Fulfilment By Amazon v/s Fulfilment By Merchant has been very debatable since its inception. It becomes really important to understand what they stand for, how they help the consumers and what is the reason behind opting any of them. Let's start with the basic understanding of each one of them.
Fulfilment By Amazon
Fulfilment By Amazon is chosen by business owners wherein they give the entire pre sales and post sales operations to the Amazon team. The only thing they have to be vigilant about is getting the order from the shopper. Once that is placed on Amazon, everything else is taken care of by the Amazon backend team. Not only is it restricted till the order delivery, even post delivery services are completely handled. This makes it really easy for the business to not worry about the inventory count, customer service, pre-sales promotions and all the backend operations as well. Generally, big scale companies opt for Fulfilment By Amazon as it serves all their purposes including saving on the operational costs as well.
Fulfilment By Merchant
Fulfilment By Merchant is a complete operations authority method where the entire cycle stays with the seller itself. From pre sales campaigns to packaging of the item, its delivery and even the post sales services are catered by the seller directly. Amazon only works as an intermediary channel between the buyer and seller. This is generally opted by the small scale business owners and new merchants who do not have a wide scale inventory to manage.
Fulfilment By Amazon is a smart choice when it comes to bigger companies who have a huge inventory turnover because they have to deal with operations in a regular cycle and this is where Amazon comes in. Inventory management, logistics handling, product delivery and post sales services might seem to be streamlined only because one team handles the entire flow and you don't have to get into the entire ecosystem of a product's life cycle. Understanding the fact that Amazon can also earn you the assurance here of a quality process without any hassle is also an amazing feature.
Fulfilment By Merchant is opted by small scale firms or business owners who have no concerns in handling the entire process by themselves, majorly because they do not have a huge inventory to handle and also it is easier for them to do the packaging and deliver the product. This is also taken up by sellers who are pursuing this just as a hobby. This is where the seller is an artist and sells crafts for passion building and then they can customise and manage the entire product life cycle.
Challenges with FBA/FBM
Fulfilment By Amazon might sound an easier and healthier process with respect to all the operation handling and easy to serve to shoppers but it also comes along with its consequences. The challenge comes up when the product is stuck and the selling slows down. In such cases, Amazon won't take up the responsibility for the warehouse management and the seller has to manage and move out the leftover inventory. The reselling of the same becomes a tedious task. Having a personal store house makes it easy in such cases because you don't have to deal with shifting costs and inventory management.
Fulfilment By Merchant on the other hand has its own pros and cons. Taking the responsibility of handling the entire process can be streamlined till there are a countable and less number of orders and products to handle. Once the orders will increase, the expectations with post sales and customers will increase as well. A lot of times, merchants fail to deliver the same which in turn hampers the shopper's experience with the product and also reflects on the repeat customer percentage.
What To Choose?
A lot of thoughts go into deciding where to land with respect to Fulfilment By Amazon and Fulfilment By Merchant. There are a lot of methods and parameters, seeking which one can decide which one to opt for out of the two.
Scalability : Business and its nature to grow big can be streamlined and businesses are always aware of this fact. If the growth is there in the market and you know the operations cannot be taken care of, Fulfilment By Amazon is the best choice here as they cover everything and that too in a very professional manner. Having said that, if you believe business has just started up and will take its own time to go up, Fulfilment By Merchant is a much suitable choice.
Inventory : Inventory turnover is a big factor in deciding between Fulfilment By Amazon and Fulfilment By Merchant. If warehouse management is required and you don't want to get into logistics handling, then Fulfilment By Amazon is a better choice to go ahead with anyday. On the other hand, if there is no such hassle of handling products and you have a storehouse to manage the minimum inventory, then Fulfilment By Merchant can be opted.
Quality : Operations and its quality becomes very critical when it comes to business and knowing the fact that it adversely affects the business, one should be smart with making the right choice. Fulfilment By Amazon gives the entire responsibility to Amazon to handle the operations and quality of the same is reassured. Fulfilment By Merchant can be equally good depending upon the team or person who is doing it.
Customer Experience : Major factor that is involved in any business is the customer experience part. This is something that can help your business grow by multiple folds and if at all gone for a toss, then can wreak havoc to the business as well. Fulfilment By Amazon takes the ownership of the same and again maintains the professional touch. Fulfilment By Merchant can be of equal standards but has to be kept over and above the expectations so that everything stays good.
Fulfilment By Amazon and Fulfilment By Merchant, both have their own goods and bads. The main decision is to make a smart choice with respect to building business and making it sustainable in the coming future with Amazon.
