Part 4 >>> Alternatives To FBA

If you are not keen on Amazon fulfilling your orders, other options exist. These are Fulfilment by Merchant and Seller Fulfilled Prime. Both require the seller to manage the inventory, handling, shipping, and support for every customer. However, there are also other differences which are detailed below.

Fulfilment By Merchant (FBM)

Fulfilment By Merchant is a vastly different way of selling on Amazon. The seller still utilises the Amazon marketplace to list and sell their products.  However, fulfilling the order, shipping and customer support become the responsibility of the seller. Very similar to eBay.

Advantages

  • Some FBM sellers achieve higher profit margins as they avoid the FBA fees 
  • Access to the Amazon marketplace
  • Greater control over customer interactions and returns
  • Ability to service multiple sales channels more effectively
  • No storage costs at Amazon fulfilment centres
  • Beneficial to sellers with an established brand and proven logistics network

Disadvantages

  • Difficulty qualifying for the Prime program due to extremely high benchmarks set by Amazon.
  • Must avoid late deliveries, provide high level customer support, immediate confirmation, fast shipping and receive exemplary reviews from customers.
  • Must maintain very high standards to achieve Prime status on shipping whilst FBA sellers receive it automatically.
  • Difficulty winning the buy box. FBA sellers will usually win the buy boxes due to the guaranteed high quality of their fulfilment approach.

New sellers looking to avoid FBA should be aiming to qualify for Seller Fulfilled Prime, this program is like FBM but on steroids. See below.

Seller Fulfilled Prime (SFP)

Seller Fulfilled Prime is essentially a hybrid of the FBA & FBM programs. SFP sellers qualify to ship through Amazon Prime just like FBA but handle the inventory management, shipping and customer service themselves like FBM.

*The Amazon prime program has over 100 million members worldwide. These members spend on average $1,200 per year vs $500 per year for non-members. Access to Amazon Prime significantly increases a sellers opportunity for success.

Advantages

  • Qualify for Amazon Prime
  • Avoid FBA fees
  • Access to entire Amazon marketplace including 60 Million+ Prime members
  • Greater control over customer interactions and returns
  • Ability to service multiple sales channels more effectively
  • No storage costs at Amazon fulfilment centres

Disadvantages

  • Very difficult to qualify for program
  • Sellers must pass trial period before being accepted into SFP program
  • Sellers must agree to several other SFP program terms. These relate to Prime shipping speed, labelling and adherence to customer service and returns policies.

*It’s important to note, only the best sellers qualify for SFP. See the requirements below.

Starting-amazon-seller-fulfilled-prime-trial-period

For new businesses, selling on Amazon is usually a choice between FBA and SFP. This is because they both tap into the Amazon Prime market and its associated benefits.

If you feel as a seller that the SFP requirements may be too hard to meet, FBA is definitely the best option for you.

To read a thorough comparison of the two programs visit the article >  FBA vs SFP.

For additional Amazon Business Support, please contact us or check out our comprehensive consulting services.

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