For new Amazon sellers, choosing the right fulfillment method is one of the most critical decisions you'll make when launching on the platform. Amazon offers three primary fulfillment options—Fulfillment by Amazon (FBA), Fulfillment by Merchant (FBM), and Seller Fulfilled Prime (SFP)—each with distinct advantages and challenges. This guide will help you navigate these options and determine which is best for your business strategy.
What Do These Terms Mean?
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Fulfillment by Amazon (FBA): A popular choice for its convenience. You send products to Amazon’s fulfillment centers, and they handle storage, packaging, shipping, and customer service. Plus, your products earn the coveted Prime badge.
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Fulfillment by Merchant (FBM): With FBM, you retain control over the entire selling process—storage, shipping, and customer service. However, without the Prime badge, your products may see less visibility.
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Seller Fulfilled Prime (SFP): SFP allows you to offer Prime-eligible products while fulfilling orders from your own warehouse, provided you meet Amazon’s strict shipping and customer service requirements. It offers the benefits of the Prime badge without relying on Amazon’s fulfillment services.
When to Use Each Amazon Fulfillment Method
Deciding which method to use depends on your business model, product type, and operational capacity. Let’s break it down.
Fulfillment by Amazon (FBA) is ideal for businesses which:
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Have High Turnover: Small, lightweight products that sell quickly.
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Desire Hands-Off Operation: Amazon manages logistics and customer service.
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Lack Existing Logistics Setup
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Need Cost Efficiency: Can be more affordable than establishing a complex supply chain yourself.
Fulfillment by Merchant (FBM) may be best for sellers who:
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Want Control Over Their Customer Experience: You directly manage customer interactions.
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Have Oversized Products: Suitable for large or heavy items, which can incur high FBA fees.
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Have an Existing Logistics Setup
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Turnover Products Slowly
Seller Fulfilled Prime (SFP) could be the best choice if you:
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Want the Prime Badge AND Inventory Control
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Have Varied Product Sizes
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Have Experience Shipping Quickly and Reliably: You are able to adhere to Prime’s tight delivery standards.
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Want to Avoid Amazon Storage and Fulfillment Fees
Case Studies
We have a lot of experience here at Attrisys helping sellers of different sizes and experience levels enter the Amazon marketplace. Let’s explore how we assisted three different sellers approach their fulfillment strategies and their unique requirements.
Client A: Manufacturer of Handcrafted Furniture
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Challenge: The client needed a cost-effective way to handle large, fragile items with specific shipping requirements.
This small company featured bulky products, and given that their turnover was relatively slow, they didn't want to their products to sit in a third-party warehouse for a long time. They also needed a fulfillment option that allowed them to maintain control over packaging and shipping, ensuring the fragile nature of the items was respected. Additionally, keeping costs manageable was critical, but so was ensuring customers received their purchases safely and on time.
After weighing their options…
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Strategy: The client chose Fulfillment by Merchant (FBM).
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This method gave them control over the shipping process to ensure safe handling of delicate items.
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By avoiding FBA fees, they kept their margins intact.
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They could personalize packaging, maintaining direct customer contact to enhance service quality.
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They missed out on the Prime badge, but felt that shoppers in the market for bespoke, handcrafted furniture would not expect or require Prime delivery service.
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Client B: Supplier of Popular Electronics Accessories
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Challenge: Managing rapid turnover for high-demand products like charging wires, power banks, and flashlights, especially during seasonal peaks.
Given the fast-paced nature of their sales, this client needed a logistics option that could handle high volumes efficiently, especially during busy times. With customer satisfaction and speed being priorities, the ability to offer Prime-eligible products without managing their own logistics was appealing. But how could they balance visibility, speed, and costs?
Their decision…
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Strategy: They opted for Fulfillment by Amazon (FBA).
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FBA allowed them to leverage Amazon’s vast logistics network, ensuring quick and reliable shipping.
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The Prime badge increased their product visibility and drove more sales.
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They could focus on marketing and scaling their business while Amazon handled logistics.
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Client C: Creator of Organic Skincare Products
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Challenge: The need for fast, reliable shipping to preserve product freshness and boost customer satisfaction.
This client prided themselves on their unique, and award-winning packaging solutions. They put great value in the unboxing experience, and wanted to make sure that opening every product was an experience equal to that of applying their products. The brand wanted the benefits of the Prime badge, but didn’t want to relinquish control over their unique packaging and shipping methods. They needed a solution that would allow them to maintain this control while ensuring fast shipping.
After considering the options...
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Strategy: The client opted for Seller Fulfilled Prime (SFP).
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This gave them the ability to control fulfillment, ensuring product quality remained intact.
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They offered Prime shipping without relying on Amazon’s fulfillment centers.
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Custom packaging aligned with their brand values, enhancing sustainability and customer loyalty.
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Final Thoughts
Choosing the right fulfillment option can be pivotal to your success as an Amazon seller. While FBM offers control and cost savings, FBA provides scalability and customer trust. SFP strikes a balance between control and Prime eligibility but requires careful management to meet Amazon’s high standards.
Starting with FBM can give you time to learn the ropes, while transitioning to FBA or SFP later can provide more growth opportunities as your business expands.
Ultimately, aligning your fulfillment strategy with your business model will help you achieve efficiency, customer satisfaction, and long-term success.
