What is the difference between FBA, FBM and SFP?
For Amazon sellers, the option of shipping is crucial. Currently, there are three common shipping ways for Amazon sellers: FBA, FBM and SFP. Each has its pros and cons. Sellers should choose a reasonable shipping method based on their needs to reduce costs and increase efficiency.
FBA (Fulfillment by Amazon)
FBA means that sellers send products to Amazon's fulfillment center for storage. When an end user places an order, the entire process of picking, packing and shipping the products will be managed by Amazon. Amazon ships the goods from the warehouse to the end users on behalf of the sellers. Further, Amazon also provides customer service and return service. Of course, Amazon's warehouse service fees need to be paid.
Advantages
- Save time, manpower and fixed costs
- Logistics efficiency thru Amazon Prime
- Return logistics is helping Amazon users
- Flexibility in shipping locations
- High number of visitors
Disadvantages
- Higher inventory costs regardless of sales
- Other costs make your profit margins melt away
- Inventory planning can be problematic
- Strict regulations and high standards for each product stocking
- Reliable first-mile logistics providers need to be found
SFP (Seller Fulfilled Prime)
SFP also belongs to self-shipping. Sellers build their own overseas warehouses overseas or cooperate with third-party overseas warehouses to store goods in overseas warehouses. After receiving orders, they ship directly from overseas warehouses. After-sales customer service, returns and other work need to be done by the seller.
To qualify for SFP, certain regulations must be met. The most important thing is that the delivery time needs to meet the requirements, otherwise even if you qualify for SFP, it may be revoked.
Currently, many sellers have established their own overseas warehouses overseas, and there are many third-party overseas warehouses available in the market. PGS CBEL overseas warehouses are located in major Asian and Southeast Asian countries, the UK, Germany, Italy, the US, Canada, etc., providing value-added services such as cargo transit, drop shipping, return & repo, and product inspection to meet the diverse needs of customers.
Advantages
- Products carry the Prime badge for better product exposure
- Avoid FBA overstocking
- Lower warehouse logistics costs than FBA
- Higher flexibility than FBA, such as returns and replacements
Disadvantages
- High requirements for delivery, commit to delivery within two days
- Less exposure than FBA. Sellers need to promote the store themselves to increase performance
- The quality of third-party overseas warehouses varies. High-quality overseas warehouse service providers need to be found
FBM (Fulfillment by Merchant)
Fulfillment By Merchant (FBM) is a fulfillment method offered by Amazon that allows Sellers to ship their products directly to Amazon's customers. When an order is placed on Amazon, they will contact the seller, and the seller will be responsible for shipping the product to the customer.
Advantages
- Fully control inventory storage and fulfillment processes
- Lower Packaging and Shipping Costs
- Lower risk of overstocking; better control on inventory
- Better control and design on Packaging Products
- More Product quantities can be uploaded
Disadvantages
- More energy consuming, packaging, logistics, returns, exchanges, etc. need to be solved by themselves
- It is more difficult to obtain traffic, and the weight will be lower than FBA under the same conditions
- Longer delivery time and slower collection period
In general, if you have many years of cross-border e-commerce experience, sufficient funds, accurate product selection and a stable supply chain, you can consider doing FBA. If you lack sources of goods and do not have adequate funds and experience, it is recommended to start with FBM first to gain experience.
PGS CBEL focuses on serving cross-border e-commerce import and export supply chains and warehouses, providing FBA first-mile transportation to Amazon UK, Europe, USA, and Canada, overseas sticker replacement, warehousing and supply chain services to help solve all logistics and warehousing problems in cross-border e-commerce business, and is your more reliable partner!
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