FBA and FBM are the two logistics and distribution methods of the world-renowned online shopping e-commerce platform Amazon, and they are also topics that many cross-border e-commerce companies often pay attention to. Understanding the difference between FBA and FBM is very important for cross-border e-commerce.
However, before answering the question of "the difference between Amazon FBA and FBM", we first need to understand "FBA" and "FBM" in detail.
The full name of FBA is Fulfillment by Amazon, Amazon warehousing and delivery. In layman's terms, FBA means that sellers send products to Amazon's overseas warehouses in advance. When customers place an order, Amazon will provide you with a series of services such as packaging, delivery, returns, and consulting after the order is placed. The FBA process is "Seller-Amazon-Customer".
The full name of FBM is Fulfillment by merchant, and the seller is self-delivery. To put it simply, under the FBM model, Amazon is only a sales platform. After the customer places an order, the seller is responsible for a series of services such as packaging, delivery, return and after-sales consultation of the seller's products. The process of FBM is "seller-customer", which is relatively simple.
After understanding FBA and FBM, let's answer the next question: What are the specific differences between FBA and FBM?
different delivery methods
For sellers who use FBA for delivery, when the customer places an order, the Amazon warehouse center will start delivery, and there is only one delivery channel.
And sellers who use FBM delivery can choose from more delivery methods. Sellers can flexibly choose suitable logistics methods according to buyers' needs and product characteristics, such as international postal services, international express delivery, and dedicated line logistics services. At the same time, sellers using FBA can also better control logistics costs.
Delivery time varies
For sellers who use FBA for delivery, the products are stored in the local Amazon warehouse center. When the buyer places an order, Amazon can quickly deliver the product to the buyer, which greatly shortens the delivery time. Therefore, the delivery time of FBA is guaranteed, and the delivery speed is relatively fast.
Sellers who use FBM for delivery generally involve cross-border transportation. There are many uncontrollable factors in the delivery timeliness of cross-border transportation, such as customs clearance and warehouse arrangement, which will affect the delivery timeliness. Therefore, the delivery speed of FBM is relatively slow, and the logistics cycle is generally relatively long.
different investment costs
The investment cost of FBA is relatively high, and the financial pressure is relatively large. First of all, sellers who choose FBA need to purchase products in advance and send them to Amazon's warehouse. In order to ensure sufficient inventory, this requires a large amount of stocking funds. In addition, Amazon warehousing and delivery services are not free. Sellers need to pay Amazon storage fees, logistics transportation fees, long-term storage fees, excess storage fees and other fees according to different situations.
The investment cost of FBM is relatively low, and the financial pressure is relatively small. Sellers who use FBM do not need to stock up a lot, nor do they need a large warehouse, which greatly reduces investment costs. In addition, FBM sellers can find logistics carriers by themselves, so that they can also have certain control over logistics costs.
It is also worth noting that FBM is called "no supply model" by some sellers. After the buyer places an order, the seller can place an order on the third-party source platform, and then the third-party source platform will complete the final delivery and delivery. Sellers who adopt this FBM model do not need to stockpile goods or warehouses, the investment cost is greatly reduced, and the financial pressure is relatively small.
Sellers who use FBA have more control over the pre-order process. Amazon will provide you with a series of services such as packaging, delivery, returns, and consulting after the order is placed. This means that after the order is placed, a series of control rights such as subsequent packaging, distribution, returns, and consultation are handed over to Amazon.
Sellers who use FBM have full control over all business processes such as inventory, delivery, and after-sales returns. If you are a multi-channel seller, FBM allows you to have more precise control over product stocking and inventory and more precise control. In addition, sellers have absolute control over the final packaging of their products, and sellers can be creative and promote their brands through beautiful and appropriate packaging.
Get traffic differently
Sellers who use FBA tend to have higher search rankings and tend to have easier access to traffic. Many Amazon customers will want to receive the goods quickly, and FBA has guaranteed timeliness, and it is easier to obtain the buy box, so the probability of FBA products being selected will increase, the product conversion rate will be higher, and the ranking will naturally increase. It will also be easier for top-ranked items to get traffic again.
However, sellers who use FBM are relatively passive in this regard. The products of sellers who use FBM do not meet the Prime standard, and they are also at a disadvantage when competing for the Buy Box, and naturally there will not be too much traffic.
Buyer feedback and experience are different
Sellers who use FBA bring buyers a good logistics experience, but FBA sellers have less direct communication with customers. FBA sellers store and ship products through the Amazon platform, and Amazon fully represents the sellers to conduct after-sales consultation, returns and other services with customers. It can be seen that FBA sellers rarely communicate directly with buyers during the entire product sales process, and can only get feedback from buyers through the platform.
Sellers who use FBM can communicate directly with buyers, including but not limited to product quality, logistics timeliness, and after-sales service. Through direct communication with buyers, sellers can have an intuitive understanding of buyers' needs and ideas, which can also bring inspiration to optimize business lines, and can also better control customers' shopping experience and improve praise rates.
In summary, we can see that FBA and FBM are very different, and each has its own advantages and disadvantages. When making choices, cross-border sellers should make appropriate choices based on the characteristics of their own products, sales goals, and financial pressure.
In general, from the perspective of the product dimension, the FBA model is more suitable for those commodities that are light in weight, small in size and cheap in price, and it is best to have commodities that will not be unsalable due to factors such as seasons and festivals. FBM is more suitable for selling goods that are likely to be unsalable due to seasonal festivals and other reasons. Personalized customized products, exclusive products and bulky and heavy goods are also more suitable for the FBM model.
From the perspective of sellers, the FBA model is more suitable for large sellers with relatively more capital, who want to save operating costs and have relatively high anti-risk capabilities. The FBM model is more suitable for small sellers who are not sufficiently funded, have low risk resistance capabilities, or do not have the ability to independently produce products. Finally , what the editor wants to say is: whether you use FBA or FBM, you must choose according to your actual situation.