Since Amazon considers its fulfillment service to have perfect metrics across variables, it is the most preferred fulfillment method by Amazon. Amazon sellers have two fulfillment methods to choose from
- Seller Fulfilled or the FBM ( Fulfillment by Merchant )
- Amazon Fulfillment or the Amazon FBA
What is Amazon FBA and how is it advantageous?
Amazon has created one of the most advanced fulfillment networks in the world. In simple words, Amazon calls it a service where ‘You sell it and they ship it‘.
All you’ll have to do is send the products to Amazon’s warehouses properly marked and labeled and Amazon manages the rest of the stuff for you. They pick, pack, deliver your Amazon products and even manage the returns.
This business technique can help you enhance your sales by giving you access to the world-class expertise of Amazon and the trusted customer services.
Advantages of using Fulfillment by Amazon
Better buy box opportunities
Using Fulfillment By Amazon (FBA) is the easiest way to increase your chances of winning the Buy Box. Generally, an FBA seller can set a slightly higher price than an FBM seller and still win the Buy Box.
On listing your products with FBA, you make yourself eligible to about 80 million subscribers of Amazon Prime. Prime customers tend to prefer prime merchants. So you’ll have more trouble reaching them if you opt for FBM. Your products are also eligible for free two-day shipping.
Amazon’s Warehouse is your Inventory Store
Amazon stores your inventory in its warehouses so that you’re not stuck with hundreds to thousands of units scattered across your living space. By choosing FBA, you source the product, list it on Amazon and ship it to Amazon’s FBA warehouses.
Multi-Channel Fulfillment is when you list a product on Amazon FBA and sell the same product on another e-commerce site. With FBA, you can fulfill orders from other sales channels using your inventory stored in Amazon fulfillment centers.
Even though FBA is often a smart choice, you still need to look at the big picture to evaluate whether it will save or cost you in the end. Sometime FBA services can eat up on your profit margins. Calculate your Amazon profits well before you go in for Amazon FBA.
And you cannot say that Fulfillment By Merchant (FBM) is a bad choice and they can never beat FBA sellers; it’s just harder, requiring extremely high scores across all variables and a very low price.
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