What is the difference between FBA and seller? Is Amazon seller and FBA the same thing?
Understanding the difference between FBA and seller is essential for anyone looking to start selling on Amazon. This information makes an informed decision about which fulfillment method aligns best with your business goals, resources, and growth plans.
In this blog post, we’ll explore various facets to help you better understand the difference between an Amazon Seller and FBA (Fulfillment by Amazon).
Difference Between FBA And Seller: How Each Fulfillment Method Works
What Is Amazon FBA And How Does It Work
Amazon FBA (Fulfillment by Amazon) is a service offered by Amazon that allows sellers to store their products in Amazon’s fulfillment centers. When a customer places an order, Amazon takes care of the picking, packing, shipping, and customer service for that order.
What Is Amazon FBM And How Does It Work
Amazon Seller or FBM (Fulfillment by Merchant) is an alternative fulfillment method offered by Amazon. With FBM, sellers are responsible for handling all aspects of the fulfillment process, including storage, packaging, shipping, and customer service, without relying on Amazon’s fulfillment centers.
Difference Between FBA And Seller: Types of Sellers
Here’s an overview of the suitability of each option for different types of sellers:
- FBM:
Experienced Sellers: FBM is suitable for experienced sellers who have a well-established infrastructure for order fulfillment, including inventory management, packaging, and shipping. These sellers have the resources and expertise to handle all aspects of fulfillment independently.
Niche and Custom Products: FBM can be a good fit for sellers with unique, niche, or custom products. These sellers often have specialized packaging requirements or prefer to handle the fulfillment process themselves to maintain complete control over the customer experience.
Cost-Conscious Sellers: FBM allows sellers to have greater control over costs, as they can negotiate rates with shipping carriers and handle the fulfillment process in a way that best fits their budget. This can be advantageous for sellers who are particularly cost-conscious or have specific cost-saving strategies in place.
- FBA: What are the different types of Amazon FBA sellers?
New Sellers: FBA is often recommended for new sellers who are just starting their e-commerce journey. It provides a simplified and streamlined fulfillment process, allowing sellers to focus on other aspects of their business, such as product sourcing, marketing, and customer acquisition.
Sellers without Fulfillment Infrastructure: FBA is a suitable option for sellers who lack the infrastructure or resources to handle fulfillment in-house. By utilizing FBA, sellers can leverage Amazon’s extensive fulfillment network and benefit from their expertise in logistics and customer service.
Sellers with Plan to Expand: FBA is ideal for sellers looking to scale their business rapidly. Amazon’s fulfillment centers and logistics capabilities can handle high order volumes, allowing sellers to expand their product catalog and reach a larger customer base without worrying about fulfillment capacity.
It’s important to note that the suitability of FBM or FBA may also vary based on factors such as the nature of the products, target market, and business goals. Some sellers may choose to use a combination of FBM and FBA depending on their specific needs and circumstances.
Difference Between FBA And Seller: Shipping Logistics
In terms of shipping logistics, there are significant differences between an Amazon Seller and FBA (Fulfillment by Amazon). Let’s explore how each option handles shipping and which type of seller suits each option:
- Amazon Seller:
Shipping Responsibility: As an Amazon Seller using FBM, you are responsible for handling all aspects of shipping, including packaging, labeling, and choosing the shipping carrier.
Shipping Methods: You have the flexibility to select your preferred shipping method, negotiate rates with carriers, and choose the most cost-effective and timely shipping options for your products.
Control over Inventory: With FBM, you have complete control over your inventory and can manage it in your own facilities or through third-party warehouses.
Suitability: FBM is suitable for sellers who have the resources, infrastructure, and expertise to handle their own shipping and logistics. It works well for sellers with unique or fragile products, products that require special handling, or sellers who have established relationships with specific shipping carriers.
- FBA:
Shipping Responsibility: With FBA, Amazon takes care of the entire shipping process, including storage, packaging, labeling, and shipping. Amazon has a vast network of fulfillment centers globally, allowing for efficient and timely shipping.
Prime Eligibility: FBA enables your products to be Prime-eligible, offering customers fast and free shipping through Amazon Prime. This can increase visibility, buy box placement, and customer trust.
Customer Support: FBA also includes Amazon’s renowned customer service, where they handle customer inquiries, returns, and refunds related to FBA orders.
Suitability: FBA is well-suited for sellers who want to outsource the shipping and fulfillment aspects of their business. It is ideal for sellers seeking a hands-off approach to logistics, sellers with high sales volumes, or those looking to take advantage of Amazon’s fulfillment network, Prime eligibility, and customer support.
Ultimately, the choice between an Amazon Seller and FBA depends on your specific business needs, resources, and preferences. If you have the infrastructure and desire to handle shipping and logistics independently, FBM might be a suitable option. On the other hand, if you prefer to leverage Amazon’s fulfillment capabilities, Prime eligibility, and customer support, FBA can streamline your shipping logistics and enhance the customer experience.
Difference Between FBA And Seller: Scalability
In the context of businesses, scalability often refers to the ability to grow and increase revenue while maintaining or improving profitability without being limited by resources, infrastructure, or operational bottlenecks. This is also another factor that sellers need to know regarding the Difference Between FBA And Seller.
- FBM:
Inventory Control: As an FBM seller, you have full control over your inventory. You can manage it in your own facilities or through third-party warehouses. This gives you the flexibility to scale your inventory storage based on your needs and available resources.
Fulfillment Handling: With FBM, you are responsible for handling all aspects of fulfillment, including packaging, labeling, and shipping. This allows you to tailor the fulfillment process to your specific requirements and make adjustments as needed.
Scalability: FBM offers scalability to sellers who have the infrastructure, resources, and expertise to handle their own fulfillment operations. You can scale your business by expanding your storage capacity, optimizing your fulfillment processes, and leveraging strategic partnerships with carriers and logistics providers.
- FBA:
Fulfillment Network: FBA allows you to tap into Amazon’s vast fulfillment network. Amazon operates numerous fulfillment centers globally, enabling you to store your inventory in multiple locations and reach customers more efficiently.
Scalability: FBA is designed to handle high volumes of orders and offers scalability to sellers without the need to invest in additional infrastructure or resources. Amazon manages the entire fulfillment process, including storage, packaging, labeling, and shipping, allowing you to focus on scaling your business in other areas such as product sourcing, marketing, and customer acquisition.
Seasonal Demand: FBA is particularly advantageous for sellers with seasonal or fluctuating demand. Amazon’s fulfillment network can easily accommodate surges in orders during peak seasons, ensuring timely delivery and customer satisfaction.
The choice between FBM and FBA in terms of scalability depends on your specific business needs and growth plans. If you have the resources and capability to handle your own fulfillment operations and want more control over the process, FBM may be a suitable option for scalability. On the other hand, if you prefer a hands-off approach to fulfillment and want to leverage Amazon’s extensive infrastructure and scalability, FBA can be more beneficial as it allows you to focus on growing your business without the logistical burdens.
It’s important to assess factors such as inventory control, fulfillment expertise, storage capacity, seasonal demand, and the availability of resources when determining the scalability of your e-commerce business and choosing between FBM and FBA.
Difference Between FBA And Seller: International Expansion
- FBM:
Shipping Control: As an FBM seller, you have full control over the shipping process, including international shipping. You can choose your preferred shipping carriers, negotiate rates, and handle customs requirements directly. This allows you to tailor the shipping experience to meet the specific needs of your international customers.
Localization: FBM gives you the flexibility to localize your listings, customer support, and shipping options for different international marketplaces. You can customize your messaging, pricing, and fulfillment methods based on the preferences and expectations of customers in each target market.
Suitable for Experienced Exporters: FBM is well-suited for sellers who have experience in international shipping, customs compliance, and managing cross-border logistics. It requires knowledge of international trade regulations, documentation, and shipping processes.
- FBA:
Global Fulfillment Network: FBA provides access to Amazon’s extensive global fulfillment network. Amazon operates fulfillment centers in multiple countries, which allows you to store inventory closer to international customers, reducing shipping times and costs.
Simplified International Shipping: With FBA, Amazon handles the complexities of international shipping, including customs clearance, duties, and taxes. This simplifies the process for sellers and ensures a smooth customer experience across different countries.
Prime Eligibility: FBA offers the advantage of Prime eligibility for international orders. By using FBA, your products become eligible for Amazon Prime, which can significantly improve customer trust, visibility, and buy box placement in international marketplaces.
The choice between FBM and FBA for international expansion depends on your business’s capabilities, resources, and objectives. If you have experience in international shipping and want full control over the process, FBM can be a suitable option. It allows you to customize shipping methods, localize your approach, and manage international logistics independently.
On the other hand, if you prefer a simplified and streamlined international shipping process, FBA can be more advantageous. FBA handles the complexities of cross-border logistics and leverages Amazon’s global infrastructure, allowing you to focus on expanding your business and reaching international customers without the need for extensive shipping expertise.
Difference Between FBA And Seller: Time and Effort
FBM:
Time and Effort: FBM requires more time and effort from the seller as they are responsible for the entire fulfillment process. This includes packaging the products, arranging shipping, and handling customer service inquiries, returns, and refunds. Sellers need to have their own warehouses or storage space, shipping processes, and customer service teams in place to manage these tasks effectively.
Suitable Sellers: FBM is more suitable for established sellers who have the resources and infrastructure to handle fulfillment operations independently. These sellers may have experience in logistics, shipping, and customer service. FBM is also a good fit for sellers offering custom products or bundles that require special handling or packaging, as they have more control over the fulfillment process.
FBA:
Time and Effort: FBA requires less time and effort from the seller as Amazon handles the majority of the fulfillment process. Sellers send their products to Amazon’s fulfillment centers, where they are stored, picked, packed, and shipped by Amazon. Amazon also takes care of customer service inquiries, returns, and refunds related to FBA orders. This frees up sellers’ time and allows them to focus on other aspects of their business, such as product sourcing, marketing, and expansion.
Suitable Sellers: FBA is particularly suitable for new or small sellers who may not have the resources, expertise, or infrastructure to handle fulfillment operations on their own. By using FBA, these sellers can benefit from Amazon’s vast fulfillment network and leverage their expertise in logistics and customer service. FBA is also ideal for sellers looking to scale their business rapidly, as Amazon’s fulfillment centers can handle high order volumes. Additionally, sellers who want to offer Amazon Prime benefits to their customers should consider using FBA, as it enables their products to be eligible for Prime’s fast and free shipping.
Difference Between FBA And Seller: Cost, Payment, and Earnings
Before starting an Amazon business, you need to answer questions like ‘What is the salary of an Amazon FBA seller?’, ‘Can you make money as an FBA seller?’, ‘Does Amazon pay you for FBA?’, or ‘Is it cheaper to use FBA?’
Cost
FBM: With FBM, sellers are responsible for all aspects of fulfillment, including storage, packaging, and shipping. This means they need to bear the costs associated with these activities, such as packaging materials, storage fees (if applicable), and shipping expenses. FBM sellers may also need to invest in their own warehouse space or utilize third-party logistics services, which can add to the overall cost.
FBA: With FBA, sellers pay fees to Amazon for the storage and fulfillment services provided. These fees include storage fees based on the volume of inventory stored in Amazon’s fulfillment centers and fulfillment fees for picking, packing, and shipping orders. While FBA fees can vary based on factors like product size and weight, sellers can benefit from Amazon’s negotiated shipping rates and economies of scale.
For a definitive guide on how to reduce FBA fees, here’s a video from Steven Pope, founder and CEO of My Amazon Guy.
Payment
FBM: When an FBM seller makes a sale, they receive payment directly from the customer. The payment is typically processed through the chosen payment gateway or platform, such as Amazon Pay or PayPal. The seller has immediate access to the funds and can manage their own payment processing and cash flow.
FBA: With FBA, Amazon handles the payment processing on behalf of the seller. When a sale is made, Amazon collects the payment from the customer and then transfers the funds to the seller’s account, usually on a regular schedule. Sellers need to consider Amazon’s payment terms and any associated fees when planning their cash flow.
Earnings
FBM: Since FBM sellers handle the fulfillment process themselves, they have more control over their pricing and profit margins. They can factor in the cost of shipping, packaging, and other expenses when setting their product prices. However, FBM sellers may face challenges in achieving competitive shipping rates and offering fast delivery, which can impact customer satisfaction and sales.
FBA: FBA can potentially boost a seller’s earnings in several ways. Firstly, FBA allows sellers to offer Prime-eligible products, which can attract more customers and increase conversion rates. Prime members tend to prioritize Prime-eligible products due to the fast and free shipping benefits. Additionally, FBA sellers can benefit from Amazon’s customer service and returns handling, which can enhance the overall buying experience and generate positive reviews. These factors can contribute to increased sales and higher earnings for FBA sellers.
Difference Between FBA And Seller: Retail or Wholesale
- FBM:
Retail: FBM can be suitable for sellers who operate in a retail model, where they purchase products from manufacturers, distributors, or wholesalers and sell them directly to consumers. With FBM, sellers handle the entire fulfillment process, including packaging and shipping the products to customers. This allows retailers to have more control over the branding, packaging, and customer experience.
Wholesale: FBM can also be used by sellers who source products through wholesale channels. With FBM, sellers can purchase products in bulk from wholesalers and fulfill orders themselves. This can give wholesalers more control over the fulfillment process, allowing them to customize packaging or include promotional materials specific to their brand.
- FBA: Is FBA retail or wholesale?
Retail: FBA can benefit retail sellers who source their products from manufacturers, distributors, or wholesalers. With FBA, sellers can send their inventory to Amazon’s fulfillment centers. Amazon then handles the storage, packaging, and shipping of the products to customers. This can be advantageous for retail sellers as it offloads the logistical aspects of fulfillment, allowing them to focus on other aspects of their business, such as sourcing and marketing.
Wholesale: FBA can also be used by wholesale sellers who source products from manufacturers or distributors. By utilizing FBA, wholesalers can send their products in bulk to Amazon’s fulfillment centers and take advantage of Amazon’s extensive distribution network and fast shipping capabilities. This can help wholesalers reach a wider customer base and provide a seamless buying experienc
Difference Between FBA And Seller: Prime Eligibility
FBM stands for Fulfilled by Merchant, while FBA stands for Fulfilled by Amazon. Does Amazon Prime have to be FBA? In terms of Prime eligibility, FBA sellers have the advantage as their products are eligible for Prime shipping and can be listed with the Prime badge. On the other hand, FBM sellers handle their own fulfillment and shipping, so their products are not automatically Prime-eligible.
It’s worth noting that while FBA offers the advantage of Prime eligibility, FBM sellers can still offer fast shipping options and excellent customer service to compete in the marketplace.
Difference Between FBA And Seller: Customer Service
In terms of customer service, there are some key differences between FBM and FBA.
FBA sellers have the advantage of leveraging Amazon’s customer service for their orders. Amazon handles customer inquiries, returns, and refunds related to FBA orders. This can be beneficial for sellers who want to offload the customer service aspect of their business and rely on Amazon’s expertise in handling customer inquiries and issues. It can help build trust and confidence with customers, as they know they can rely on Amazon’s customer support.
On the other hand, FBM sellers are responsible for handling all aspects of customer service themselves. This includes responding to customer inquiries, managing returns and refunds, and addressing any issues that may arise. FBM sellers have more control over the customer service experience and can provide a more personalized approach to their customers. This can be beneficial for sellers who want to maintain a direct relationship with their customers and have more flexibility in addressing customer needs.
Ultimately, the choice between FBM and FBA in terms of customer service depends on the seller’s preference and resources. FBA can be a good option for sellers who want to outsource customer service to Amazon and focus on other aspects of their business. FBM can be a better fit for sellers who want to have direct control over the customer service experience and have the resources to handle it effectively.
Difference Between FBA And Seller: Dropshipping
Is Amazon FBA the same as dropshipping? No, Amazon FBA and dropshipping are not the same. They are two different methods of order fulfillment in e-commerce.
With Amazon FBA, sellers send their inventory to Amazon’s fulfillment centers, and Amazon takes care of the storage, packaging, and shipping of the products. When a customer places an order, Amazon handles the entire fulfillment process, including customer service and returns.
On the other hand, dropshipping is a business model where sellers do not hold inventory. Instead, they partner with suppliers who store and ship the products directly to the customers. In dropshipping, sellers list products on their website or marketplace without physically possessing them.
While both methods have their pros and cons, Amazon FBA offers the advantage of utilizing Amazon’s vast logistics network and customer trust, whereas dropshipping allows sellers to start with minimal upfront investment.
FBM is typically more suitable for dropshipping as it allows sellers to directly fulfill orders from suppliers or manufacturers. With FBM, sellers can list products on Amazon and when an order is received, they can forward the order details to their suppliers who will then handle the packaging and shipping of the product directly to the customer. This allows sellers to offer a wide variety of products without the need for inventory storage and management. FBM gives sellers more control over the sourcing and fulfillment process.
FBA, on the other hand, is not typically used for dropshipping. FBA is designed for sellers who store their inventory in Amazon’s fulfillment centers, and Amazon takes care of the packaging and shipping of orders. In dropshipping, the seller does not hold inventory but relies on suppliers to fulfill orders directly to customers. Since FBA requires sellers to send inventory to Amazon’s warehouses, it doesn’t align with the dropshipping model.
So, if you are looking to start a dropshipping business, FBM would be the more suitable option as it allows you to work directly with suppliers and handle the fulfillment process yourself. You can list products on Amazon, receive orders, and then forward the order details to your suppliers for them to fulfill. FBM provides flexibility and control over the dropshipping process.
Can You Do FBA And FBM At The Same Time?
Yes, it is possible to use both FBA and FBM at the same time for different products within your Amazon seller account. This is known as a hybrid fulfillment strategy.
Here’s another video from Steven where you’ll learn about how this strategy helps when running out of FBA stocks.
Conclusion
Understanding the Difference Between FBA And Seller is crucial for optimizing your Amazon business. FBA offers numerous advantages, including streamlined fulfillment, Prime eligibility, customer service support, Buy Box advantage, and access to international markets. By grasping these distinctions, you can make informed decisions that align with your business goals, enhance customer satisfaction, and pave the way for growth and success on the Amazon platform.
