If you’re reading this, the chances are you’re toying with the idea of setting up your own online business. It comes with big challenges and rewards in equal measure. Where do you even start? Amazon is one the largest online marketplaces in the world, and a solid starting point for you to move your goods. The next question you’ll want to answer is how do you dispatch your product in the most profitable way?
What’s the Difference?
There are two main ways to be an Amazon seller. Fulfilment By Amazon (FBA) and FBM (Fulfilment by merchant). What does this mean? In a nutshell FBA is when Amazon takes care of all your postage needs for you – from storing to packing and shipping. Whereas FBM means you take on all responsibility of your products from start to finish.
Pros of FBA
This service gives you so much more flexibility. You don’t have to worry about moving your stock from A to B. It may sound slightly cliche but FBA can handle the small, day to day tasks and allows you to focus on the bigger picture. This can be concentrating on your social media and customer relations, or fine tuning the quality of what you’re selling. Just because you’re a small operation doesn’t mean you have to do everything. Plus – as it covers shipping all over Europe – it can also help with language barriers.
Cons of FBA
You have to pay an inventory fee. If you’re just starting up your business, this service may end up costing you more money than its worth. It depends on the size and scale of your store. You might not have the sheer volume of stock that warrants warehouse storage. Plus if there are customer complaints about shipping, it’s out of your hands. It makes your store much less personable. If you do have a volume of stock that warrants warehouse storage and are worried about the poor customer service associated with FBA, you can always go through a third party company that offers FBA prep and ship services. This way, you get the benefits of shipping through FBA without having to deal with the negatives.
Pros of FBM
You are in complete and utter control of your business. You know where all your products are and can pick companies you trust to get them to where they need to be. Have you considered using Parcel2Go DHL couriers? You can track all of your deliveries and constantly maintain that level of control. Plus, just as FBA would cost you money – FBM can save you money. You can spend your budget on other things.
Cons of FBM
It gives you less time to focus on other elements of your business. When you’re trying to expand as a company, you want to be able to commit your energy to increasing profit and ensuring customer satisfaction. If you’re stuck in post office queues or on the phone with various courier companies, your business may suffer.
Whichever route you end up following for your online business, make sure it suits you and your budget needs. Which option do you think is best?