Amazon Fulfillment by Amazon (FBA), also known as “fulfillment by merchant” or “FBM,” is the first fulfillment method we’ll discuss. It refers to when Amazon handles the entire fulfillment process for your business.
It’s important to understand that Amazon handles the entire fulfillment process, meaning your products are Prime eligible. This means that customers can receive their packages in two days or less, which is a huge benefit when it comes to conversion rates and sales. Due to this, your ability to win the Buy Box increases since your products will utilize Amazon’s Perfect Seller Rating (PSR).
Experienced sellers can utilize FBA to alleviate the need to warehouse inventory that sells rapidly. By sending products to Amazon, the overhead can be greatly reduced, allowing for a much larger margin. This is great because it helps offset the higher fees involved with using FBA.
Learn how to pick the niche products to sell on Amazon,
Seller-Fulfilled Prime (SFP) is a service offered by Amazon that allows you to become eligible for Prime shipping on your products.
Prime is one of the most powerful tools in an ecommerce seller’s arsenal. It’s not only an excellent way to increase sales, but it also gives your product visibility and credibility with shoppers. When people see that a product is available for free two-day shipping with Prime, they are more likely to buy it than if they had to pay for shipping.
When you’re selling through Amazon FBA, you can take advantage of the Prime program with no effort at all on your part. However, if you are selling direct to customers or through other channels such as marketplaces or your own website, there are some limitations:
You can’t use FBA warehouse storage space for non-FBA orders—you must use your own storage facilities or contract with another company to store inventory
You can’t use Amazon fulfillment resources like customer service representatives or package pickers; these must be provided by the seller (or hired out).
Amazon Fulfillment by Merchant (FBM) is an option that allows you to handle the shipping process on your own without any Amazon involvement. With FBM, you can ship products directly from your warehouse to the customer’s address. The key difference between FBM and FBA is that with FBA, Amazon handles all aspects of the fulfillment process — packing, shipment, and returns — while in FBM, you are responsible for packaging and shipping your own products, In simple terms, it’s a fulfillment model where sellers take on the responsibility of fulfilling their orders themselves instead of relying on Amazon’s warehouses to do so. All you need is a warehouse space or storage facility where you can store inventory and ship out orders as soon as they are placed by customers.
This is mostly suitable for small & medium scale business with a team to handle all things order fulfilment, this is made easy by various shipping companies which can help you fulfil your orders at much lower cost.