Amazon is all about fast delivery, quality products, and a satisfied customer experience. And if you are a seller on Amazon, keeping up with its fast delivery feature can turn out to be quite a challenge; that is why one of the biggest decisions you will make is how to ship your products across the country or worldwide. The Fulfillment method that you choose directly impacts your cost, delivery speed, customer experience, and even the chances of you winning the Buy Box. With every day, competition on this platform is higher than the previous day, and one way to win shoppers’ trust is by delivering on time, whether you are a new seller or an established brand.
In this blog, we are going to discuss how to choose the Amazon Fulfillment method according to your brand requirements, target audience, and product market, Amazon FBA vs FBM vs 3PL, and many more.
What Are Amazon Fulfillment Options?
There are three Amazon shipping options for sellers provided by the platform. Each has its own advantages and disadvantages. These Amazon Fulfillment options are:
Fulfillment by Amazon (FBA)
With Amazon FBA, sellers send their products to Amazon Fulfillment centres, where they store, pack, and ship their products while managing returns and customer services as well. This method is widely used, and many brands are working with an Amazon FBA management agency.
Why Choose FBA
- Faster scaling and delivery of orders
- Higher chances of winning Buy Box
- Reduced the burden of operational work
- Handled customer services and returns
- Eligibility for Prime Badge
Who Should Choose FBA
- Sellers of high-volume products
- Sellers of small-sized products
- Products with consistent demand
- Brands that don’t want an operational burden
- Sellers aiming to win the Buy Box
What You Pay For
- Fulfillment fees for picking, packing, and shipping
- Storage fees, based on stock volume
- Shipping charges for fast delivery
- Customer service, return and inquiries
- Optional services like specialized prep
Fulfillment by Merchant (FBM)
With the FBA method, sellers store the products, handles it’s packing and shipping themselves when an order is placed. This method of Fulfillment is becoming more popular because of the high long-term storage fees of FBA, especially for low-demand and slow-moving inventory.
Why Choose FBM
- Complete control over inventory
- Better profit margins with reduced cost
- No requirement for Amazon storage fees
- Better choice for heavy or large products
- Low Fulfillment cost than FBA for some categories
Who Should Choose FBM
- Brands selling customized or handmade products
- Sellers with slow-moving or low-demand inventory
- Handle with care or fragile products
- Brands with their own warehouses
- Businesses that want complete inventory control
Challenges of FBM
- No Prime badge eligibility without FBA
- Increased operational workload for the seller
- Strict product delivery standards need to be maintained
- Low product visibility, compared to FBA products
- Increased requirement of the workforce
Third-Party Logistics (3LP)
A 3LP is like Fulfillment by Amazon, but at less cost. In third-party logistics for Amazon sellers, brands outsource services like warehousing, inventory management, order picking, packing, and shipping from a specialized external provider. Some brands use a combination of FBA and 3PL.
Why Choose 3PL
- More flexible and lower storage pricing than FBA
- Allows multiple channel Fulfillment
- Real-time management of inventory
- Improved customer experience
- Better chances of global expansion
Who Should Choose 3PL
- Brands that are scaling fast
- Businesses selling on multiple platforms
- Sellers with large or heavy products
- Sellers wanting an alternative to FBA
- Brands wanting more control than FBA offers
Challenges of 3PL
- No eligibility for Prime badge
- High dependency on external partners
- Risk of shipping delays, damaged goods, etc.
- Less priority compared to bigger clients
- Reduced connection with customers
How to Choose the Right Shipping Setup for Your Brand
Choosing the right shipping setup is not about copying what other sellers are doing. It is about understanding your business needs and selecting a system that supports your growth, profitability, and daily operations. Many brands avail Amazon Seller Account Management services to evaluate their key factors for deciding shipping method, which are:
Understanding Your Product
Firstly, look at the product you sell and its attributes, such as size and weight. Small, lightweight products work well with Amazon FBA, while large, heavy products work well with FBM or 3PL.
Check Your Profit Margins
Your Fulfillment method directly impacts your profit margins. If you have high margins, choosing FBA is ideal; if your margins are low, evaluate and calculate your costs before deciding.
Identify Your Product Demand
Products that sell fast are ideal for FBA, as they help avoid long-term storage fees, whereas slow-moving products may sit in warehouses for months, increasing expenses.
Level of Control You Want
Some brands want full control over their inventory, while others don’t want to reduce their operational workload. In that case, choosing FBM and FBA are the ideal options, respectively.
Think About Your Growth Plans
If you want to scale your business quickly, choosing FBA can help you manage most of the work. But if you want gradual growth and cost control, FBM or 3PL is the correct choice for you.
Conclusion
Choosing the right Fulfillment method is not just about delivering products; it is about profit, growth, brand reputation, and leaving the customers satisfied. Before making a decision, make sure to evaluate all aspects of your business to support your business’s future growth.
By working with HRL Infotechs, you can sit back and relax without worrying about shipping delays or damaged products, because we have it handled.
