will store your products, ship them, and handle all customer service and returns.
✅ You will have a much better understanding of your customer’s needs and behavior.
✅ Numerous non-Amazon sales channels provide substantial discounts on shipping and supplies.
✅ You can reduce your shipping duration and make its cost more competitive with ground pricing.
You can get Prime shipping for your products without enrolling in the FBA program. However, to be able to display the Amazon Prime badge when shipping products from your warehouse, you must create a Professional Selling account and join a waiting list to enter the program. But even then, there is no guarantee of success.
Benefits of Prime Amazon
✅ Reach the most loyal Amazon customers
✅ Offer Guaranteed Delivery Date messaging
✅ 24/7 after-sale customer service
✅ Grow business with Lightning Deals
✅ Manage your stock across multiple channels
Products eligible for Amazon Prime will be designated on the product page and at checkout. If only some items in your purchase are eligible for Amazon Prime, you’ll be charged applicable shipping fees for the ineligible items. Items sold by Amazon.com are marked on the product page and at checkout. To be eligible for Seller Fulfilled Prime, your business must meet the following criteria.
✅ Have an Amazon Professional seller account
✅ Have a domestic warehouse from which to fulfill your orders
✅ Ship over 99% of your orders on time
✅ Have an order cancellation rate of less than 0.5%
✅ Use Amazon Buy Shipping Services for at least 98% of orders
✅ Deliver orders with our supported Seller Fulfilled Prime carriers
✅ The seller must agree to the Amazon Returns Policy
✅ Allow for all customer service inquiries to be dealt with by Amazon
Find Out the Fastest Fulfillment Method
Ensuring fast delivery depends on what kind of products you’re selling. But in general, FBA is better than both FBM and Amazon Prime as it provides faster delivery and a better experience for buyers. Here are some crucial points that help to prove that FBA delivers faster than FBM and Amazon Prime.
✅ FBA offers usually gain more weight than standard FBM with BuyBox.
✅ Products can be delivered in a minimum of 1-2 days, but this is not possible by FBM & Amazon Prime every time
✅ FBA provides fast and cheap shipping for prime members and a higher conversion rate for businesses
✅ FBA sellers are automatically eligible for Prime benefits.
✅ Maintaining Prime eligibility is tough, and even late shipments can harm your Prime delivery services.
FBA is better for high volume, higher margin products where sellers don’t have to handle storing and shipping products. FBM is better for smaller scale, small margin, or one-off products where the seller doesn’t mind storing and shipping the products. If you like having more control over your inventory, then FBM is for you; however, if you like the idea of Amazon storing and dealing with returns, then FBA is the way to go.
The whole process of order fulfillment, picking, packing, and shipping is laborious and time-consuming.FBA sellers spend less time on their business than FBM sellers. Allows sellers to take control of the fulfillment process without crushing small margins.
Analysis of these 3 services shows that no one has been able to beat the FBA on Amazon so far. This service is very fast ahead compared to everything else. However, we can expect Amazon Prime to follow soon. Since this is a new service on Amazon, we can only hope for the best now. FBA is much better than FBM because when you receive any claim or return on your product, FBA takes care of it, whereas when it is done by you, it’s just a complete headache.
Conclusion
In the article, we have gone through FBA, FBM, and Amazon Prime and went through its features, pros and cons, and benefits. We have gone through every aspect of all the fulfillment methods in depth. Going through this content, you will have a clear idea of the FBA, FBM, and Amazon Prime and be able to choose the one that you need for your own business.
We hope this content will help you understand FBA, FBM, and Amazon Prime. I hope this post will help you improve your business, and all your confusion will be cleared. You can also let us know your opinions about this post in the comment section.