top of page

Comparing FBA, FBM, and FBM with a Third-Party Fulfillment Provider: What's Right for Your Business?

Updated: May 17, 2023



As an e-commerce seller, one of the key decisions you'll have to make is how to fulfill your orders. There are several options available, including Fulfillment by Amazon (FBA), Fulfillment by Merchant (FBM), and FBM in conjunction with a third-party fulfillment provider. But which option is the best fit for your business?


In this article, we'll compare FBA, FBM, and FBM with a third-party fulfillment provider and help you understand the pros and cons of each option. By the end of this article, you should have a better idea of which fulfillment option is the right choice for your business.


What is FBA?




FBA, or Fulfillment by Amazon, is a fulfillment option offered by Amazon to sellers on its platform. It allows sellers to store their products in Amazon's fulfillment centers and have Amazon handle the shipping, handling, and customer service for their orders.

One of the main benefits of FBA is convenience. Sellers don't have to worry about managing their own fulfillment and customer service processes – they can simply send their products to Amazon and let the company handle the rest. This can be especially appealing for small or new businesses that don't have the resources or infrastructure to handle fulfillment tasks in-house.


Another advantage of FBA is fast shipping. Products stored in Amazon's fulfillment centers can be shipped quickly to customers, which can improve customer satisfaction and increase sales. Additionally, products fulfilled by FBA are eligible for Prime shipping, which can increase their visibility and appeal to Prime members.


However, there are also some drawbacks to FBA. One of the main drawbacks is cost. FBA can be more expensive than other fulfillment options, FBA fees for storage, fulfillment, and customer service can be more expensive than other fulfillment options. These fees can add up, especially for sellers who have a large inventory or sell products that are bulky or heavy.


Another potential drawback of FBA is limited control. Sellers have less control over the fulfillment and customer service process when using FBA, as they are relying on Amazon to handle these tasks. This can be a disadvantage for sellers who want more control over their fulfillment and customer service processes.


In addition to the cost and control factors, there are also some eligibility requirements for FBA that sellers should be aware of. To use FBA, sellers must meet certain standards for shipping speed and quantities of items being replenished at Amazons, and they must also meet Amazon's requirements for product packaging and labeling. Sellers who don't meet these requirements may not be eligible to use FBA or may be subject to additional fees.


What is FBM?



FBM, or Fulfillment by Merchant, is another fulfillment option available to sellers on Amazon. With FBM, sellers are responsible for storing, packing, and shipping their own products, as well as handling customer inquiries and returns.


One of the main benefits of FBM is cost. FBM is generally less expensive than FBA, as sellers don't have to pay fees for storage, fulfillment, and customer service to Amazon. This can be a major advantage for sellers who have the space available, limited budget or who sell products that are expensive to store or ship.


Another advantage of FBM is control. Sellers have more control over the fulfillment and customer service process when using FBM, as they are responsible for managing these tasks themselves. This can be especially appealing for sellers who want more control over their business operations or who have specific fulfillment and customer service needs.


However, there are also some drawbacks to FBM. One of the main drawbacks is time-consuming. Sellers are responsible for managing their own fulfillment and customer service tasks, which can be time-consuming and resource-intensive. This can be a challenge for sellers who don't have the resources or staff to handle these tasks in-house.


Another potential drawback of FBM is slower shipping. Products fulfilled by FBM may take longer to ship to customers, which can impact customer satisfaction. This can be especially problematic for sellers who are competing with Amazon or other sellers who are using FBA or other faster fulfillment options.


What about FBM with a Third-Party Fulfillment Provider?



FBM in conjunction with a third-party fulfillment provider is another fulfillment option available to sellers on Amazon. With this option, sellers are responsible for managing their own customer service tasks, but they can outsource some or all of the fulfillment tasks, such as storage, packing, and shipping, to a company that specializes in these services.


One of the main benefits of FBM with a third-party fulfillment provider is cost. Using a third-party fulfillment provider can be more cost-effective than using FBA, as sellers don't have to pay fees for storage, fulfillment, and customer service at the level that Amazon charges. This can be especially appealing for sellers who don't meet the requirements for FBA or who have a large inventory or sell products that are expensive to store or ship.


Another advantage of FBM with a third-party fulfillment provider is customization. Third-party fulfillment providers often offer a range of services and can be more flexible and adaptable than FBA. This can be especially beneficial for sellers who have specific fulfillment and customer service needs or who want to tailor their fulfillment process to their business.


A third-party fulfillment provider can also offer expertise and support. Many providers have teams of professionals who can help sellers with a variety of tasks, including order management, inventory management, and shipping. This can be a valuable resource for sellers who are new to e-commerce or who are looking for support and guidance.


However, there are also some drawbacks to using FBM with a third-party fulfillment provider. One of the main drawbacks is the need to research and choose a reputable and reliable provider. There are many third-party fulfillment providers available, and not all of them offer the same level of quality or value. Sellers need to do their due diligence and choose a provider that meets their needs and budget.


Another potential drawback is the need for coordination. Sellers who use a third-party fulfillment provider will need to coordinate with the provider to ensure that orders are fulfilled accurately and on time. This can be a challenge for sellers who are new to outsourcing or who are not familiar with the fulfillment process. Professional 3rd party logistics teams are usually great at their timing and know a ton about the compliance requirements for the most popular businesses to ship to. They are flexible and usually happy to make changes on the fly.


One example of a reputable and reliable third-party fulfillment provider is Logistech Solutions.



Logistech Solutions is a company that specializes in e-Commerce fulfillment, and it offers a range of services, including customization and adaptability to meet the specific needs of its clients. The company's proprietary fulfillment software allows for efficient and effective fulfillment, and its team of experts is dedicated to providing top-notch customer service.


Logistech Solutions can help your business keep up with FBA compliance, fulfill your FBM orders, and can provide stand-alone fulfillment services. This makes the company a versatile and flexible option for sellers who are looking for a fulfillment solution that meets their unique needs as they grow. You can learn more about Logistech Solutions here: logistech.com



Conclusion:


In conclusion, FBA, FBM, and FBM with a third-party fulfillment provider are all viable options for e-commerce sellers. Each option has its own set of benefits and drawbacks, and the right choice for your business will depend on your specific needs and goals.

FBA is a convenient and fast option that can be appealing for small or new businesses, but it can be more expensive than other options. FBM is generally less expensive than FBA, but it can be more time-consuming and may result in slower shipping. FBM with a third-party fulfillment provider can offer cost-effective and customizable solutions, but it requires research and coordination.


Logistech Solutions is a quality third-party fulfillment provider that specializes in e-Commerce fulfillment and offers customization and adaptability to meet the needs of its clients. The company's proprietary fulfillment software and team of experts make it a valuable resource for sellers looking for cost-effective and efficient fulfillment solutions. Logistech Solutions can work with FBA, FBM, or as a stand-alone fulfillment provider, making it a versatile and flexible option for sellers.


Ultimately, the best fulfillment option for your business will depend on your budget, resources, and goals. By carefully considering your options and evaluating your needs, you can choose the fulfillment solution that is the best fit for your business.


By Joshua Cobb, writer, and Assistant, the OpenAI language model, researcher.


28 views0 comments

Comments


bottom of page