Launching your business on Amazon through their Seller Central program is no easy feat, as you must choose between three different order fulfillment methods: Fulfillment by Amazon (FBA), Seller Fulfilled Prime (SFP), or Fulfilled by Merchant (FBM).
Each fulfillment method has its own pros and cons, which we will discuss later on, and selecting one depends on how your business operates as well as your product range.
With FBA, your business sends all of your inventory to Amazon's warehouses to store, manage, ship, and fulfill on your behalf. In this scenario, Amazon acts as a third party logistics (3PL) fulfillment service provider. Fees associated with FBA include product fees based on size and weight as well as storage fees.
To begin using FBA:
With SFP, you keep your inventory in your own warehouse; however, Amazon manages and oversees the delivery by selecting their own preferred shipping carrier. Sellers will only qualify for SFP after passing an initial trial period.
To begin using SFP:
With FBM, sellers have more control over the shipping and eCommerce fulfillment process. You manage and fulfill orders from your own warehouse and are not required to match FBA delivery times. However, FBM sellers do not enjoy the same benefits of being a Prime Seller through FBA or SFP.
To begin using FBM:
Even with a quick rundown of each fulfillment option, it may be difficult to narrow it down to one. It's vital to understand exactly what each option entails so that you know the cost and operational implications before committing to one option.
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Having reviewed the differences as well as pros and cons of each fulfillment option, you should have a clearer idea of which option is right for your business.
FBA is best-suited for sellers who have high order volume with fast moving goods, lower priced goods, smaller product weight and dimensions, and global customers.
SFP is best-suited for sellers who have slower moving goods, heavier or oversized goods, seasonal or perishable goods, personalized or customized goods, items that are shipped in multiple boxes, and are multichannel retailers.
FBM is best-suited for sellers who also have slower moving goods, smaller production runs, personalized or customized goods, items that are shipped in multiple boxes, but simply don't have the infrastructure or resources to maintain FBA level services at the moment.
It is possible to choose multiple fulfillment options, but this has limitations. You can sell as both FBA and FBM but not for the same product in the same country at the same time. You can also sell as SFP in one country and FBA or FBM in others or as SFP and FBA in the same country by creating regional selling rules.
It goes without saying that regardless of which option you choose, the right one is the one that will reduce your fulfillment costs without sacrificing efficiency. One common solution to this is to sell on Amazon via FBA but instead of directly shipping to Amazon, you ship to a 3PL provider with the same capabilities as an Amazon fulfillment center who can provide FBA prep services for you.
ShipBots is a third party logistics 3PL fulfillment center that will store, label, and ship your products on your behalf. At ShipBots, we utilize our comprehensive inventory management software to maximize productivity and minimize errors. We integrate with Amazon to accurately fulfill your orders so that you can focus on scaling your business. Within 24 to 48 hours of receiving inventory, your products will be labeled, prepped and ready to be shipped to Amazon's warehouses. We know it is important that your FBA prep work is done efficiently and accurately. Your inventory will be prepared according to Amazon FBA guidelines and we will ship it ASAP.
Interested in partnering with a 3PL to handle your FBA prep services? Contact us to start streamlining your Amazon sales today.
