E-commerce businesses are changing the way businesses were done previously. E-commerce businesses give businesses the ability to trade globally. Traders can purchase products from countries like China and can sell online products in the USA. There are large E-commerce companies such as Amazon, Alibaba, Daraz that provide services to their customer. E-commerce businesses have been flourishing, especially during the covid-19 pandemic. More and more businesses are entering the E-commerce business, due to high profitability and sales. Most of the businesses are procuring their product from China, as China offers cheap products due to cheap labor costs.

FBA and FBM Introduction:

Amazon is the most reputed and trust E-commerce business being widely use across many countries of the world. Amazon is one of the biggest E-commerce companies in the world. It offers a variety of delivery and fulfillment services and options to its customers. The most used and trusted service of Amazon is FBA fulfillment by Amazon, FBM fulfillment by merchant. FBA fulfilled by amazon means that amazon is responsible for the storage, delivery and fulfillment of the order. FBA is the most trust option of delivery of products as its fulfillment is done by the amazon company itself. Whereas in the case of FBM fulfillment by merchant is the delivery option of amazon merchant fulfill the order.

In today’s blog will compare FBA vs FBM, to better understand the pros and cons of both services. Particularly will discuss in detail the fbm amazon meaning, fulfilled by merchant, how amazon fulfillment works.

FBA Fulfillment by Amazon

FBA fulfillment by Amazon is the fulfillment option in which amazon takes the complete responsibility of storage, packing, delivery. This type of delivery of the product is guaranteed by Amazon, which builds the trust of the customer in the FBA products.

FBM Fulfillment by Merchant:

FBM fulfillment by Merchant is the option in which the merchant has complete control of the shipping and handling. In FBM the seller does not need to pay an extra fee to amazon for the fulfillment of an order. FBM is sometimes also known as merchant fulfilled network.

FBA vs FBM:

When we compare FBA vs FBM, then we can clearly understand the difference. Following are the difference between FBA vs FBM.

Amazon merchant fees difference:

Amazon FBA attracts much higher fees and the shipping cost as compared to amazon fbm shipping rates. In FBM, the seller has to make a small referral fee, subscription fee, and per item sold fee.In case of fbm, the fbm shipping cost is lesser as the seller is arranging the shipping himself. While in the case of FBA amazon charge a large amount of fees for handling and fulfillment of order. In FBM, amazon fulfilled by seller attract lesser fees compared to FBA.

Amazon requirements:

In case of FBA the seller has to follow the strict requirements of amazon. While on FBM the merchant has to follow a few rules. And in the case of FBM there are lesser penalties from amazon. More and more businesses are entering the E-commerce business, due to high profitability and sales. Most of the businesses are procuring their product from China, as China offers cheap products due to cheap labor costs.

Branding:

In the case of FBA the customer will be deliver the product in amazon packaging. And the customer will contact amazon for customer complaints and suggestions. In FBA there is no branding of the product. While in FBM the seller will send the product to the customer in its own customized packing. This will help the seller in branding its product.

Prime badge:

In the case of FBA the product will have a prime badge of amazon, making it more trustworthy for the customer. While in the case of FBM there will be no prime badge of amazon on the product. In FBM the order is fulfill by seller. In FBA there is no branding of the product. While in FBM the seller will send the product to the customer in its own customized packing. This will help the seller in branding its product.

Trust:

Amazon merchant fulfilled product has a bit lower trust level of the customer as compared to the amazon fulfilled products. merchant by amazon is more trustable to the customers. In FBA there is no branding of the product. While in FBM the seller will send the product to the customer in its own customized packing. This will help the seller in branding its product.

AMAZON FBM Fees:

It attracts fewer fees than FBA. Following is the detail of FBM fees.

• FBM Per item fee.
• FBM Referral fee
• Monthly subscription of FBM
• • FBM referral fee: Amazon charges a referral fee to the seller in the case of FBM. It is due to the fact the product is being list on the Amazon website.

• FBM per item fee: There is a per-item fee for the FBM to be paid to amazon. 

• Monthly subscription: Amazon charges a monthly subscription to its customer for FBM plan. The seller who subscribe to the FBM monthly subscribe, are waive off from per item sale fee. 

CONCLUSION:

Amazon is one of the largest E-commerce companies in the world. Customers around the world trust amazon prime badge products. Amazon offers are variety of delivery and fulfillment options to its customers. FBA fulfillment by Amazon and FBM fulfillment by merchant are the two most used options by the customers. In FBA the amazon is itself responsible for the storage, packing, and delivery of products. Product under FBA carries is Amazon prime badge. On the other side in FBM fulfillment by merchant the seller himself handles the shipping and packing of the product. In case of FBM, the product does not carry any amazon prime badge. When we compare FBA vs FBM the customer has more trust on the FBA than FBM. The advantage of FBM to the seller is the fewer cost and fees as compared to the FBA mode of fulfillment. FBM is sometimes also known as a merchant fulfillment network.