Hey, this is Max V here.
In this video, I’m going to talk about what is Amazon FBA and how it is different from FBM.
First, let’s have a look at what is FBM. FBM stands for Fulfillment by Merchant and it means that the seller is responsible for everything.
The seller is responsible for sourcing the products and storing them.
The seller is responsible for all the management for delivery, for managing returns, for customer services, etc. Basically, in this model, the seller is responsible for everything.
It is a great system, but you will need to have many systems and processes in place to be able to manage it.
The beauty of this system is that you control everything. The concerns in this model are that you need to spend a lot of time managing everything. If you have all those systems and processes in place, then you can sell your products everywhere. You can sell them on Amazon, you can sell them on your own website, you can sell them in your physical store, on eBay, etc.
Again you will be responsible for everything within your business and you will need to put a lot of systems in place to do that and it will require more investment of your time and money.
Amazon FBA
Now, let’s talk about FBA. FBA stands for Fulfillment by Amazon.
Most people think that FBA equals private label products.
It is not true and FBA is just a model where Amazon manages everything for you.
They store products for you, they manage your orders, they deliver products for you to customers, they handle all customer services, etc.
Basically, with FBA you outsource everything to Amazon except finding and sourcing products. In this part of your business, you will have to handle yourself.
Obviously, there are some pros and cons to this model.
The pros of it are that you can focus more on finding and sourcing products and that you don’t have to think about anything, like storing products, delivering products, and the main thing for me is that you don’t have to be concerned about customer service.
It requires a lot of time to manage your orders, returns, complaints, etc.
One of the cons of this model is that it is a bit more expensive as for managing your products and customer service for you Amazon takes a small fee for it.
But it is really not that important because you will be outsourcing most of your work to Amazon.
Let’s summarise everything.
With Fulfillment by Amazon, you are responsible only for finding and sourcing products.
With FBM you are responsible for everything.
It is up to you to decide which model is suitable for you, but I personally prefer FBA because it’s freeing my time. The most important thing for me is that I don’t have to manage orders and customer service. Everything is handled by Amazon and this is the beauty of this model.
To be honest, you can even connect FBA with your own websites. You can still have Amazon to store your products, deliver them to customers and manage customer service for you.
You can have your website connected to Amazon FBA API and you can automate everything from your own website.
I hope that this was helpful.
