The concept was initiated back in 2015 when Amazon celebrated its 20th anniversary. It all happened on the auspicious occasion of Amazon known as the Amazon Prime Day starting on Monday at 3 PM. It is one such day when online sales for Amazon touch the roof; it is the day that creates an opportunity for individual merchants to reach out to new audiences and begin their journey towards everlasting successes by leveraging the potential Amazon holds.
In fact, according to research, Amazon states that over 100 million products are sold during Prime Day, making it one of the best days for Amazon in the entire year. Also, research conducted by Coresight predicted that the happening sales for Amazon Prime Day this year would exceed $3.4 billion easily (at least a billion-dollar more compared to the previous year). As a result, on July 15th of 2019, many niche retailers experienced an upsurge of 68% in revenue.
Sellers make money online using Amazon by leveraging two Fulfillment processes,
What are they and how do companies benefit from them and above all which one is the best option?
Let’s delve in and find out which is the best option for business.
What is Amazon FBA and What is Amazon FBM?
FBA stands for fulfillment by Amazon. It is a method where you sell your products online and Amazon takes up the responsibility of shipping those products to the desired delivery addresses. Whereas, FBM stands for fulfillment by Merchant. Here, you are responsible for everything, from listing to delivering the product to your customers. The only thing that Amazon offers is its platform for you.
What Should a Seller Evaluate Before Choosing a Selling Option?
Now before you make up your mind on which is the best option for you, evaluate a few things.
- As a merchant, am I able to ship this product at the best cost?
- How much is it going to cost me per unit of selling on or through Amazon?
- Have I performed a good enough Amazon Product Research?
- What is the cost of the item and is it even popular among target audiences?
- Are there any long-term storage fees associated or any monthly charges?
“Getting your way around Amazon’s fulfillment fees can turn into a cumbersome task,”
says Joseph Abitbol at Seller Locker.
You need to analyze in which weight tier does your product fall into before you dispatch the product to Amazon under FBA. It’s because the greater the dimensional weight of the product or actual weight, greater will be the price based on the size of the tier.
“Amazon is constantly changing the pricing structure and sellers must stay up to date with these announcements. In 2018, fulfillment fees for almost all size categories have simply increased by 15%.”
Why Do I believe FBM is a Better Option?
Well for starters, FBM is great because it offers greater control over the product and their respective deliveries. With FBM, you don’t have to pay any additional costs to the Amazon and you can access your inventory whenever and wherever you want. Also, Amazon charges differently based on the size of the items which means that larger items will cost you more to stock with smaller profit margins.
Plus, most sellers make a great fortune during the Amazon Prime season. And FBM is definitely one of the best options as it allows all FBA benefits to the merchant selling on Amazon without any additional storage charges or fulfillment charges. You also get a Prime badge on orders which get delivered from your own warehouse which you can later on display on your Amazon selling accounts.
Lastly, you can offer your own discounts which allow you to play better with the competition.
Being a merchant using the FBM option, you have the liberty to purchase and ship products as per your choice. You can use the UPS or FedEx delivery services for the fastest delivery option. By doing so, you can save yourself greater profits and sell volumes of products. In fact, if an order is placed nearby a warehouse, many sellers have their own delivery units to package and ship their products as fast as they could to their customers. With FBA, you don’t have such liberty and expenses are high.
Seller Locker is a group built by Amazon sellers who were tired of being overcharged with FBA fees. In case, if you are still eager to use FBA instead of FBM, I suggest that you do get in touch with the following team. At times, even the slightest overmeasure can result in creating major overcharges. Seller Lockers govern these overcharges and other inventory-related issues such as loss/damages.