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FBA, short for ''Fulfillment by Amazon,'' refers to the logistics services provided by Amazon for sellers. Amazon introduced FBA services for third-party sellers in 2007, allowing them to use Amazon's own warehouses. Sellers send their goods to Amazon's FBA warehouses, and Amazon takes care of receiving, sorting, shipping, customer service, returns, and other related services. Amazon charges fees based on the characteristics of the goods.
On the other hand, there is FBM (Fulfillment by Merchant), also known as ''self-fulfilled'' shipping. Shipping from overseas warehouses falls into the category of self-fulfilled shipping. With FBM, the seller is responsible for the entire process of getting the goods from their hands to the customer's hands. In essence, it means ''handling the shipping yourself.'' FBA's shipping method is relatively more straightforward for sellers.
Differences:
Logistics Method: FBA involves sending goods to Amazon's overseas warehouses before order fulfillment, and Amazon handles shipping. FBM doesn't require sellers to stock goods in advance; they handle shipping through domestic and international courier services.
Traffic Acquisition: FBA primarily relies on both on-platform and off-platform advertising to drive traffic, as fewer items listed on Amazon doesn't generate sufficient traffic. FBM relies mainly on the traffic provided by Amazon's platform.
Average Order Value (AOV): AOV varies between the two models due to differences in logistics and operational costs.
Shipping Speed: After an order is placed, FBA typically has a three-day shipping period, and buyers receive their products promptly. In contrast, FBM may take up to a month for the buyer to receive the product.
Payment Timing: Amazon's current platform rules dictate that sellers receive payment only after the goods have been received by the buyer, with the shipping speed also influencing the payment timeline.
