The 2022 Holiday season has already begun and many global Amazon sellers are already facing one major problem. The problem is- Whether Amazon FBA is the right order fulfillment method for them or Amazon FBM.
When choosing between Amazon’s FBA and FBM, you need to see which fulfillment model is more oriented toward your business.
As of February 25, 2023, the New and Improved version of Amazon by CedCommerce is now known as “CedCommerce Amazon Channel”.
Factors Deciding Choosing Between FBA and FBM
There are a lot of things you should consider when choosing between FBA & FBM. Some of these include:-
- How much space do you have for your inventory storage?
- What sort of items are you going to be selling?
- How much profit do you want to make per item?
- How much time do you want to dedicate to your business?
- Is this a full-time job or a side hustle?
- Do you have a nearby post office handy and a decent relationship with the man or woman behind the counter?
The answers to these questions may not come immediately, but as you start selling on Amazon, the decisions you make will shape the business you create.
Benefits of Using Amazon FBA
One of the biggest benefits of choosing FBA is that you’ll be outsourcing almost everything but finding your stock to Amazon. They will store, coordinate, package and deliver your products without the need for you to be bothered with the same.
However, you’ll still have to manage your inventory, and deal with existing inventory and other inventory issues.
Whilst it’s relatively easy to select FBA for your stock, getting answers to what to do when things go wrong is about as easy as getting a degree in Medicine.
Amazon FBA Cons
FBM sellers have done exceedingly well since the lockdown arrived in the pandemic. However, many FBA sellers were tackling inventory and stockpile issues. With multiple dependencies on Amazon, anything that Amazon does can have a huge impact on your business.
So are there any alternatives to FBA?
Amazon FBM Pros
The main benefit of using FBM is a direct increase in your profit margins. You’ll have higher control over your business and that in essence means more profit margins, straightaway.
Since you’ll be outsourcing less to Amazon and you’ll be earning more per product that you sell on Amazon. This, in turn, means that you can price yourself competitively and you’ll be able to sell lower-priced books at higher volumes.
If you can rapidly scale up your business and get your hands on a lot of books at next to nothing then you’ll be turning profitable in quick time.
If you’ve got a big empty space you’re dying to use and enjoy the cut and thrust of running your own business on a full-time basis then this might be the best option for you.
Amazon FBM Cons
Are there downsides to using FBM? Absolutely!. The buck does completely stop with you. The early days will be spent wrapping books, posting books and streamlining your systems until you’re damn good at it. Escalate your business quickly and you’ll find yourself overwhelmed with orders and customers who can be angry (very angry) at times.
If organization isn’t your thing, then beware. When someone orders that copy of ‘The Snake & The Stallion, Story of the Le Mans rivalry between Ford & Ferrari’, they want it when you said you could deliver it. Your store rating will plummet if you use the ‘Ford & Ferrari…’ system.
Can you use both?
Glad you asked! This is the model that a lot of sellers choose for their Amazon business. Many sellers send the vast bulk of their stocks to Amazon and retain only the super high-priced books to FBM.
This is a fairly good way to do things and allows you to simultaneously build both sides of the business in a manageable way. You don’t get overrun with books but you won’t lose massive amounts of money on high-priced books when Amazon takes its share.
FBA or FBM, then?
Our recommendation will be that you sit down and think about the sort of business you want to run.
Many sellers keep selling online and doing multichannel business as a side hustle. It obviously eats into a lot of time for a lot of sellers, but they are more than happy to outsource everything to Amazon with FBA. Sure, the profits are lower than most FBM sellers, but the turnover continues to grow month after month. All with relatively little time investment on the seller’s part.
However, if you are super organized and ready for the challenge and reward of FBM, there’s no way to look back. The secret to running a successful business isn’t easily bought in an online seminar or blindly following the advice of some guy you read in a blog once. It’s done by carefully structuring the business around your skills, your temperament and your ability to commit time and energy. That means asking yourself the right sort of questions.
And in case you are using both FBA & FBM, you’ll still want to sell on Amazon via Shopify. To help you out with this, why not try the Amazon by CedCommerce app? It’s got a ton load of features at great prices. And also comes with a Free Plan that helps you explore the app, before deciding on taking the plunge forward.
So, we hope that we’ve been able to solve some of your concerns regarding FBA & FBM. Happy Selling!