Amazon FBA and FBM

When you sell on Amazon, you can choose between two fulfilment options - Fulfilled by Merchant (FBM), or Fulfilled by Amazon (FBA). It is important to know the differences, and which fulfilment method suits your business.

FBM (Fulfilment by Merchant)

As the name suggests, with FBM, when an order is made on Amazon, you, as the merchant, are responsible for fulfilling that order and shipping it to the customer. With Amazon Channel by Codisto, orders for products listed as FBM will be sent to Shopify (based on your Order Transfer Settings) to be fulfilled alongside your Shopify store orders. Inventory counts will be updated in Shopify and on your Amazon listings, and shipping status and tracking data will automatically be sent to Amazon.

FBA (Fulfilled by Amazon)

FBA works a little differently. If you elect to use the FBA option, you must send inventory to Amazon to be stored in their fulfilment centers so that when an order is made, Amazon can ship it to the customer on your behalf.

The FBA service has many advantages. FBA products can rank more prominently in search results, are automatically eligible for Amazon Prime fulfilment, and Amazon takes care of all shipping related customer service on your behalf, but FBA does come with additional costs for both storing your products and fulfilling them.

While FBA might not be the ideal or preferred solution for every retailer, it does allow sellers of all sizes to leverage Amazon’s service promise of fast delivery and world class customer service through their global fulfilment network. Retailers also benefit from having more time to spend on other areas of their business, without the hassle of managing fulfilment and logistics.

Automatically switch to FBM

With Amazon by Codisto you can elect to automatically choose inventory from your FBA and once this is depleted, it will automatically switch over to your FBM inventory.

PROS

CONS

Eligible products earn Prime badge

Additional costs associated with services

Amazon’s shipping and logistics

Amazon controls customer returns, refunds

Amazon’s 24/7 customer service 

Likely to see an increase in returns

2-day shipping on Prime eligible orders

Long-term storage fees for slow-moving products

Multi-channel fulfillment also available (non-Amazon orders)

Strict guidelines when preparing products for FBA  

No minimum on the number of products stored

Tracking inventory can be difficult without an integration

Improved chance of winning Buy Box over non-FBA sellers