Those who sell or are considering selling their items on Amazon have two choices: they can opt to fill customer orders themselves through Amazon FBM (Fulfilled by Merchant) or through FBA (Fulfilled by Amazon).
While there are many reasons for merchants to consider both options, today’s focus will be on the benefits of the FBA program.
Established Shipping Knowledge and Relationships
FBA is the superior choice when it comes to shipping.
Due to the company’s contracts with multiple carriers and the many orders sent through them, Amazon receives generous discounts, which are then passed along to merchants in the form of reduced costs for shipping inventory to their warehouses. In addition to this, FBA merchants benefit from free shipping eligibility.
FBA merchants who choose to also become Amazon Prime members are able to benefit from no-cost two-day shipping as well.
Depending on their location, customers may be able to receive their items in one day. This can translate into higher sales revenues because, frankly, shipping has become a huge factor when it comes to ecommerce purchasing.
Compare this with FBM, where you must ensure that all orders are shipped on time, keep an eye on cancellations and cancellation rates, and handle several other aspects of the process on your own.
Better Buy Box Odds
Eligible FBA merchants with professional accounts can also improve their odds of massive sales boosts through wins. The coveted Buy Box allows your customers to add your product directly to their cart with your own button.
Being an FBA merchant can result in consistent Buy Box wins when you maintain cheaper, more reliable, faster, and more convenient order fulfillment, shipping and delivery of your products to customers.
Better Amazon Search Visibility
FBA merchants are likely to have an advantage when it comes to Amazon’s A9 search algorithm, which will award higher rankings to merchants with strong conversion rates and established sales histories.
As long as you’ve optimized your product listing for the best conversion, you can enjoy a very beneficial cycle of high rankings, leading to higher traffic and sales that earn higher rankings.
Amazon’s goal is to move products out of its warehouses as quickly as possible to make room for new products—so FBA merchants with a good track record are likely to take priority on Amazon search.
Existing Warehouse Facilities
Unlike Amazon FBM, which requires you to have your own space for fulfilling orders and tracking inventory, being an FBA member means you can take advantage of facilities that already exist.
This offers many significant benefits for merchants, who would otherwise have to keep close watch over order processes to ensure efficiency, not to mention sacrificing a portion of their own income to purchase space to house inventory, along with hiring employees to handle and process it.
Additionally, FBA merchants who are able to move their inventory at quicker rates can earn unlimited inventory and storage of their products at Amazon warehouses.
Even if you’re a merchant selling in small volumes, you can still benefit from limitless space. If Amazon sees the demand, they will essentially be helping you scale (from a storage standpoint) as needed.
Streamlined Order Fulfillment
The obvious difference between FBM and FBA is that with the latter, Amazon handles order fulfillment for you. With FBA, a merchant simply has to send part of their inventory to Amazon. From there, the company handles everything, from picking to shipping.
All merchants who are unfamiliar with this fairly complex process can benefit from choosing to have their orders fulfilled by Amazon. The program eliminates the need to organize orders, print labels, or pick and pack, saving high-volume merchants hours of time.
If you’re a merchant who sells through more than one channel, the FBA program will also allow you to have those orders fulfilled by Amazon through multi-channel fulfillment, or MCF.
Professional, End-to-End Customer Management
As an entrepreneur, how you engage with your customers and help resolve their problems is really the lifeblood of your business’s success, and can indeed be a full-time pursuit without the other pressures and demands of being a business owner.
It is here that leveraging FBA really shines—with a slew of professional customer service experts who are available around the clock, you never have to worry about missing a single customer call, chat request or email.
Instead, you will have professional customer service agents representing your business as they solve issues and answer questions directly as soon as they arise, all at no extra cost to you.
Returns and Exchanges Processing
Just as with its warehouse and inventory space, merchants enrolled with FBA also benefit from a company that’s well-equipped to process customer returns and exchanges on their behalf.
For example, should a customer wish to return a product they feel to be defective, Amazon will ship a new item, adding any returned items that are still usable back into stock.
Products confirmed to be defective will either be disposed of or returned to the merchant for inspection and disposal for a fee.
The FBA Bottom Line
Being a business owner means handling day-to-day tasks, inventory tracking, storage, organizing orders, packing, shipping and returns, etc.
Oh! And in addition, you get to focus on growing the business through product improvement, customer relationships, marketing and promotion. You are a rockstar.
Of course, there are business owners who possess the time and experience necessary to accomplish all of these tasks efficiently. However, the reality is that most business owners are inexperienced with these vital tasks or simply don’t have the time required to execute them all.
New business owners typically need a lot of time to grow their business to the point where the above aspects can be largely automated. While it may not be realistic or even possible to accomplish this in a short time, FBA can eliminate many of the common growing pains that plague new entrepreneurs.
Elevate Your FBA Experience With National Positions
Taking full advantage of the FBA experience means making full use of effective strategies like live shopping, brand pages, A+ pages, and more.
National Positions’ Amazon team can help your ecommerce business succeed with streamlined customer strategies that will help you dominate in this competitive arena.
For more information about our Amazon marketing services, you can email us at Marketing@NationalPositions.com, visit our contact page, or click here to download our free Amazon Marketing PDF. Looking for more valuable info about Amazon Prime, expanding your business, or other topics? You’ll find it all on our blog.