FBA or FBM what’s right for you?

FBA or FBM you
might say wth? When you see acronyms like this but don’t worry we are setting
out to demystify these Amazon related acronyms and to determine which is right
for your business.

Fulfillment by merchant(FBM)– The vast majority of new sellers and
small volume sellers will most likely select this route and there are a lot of
very good reasons to do so. First and foremost you are in control of your
inventory and shipping, no amazon storage fees or overly complicated fees
structures. Also if you are doing smaller
dollar items then FBA will be prohibitively expensive with their higher fee
structures. Now the downside is in order to compete with prime sellers you will
have to be very aggressive on pricing in order to win the war for the coveted
buy box. Also Amazon can be very strict about fulfilling orders in a timely
manner and errors or mis-shipments can lead to a suspension or ban so be aware
and stay on you’re A game. Again if you are just getting your feet wet this may
be the best option for you. As your business grows and your volume increases
you may want to review your sales and inventory and decide if you are ready for
FBA.

Fulfillment by Amazon(FBA)– This is great option for higher
volume sellers that don’t want to deal with the hassle of processing and
shipping. You simply pack and send your merchandise to Amazon and they handle
the rest. Doing fulfillment by amazon also automatically enrolls your
merchandise into the Amazon Prime program greatly increasing your likelihood of
selling. Down sides are complicated fees structures, storage fees based on the
dimensions of the item and fees for aging inventory between 6-12 months old. Keep
in mind amazon has stacked the deck in favor of FBA sellers. A move from FBM to
FBA can lead to significantly increased sales remember Amazon makes money on
storing as well as the sale in this case. It’s important to thoroughly review
and fully understand FBA’s fee structures before making the move. Bear in mind that
you do not have to go full FBA overnight maybe do a test run for some of your
more desirable fast moving sku’s, remember Amazon wants to store items that
will sell fast and if you send in your dogs they will make you pay for holding
them for you.

FBA or FBM
that is the question and the answer depends on you and your business model. As
your business expands and grows review and determine which route works best for
your schedule and your bottom dollar. 

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