The million-dollar question: Is SFP or FBM better for me as an Amazon seller? Truth is, every business and its needs are different. There is no right or wrong fulfillment option, it’s simply a matter of choosing what will work best for your business. In this article, we will be discussing the advantages and disadvantages of both SFP and FBM to help you make the best choice. Outside of FBA (Fulfilled by Amazon) there are two fulfillment methods available to Amazon sellers:
SFP, or Seller Fulfilled Prime, is a fulfillment option that allows you to fulfill orders within your own warehouse and have the orders delivered directly to your customers while using the Amazon Prime badge. SFP is ideally for sellers who want to manage and/or control the fulfillment, shipping, branding and storage aspect of their businesses while having access to the Prime badge and its audience.
FBM, or Fulfilled by Merchant, is a fulfillment option where the seller (merchant) is responsible for fulfilling all orders that are placed using his or her own resources. These sellers do not have access to the benefits of being a Prime seller. FBM is ideal for sellers who ship larger or heavier items, have a smaller product volume, low turnover or lower profit margins.
Like anything in the world, there are pros and cons to both options. Let’s go over the advantages and disadvantages of both methods to see which is best for you.
Advantages of SFP:
- Access to Amazon Prime’s audience of over 112 million shoppers.
- Easy to manage stock across more than one channel.
- Can control what is included in your packaging such as branding, marketing materials, etc.
- Helps avoid costly fulfillment and storage fees from FBA by using your own warehouse, or a 3PL like Fulfyld.
Disadvantages of SFP:
- Extremely strict requirements enforced by Amazon (for example: must offer 2-day shipping option and ship over 99% of your orders on time).
- Must apply and go through a trial period for the program.
- Adhere to the SFP’s Terms and Policies to maintain your status.
- Must purchase all shipping labels through Amazon.
Advantages of FBM:
- Able to avoid Amazon’s strict FBA requirements.
- Full control over your business’ operations, like inventory and fulfillment.
- Control over branded packaging material.
- Fewer fees paid to Amazon.
Disadvantages of FBM:
- Can’t offer Amazon Prime for your products.
- Customers may be turned off by slower delivery times (since you don’t offer Prime) and extra delivery fees.
- Trying to win the “Buy Box” will be a challenge if you don’t sell a unique product.
Again, there is no right or wrong approach when choosing the best shipping option, and no method is “one size fits all.” There are several factors that come into play when making this decision. It’s a matter of thoroughly evaluating your business’ priorities and what you wish to accomplish when it comes to the types of products, fulfillment and operations you need.
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