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FBA vs. FBM with the help of a 3PL (Third-Party Logistics) Firm

What's Best for Your Company? 

Amazon’s pandemic related growing pains have caused many Amazon vendors to reconsider their e-commerce fulfilment path.  Can you have the best of both worlds (FBA and FBM)? Can you use FBA for some items you sell and FBM for others?   The answer to both questions is a resounding YES.

How do you choose between having Amazon do everything from handling orders, to customer service and returns or maintaining some control over your brand equity? Even when going the FBA route, you still have strict requirements you may want help with.  Going at it totally alone with your own staff might be daunting, but you have an option when you choose a 3PL company like PhaseV.  By selling using the Amazon platform and having your own fulfillment team handling the details and customer service, you can have the best of both worlds.   Get the control you need for your brand and the exposure to customers you want on the Amazon platform with a Third-Party Logistics (3PL) firm like PhaseV.

 

Which fulfillment method will work best for your products?

 

FBM Fulfillment by Merchant using a 3PL firm like Phase V:

Pros: Cons:
  • Exposure to Amazon customers without having to depend on Amazon to fulfill the orders
  • Better profit margins
  • More packaging control with your branding
  • Ability to fulfill offline and online orders from the same warehouse
  • Fulfilment of orders from different online portals, not limiting your products to the Amazon portal
  • More overall control of your business
  • Ability to compete for the “Buy Box” with Seller Fulfilled Prime (SFP) program
  • More inventory control, restocking notices before you run out of product
  • No hefty storage fees for slow-moving inventory
  • Control over the whole customer experience
  • Help promote loyalty with your customers through custom reward program inserts included in your shipping
  • Stiff competition with FBA sellers
  • More responsibility for your fulfillment
  • Difficult, but not impossible to join Amazon’s Seller Fulfilled Prime (SFP) program, your 3PL company can help you navigate the process
  • If Amazon has a shipping delay and the customer leaves a negative review, Amazon will not remove the review even though it was an issue on their end
  • You may have lower position on Amazon’s search results unless you have a unique product

 

OR Fulfillment by Amazon:

FBA Pros: FBA Cons:
  • Exposure on the most popular marketplace for online shopping
  • More opportunity to win the “Buy Box” since your product may receive better results in the search engine
  • Amazon-provides fulfillment services, they take over contact with your customers (could viewed as a pro or con)
  • Amazon Prime eligibility – Prime shoppers tend to buy more often than other consumers
  • Customer service and returns conducted by Amazon
  • High fees for fulfillment and storage
  • Smaller profit margins
  • Competition from other sellers
  • Wrong items picked and shipped
  • Limited control over packaging
  • Amazon not the Seller controls the customer service and customer engagement
  • Limited access to your customer base
  • Tax liabilities as far as collecting sales taxes in some states

 

 

Phase V can help you navigate either FBA or FBM to take advantage of the popularity and vast network of Amazon’s seller platforms, to help establish your e-commerce company and grow your brand. Take care of all your e-commerce needs with customized solutions that apply to all portals, managing your inventory, brand message while staying within your fulfillment budget. Phase V Fulfillment’s tech-enabled 3PL order fulfillment services partner with you to customize your fulfillment processes to suit your company’s needs. We work with you to automate your packing processes and streamline your fulfillment operations; help you reduce costs and increase sales with on-time two-day deliveries and live customer service that enhances customer experience. From click to shipped, Phase V partners with you, on an individual basis to help scale your company as you grow.

Call Phase V Fulfillment for a free quote today!