With more than 200 million subscribers worldwide, Amazon Prime is the most important shopping offer for your brand.
Fulfillment by Amazon (FBA)
FBA is an Amazon service where Amazon takes over the storage, packaging and shipping of your products. Sellers send their products to an Amazon logistics center and Amazon takes care of the rest.
Advantages:
- Access to Prime customers and fast shipping
- Customer service and returns management by Amazon
- Good opportunity to sell your products internationally
- Low shipping and storage costs
Disadvantages:
- Less control over stock levels and the shipping process
Fulfillment by Merchant (FBM)
With FBM, the seller takes care of the storage, packaging and shipping of the products themselves. Sellers are responsible for the entire process, from the customer order to the delivery of the product.
Advantages:
- More control over stock levels and the shipping process
- Potentially lower costs if you already have efficient logistics in place
- No fees for storage at Amazon
Disadvantages:
- No automatic access to the Prime program
- Sellers must take care of customer service and returns management
- Requires efficient internal logistics system and possibly higher shipping costs
Seller Fulfilled Prime (SFP)
SFP is an option for FBM sellers who want to offer Prime shipping to their customers without warehousing their products on Amazon. To qualify for SFP, sellers must meet strict performance criteria and comply with Amazon’s delivery requirements. Amazon offers options with DHL or DPD as shipping partners
Advantages:
- Access to Prime customers and fast shipping without using FBA
- More control over stock levels and the shipping process
- No storage fees at Amazon
Disadvantages:
- Requires efficient logistics system to fulfill Prime shipping requirements
- Sellers must take care of customer service and returns management
- Possibly higher shipping costs
Choosing the right fulfillment option depends on various factors, such as your company size, your product portfolio, your resources and your business goals.
FBA is ideal for sellers who want to benefit from the reach of the Prime program and outsource customer service to Amazon. However, if you want more control over your inventory and shipping process and already have an efficient logistics system in place, FBM may be the better option.
Seller Fulfilled Prime offers an interesting mix of both: You retain control over your inventory and shipping process, but can still offer Prime shipping. Note, however, that the requirements for SFP are high and an efficient internal logistics system is required to meet Prime shipping standards.
It is important to carefully weigh up the pros and cons of each option and choose the one that best suits your business model. Switching between fulfillment options is possible if your requirements change over time. By continuously analyzing and adjusting your fulfillment strategy, you can ensure that you are maximizing the potential of your Amazon business.
