All Things Shipping | Sep 06, 2022

Amazon Shipping For Sellers Explained: Amazon FBA vs. FBM

Hasan Nabulsi

As an e-commerce merchant, listing your items on Amazon can be a great way to increase your customer reach. Boasting over 300 million active users across 180 countries, there’s no doubt that selling on this platform can make your products more visible to consumers than ever before. Amazon shipping ensures your products are accessible to them.

Amazon simplifies the shipping process for sellers through two core services: Amazon FBA (‘Fulfilled by Amazon’) and FBM (‘Fulfilled by Merchant’). Each of these programs offers unique benefits, and each comes with its own disadvantages as well.

Ready to get started? Here’s everything you need to know about how Amazon shipping for sellers works.

How Does Amazon Shipping Work For Sellers?

Thanks to Amazon’s streamlined shipping process, sellers can easily receive, deliver, and confirm orders.

At a broad level, when a customer places an order, Amazon generates a pre-shipment notification. This communication shows what’s on the order and designates a shipping deadline. When payment is received, a payment confirmation notification is sent.

Next, the order’s status moves to “unshipped.”

When an order is in “unshipped” status, it means one of two things. For sellers using Amazon FBA, this status is automatically updated once a carrier picks up the package. For Amazon FBM merchants, this stage means online sellers must submit their packages to a carrier and tracking details must be entered manually before the order status can advance.

Finally, the order is delivered and the buyer can leave feedback.

Amazon FBA vs. FBM Defined

The primary difference between Amazon FBA vs. FBM is who processes and ships sold orders. Sellers participating in Amazon FBA rely on Amazon’s employees to stock, pick, pack, and ship their products. Online sellers will store their inventory at an Amazon warehouse or fulfillment center so that Amazon handles the entire fulfillment process.

Amazon FBM merchants, on the other hand, use Amazon’s platform to list and sell, but handle the stocking, picking, packing, and shipping on their own.

Pros and Cons of Amazon FBA

Perhaps the most obvious advantage of using Amazon FBA is convenience. When you choose this option, Amazon takes care of the bulk of the heavy lifting (literally). In other words, you won’t have to worry about storage space, allotting time to pick orders, procuring packing materials and packing orders, or working with carriers.

Another major benefit of Amazon FBA is that your company will automatically be enrolled in the Amazon Prime shipping program, which both allows customers to receive eligible packages in as little as two days and simplifies the return process.

That said, the time and effort you’ll save come at a steep cost. Though you can count on Amazon to handle shipping, you’ll be charged a fee for each package shipped. This fee amount varies based on package size and weight, but generally ranges anywhere between $2 and $10 per package.

You’ll also pay storage fees in exchange for storing products in Amazon warehouses. During Amazon’s standard season between January and September, storage fees range from $0.53 per cubic foot to $0.78 per cubic foot. However, these fees increase to anywhere between $1.20 per cubic foot to $3.63 per cubic foot during the holiday months of October through December.

Pros and Cons of Amazon FBM

Opting to enroll in Amazon FBM gives you a greater level of control over packaging and allows you to find the most competitive rates for shipping and storage, which could save you money in the long run.

While you won’t be automatically included in the Amazon Prime program as an FBM participant, choosing to fulfill your own orders doesn’t bar you from joining. You can still register to become a part of the program, as long as Amazon accepts new applicants. Otherwise, you can always join the waitlist.

Though you’ll need to handle storage, picking, and packing, websites like Shippo simplify the Amazon shipping process at a comparatively lower cost. Being able to easily import orders your Amazon orders, compare shipping rates, and print labels using Shippo’s user-friendly web app or shipping API mitigates many of the disadvantages of opting out of the FBA program.

You’ll also be able to schedule pickups from the nation’s top carriers, so you won’t have to wait in line at a carrier’s retail store. You’ll also be able to get free shipping supplies from carriers like USPS and UPS to help limit the cost of shipping.

Other Amazon Shipping Options For Sellers

Beyond the FBA and FBM programs, Amazon offers a few additional options on its platform that aim to simplify shipping for sellers. These services further solidify Amazon as one of the best virtual marketplaces for retailers.

Seller Fulfilled Prime (SFP)

If you opt to fulfill your own Amazon orders via Amazon FBM, you won’t be automatically enrolled in Amazon Prime. However, you still have the option to enroll through Seller Fulfilled Prime, or SFP. This program is not always open for enrollment, but you can add your email to the waitlist if needed. This allows you to offer the fast and easy shipping option that Amazon users have come to expect without giving up oversight of your shipping process.

FBA Onsite

Amazon FBA Onsite allows sellers to participate in the Fulfilled by Amazon program while bypassing storage fees. This is possible since participation in FBA Onsite allows sellers to store and package their own products. Amazon then picks up orders from the seller’s warehouse and decides the best way to ship them.

Amazon Seller Central

Amazon Seller Central is an all-in-one resource that helps Amazon sellers manage their stores more efficiently. This portal allows you to easily list products, update product details, contact seller support, manage shipping, and even sell internationally with Amazon Global Selling.

Shipping with Amazon

Finally, shipping through Amazon is one of the easiest, most convenient ways to sell on the platform. Through this program, you’ll use Amazon’s staffed warehouses to store, pick, pack, and ship your orders. When you ship this way, their customer service team will also help you handle customer complaints and returns.

Amazon Shipping Options For Customers

Depending on the type of Amazon shipping you choose, your customers will have a few different shipping options.

The most popular type of shipping option is Amazon Prime. Offered completely free to Prime subscribers, Prime offers delivery in as little as two days and guarantees simple returns. You are automatically enrolled in the program as an Amazon FBA participant and can apply toward enrollment if not.

If you or your customer is not enrolled in Amazon Prime,  a standard or expedited shipping option is available, which is charged at checkout. However, remember that Prime items are typically better sellers, as consumers prefer the certainty that comes with expedited shipping.

Is Amazon Shipping Tracking Available for Sellers?

Amazon’s seller hub, called Amazon Seller Central, allows sellers to manage shipments, check inventory, and more. It also includes a shipment summary tab where sellers can track shipments. If you’ve shipped items on your own, outside of Amazon, the tracking options available to you will vary depending on the carrier you’ve chosen and the service line you’ve selected.

How to Offer Amazon Free Shipping

Luckily, there are no sign-up requirements to offer Amazon free shipping in your store. Simply navigate to shipping settings and set rates to $0.00 for shipping in Amazon Seller Central.

Best Ways to Ship Amazon Orders

Amazon offers flexible shipping through Amazon Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM) programs. If you’re looking for convenience, Amazon FBA might be the best option for you. However, the luxuries you’ll enjoy come with a hefty price tag.

Luckily, there’s another way.

With Shippo, you can maintain full control over your shipments, as our user-friendly platform allows you to sync Amazon orders, get discounted rates on shipping labels, add shipping insurance to Amazon packages, and more.

Get started for free today or reach out to our team of shipping specialists for more information.

Hasan Nabulsi is the Content Marketing Manager at Shippo.

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