One of the best ways to make money online is to use Amazon as a vehicle. Amazon is an excellent way to get started with making money with the very low upfront expense or prior retail store experience. Amazon gets millions of people on their site every day that you can tap into to sell your own products.
You have a few options as a seller on Amazon but the two scenarios you need to choose between are whether you do Fulfilled By Amazon, or Fulfilled By Merchant. There are pros and cons to both of them so you need to see how they work back to back to get an idea of which one is best for you after buying an online business. In this article, we will go over what you need to know.
What Is Fulfilled By Merchant?
When you use the FBM system, your products will be listed on the Amazon site, but you are responsible for the storage, picking, and shipping yourself. This can be as simple as storing the products in your garage and then boxing and shipping them yourself when an order comes in. If your operation is small enough then this should be easy enough. You can box up the products ahead of time, but leave them open so you can put in an invoice and other materials when an order comes in. Then you set up rush couriers Chicago, or a similar shipper, to pick up and deliver the package.
What Is Fulfilled By Amazon?
When you use FBA, Amazon handles just about every aspect of the business. When an order comes in, they pick the product, package it, and ship it out for you. In fact, there is no need for you to handle the product at any stage of the process. When you have your product sourced, such as a tshirt from your online tshirt business, you will be responsible for sending it to the designated fulfillment center. This will be done directly from the manufacturer so it is a very fast and efficient way to go about it. Once it arrives, it is listed on the Amazon site and is ready to be purchased.
FBA vs FBM
As you can see, the two systems are very different. You are responsible for just about everything with FBM except for getting customers to your product page. This is fine for a small operation that you can handle yourself or with a few employees. Or, you can hire a team to access the best merchant services. The fees are much lower since Amazon doesn’t store your product or have to deal with the shipping process. However, when you start getting lots of orders, this can be hard to handle yourself. Expending to be able to continue fulfilling gets expensive and complicated.
Letting Amazon handle everything with FBA is much more expensive. However, they handle not just the shipping, but also the customer service and returns. For many people, the high fees are worth it to be able to run a successful operation which allows them to focus on growing the business.
Of course, there are several factors that go into choosing the right Amazon fulfillment solution for your growing small business. FBA, or Fulfillment by Amazon, is a great option for hands-off business owners. After all, Amazon will handle just about all of the heavy work with this option. FBM, on the other hand, leaves a lot more of the responsibility on the merchant. With this unique option, you’ll be responsible for all the inventory, packaging, and shipping requirements. That being said, you’ll need to know about the eCommerce shipping best practices in order to remain successful. At the end of the day, there are pros and cons to each option. It just depends what kind of business owner you are, as well as your profitability goals, operating budget, and additional requirements. Follow the points highlighted above to learn which Amazon fulfillment solution is right for your growing small business.