Yup, we have locations in CA, GA, NE and soon TX and we still use FBA because it is still cheaper and faster than if we used SF Prime. The math will make their case in court.
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I couldnât do 5 day shipping for what FBA charges me for fulfillment.
Thatâs NOT counting labor costs even.
People canât seriously think that their 3 - 7 day FBM shipping offer should be treated anywhere close to the same as a 1 - 2 day Prime shipping offer
With all due respect, youâre showing your lack of knowledge of FBM again. Many of my FBM offers with standard shipping are delivered in 2 days. Almost nothing takes more than 4.
I doubt there are any sellers, other than international or handmade ones, who deliver in more than 5 days. Where did you get the idea that a âtypicalâ FBM delivery time is 3-7 days?
Thereâs a reason I stated a range.
First off, many FBM sellers have a 1 - 2 day handling time. If they ship stuff out the same day as the orderâs received, the cutoff is usually fairly early. And if youâre shipping from a coast, as many sellers are in populated states such as CA or NY, you have a 1 - 5 day shipping time depending on where itâs going.
Whereas with FBA, I can order stuff at 10 PM and still get it next day.
Even still, a 2 - 4 day FBM offer is not the equivalent of 1 - 2 day FBA shipping. FBM sellers can also try to hassle you for a return (I donât return much so thatâs not a huge concern for me, but some people return many items), whereas FBA will just give you a refund at the sellerâs expense.
I noticed you did not say âallâ. There is a difference.
Basic logistics for those living on either coast. Three days versus tomorrow/Wednesday is quite significant.
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I couldnât do 5 day shipping for what FBA charges me for fulfillment.
Iâm not going to get dragged into the argument any more here, but I do want to share some factors for those reading along.
Since I ship mostly lightweight items, Iâll use those for this example.
Yes, the FBA fulfillment fee is less than the shipping cost to mail a 4-ounce package.
$4.13 mailing cost (to the furthest zone) compared to $3.22 small standard 4-oz fulfillment fee.
But thenâŚ
- FBM sellers donât pay FBA storage fees
- FBM sellers donât pay inbound shipping costs to FBA
- FBM sellers who keep their product on hand have the opportunity to offer it on any different platform/website. Once its in FBA, itâs only Amazon, or MCF
- FBM sellers donât deal with âgive your stuff away to keep our Prime members happyâ refunds
- FBM sellers donât pay removal fees on product that doesnât sell
- FBM sellers donât have to track what Amazon is doing with our inventory
- FBM sellers donât (generally) have merchandise disappear into thin air
- FBM sellers can put their product up for sale the instant they get it, and donât have to wait for it to be sent to/received by an FBA warehouse
- FBM sellers donât have to worry about storage limits
That doesnât make FBM better than FBA across the board of course, or for every product or seller. But it does mean that you canât simply compare $3.22 to $4.13 and decide FBA is âcheaperâ.
I can do 2-4 day delivery with far less headaches than FBA, for roughly the same costs, and to me, less headaches is valuable.
You donât know me, but I was a long-time SFP (Seller Fulfilled Prime) seller, back when the program was worth doing. So Iâve had the Prime badge, I know the boost it gives, and the added aggravation and free money giveaways that come with it. Before Amazon changed the terms, I shut it down myself because the headaches werenât worth it and because I was doing better without the Prime badge.
Thatâs just one personâs story, and there are some people in this thread who wonât consider that any way but their way could possibly work, so this is just enlightenment for those who keep an open mind.
Everyone should do what works best for them, and there is not a one size fits all answer.
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- FBM sellers have to store their own inventory
- Inbound shipping costs add around 5 - 10 cents / unit for me (product labeling is the bigger expense)
- True, if you sell on other platforms (I donât)
- I will give my stuff away anyway because giving returnless refunds is cheaper than taking and processing returns (this point varies hugely depending on category obviously)
- I liquidate any inventory that doesnât sell. I donât want to hoard non-performing inventory
- FBM sellers have to track their own inventory (Managing a decent size warehouseâs inventory is work as well)
- While true, this expense is generally < 1% of total inventory sent to FBA. Also, FBM sellerâs homes/warehouses have been destroyed by a fire or hurricane.
- This is true and probably one of the biggest plus sides if thereâs supply chain issues or something suddenly picks up in sales
- Same as first point, FBM sellers have to store their own inventory (which isnât free and does take up some limited amount of space as well)
If youâre alone on your listings, thatâs also a completely different game than if youâre competing with other sellers on a listing. If youâre competing with other sellers an FBA seller can charge 5-10% more than an FBM seller and still win the buy box (assuming you sent in enough inventory to be distributed across the country so that FBA can provide 1 - 2 day shipping). So that alone negates all disadvantages and then some vs a single warehouse FBM seller. Also when you were doing SFP, if youâre doing it from 1 location, with ground shipping, they only showed the prime badge to a limited geographic zone around you.
And I also donât know how much you value your own time, and how much you pay your employees, but Iâm betting your employee cost is higher than Amazonâs. I know I canât hire people for anywhere near Amazonâs rates, and I definitely canât make them work as hard.
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All, letâs please take this back to topic and save FBA v FBM for another day 
Very likely, but I guarantee thisâŚ
âŚis why this:
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This is the only reason you can make your assertion. Anything outside of first class will make your economic assertion fall apart.
The overwhelming majority of sellers donât do better without or this conversation would not exist.
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Can you do THIS FBM?
Most stuff I can get here in the Phoenix metro area in HOURS, not days. There have been times I ordered in the late morning and got my stuff in 2 hours. The stuff we ship FBM with other platforms we can deliver in 2 days most of the time, but I canât touch FBA when my stuff is in the FC close to the customer. It absolutely drives sales. You may think many people donât care but over the years we have learned people want stuff now. Hell even I wonât generally order something that takes more than 4 days to arrive because I can get almost anything I want from Amazon in a day or less.
-Ana
ETA I intended to reply to Roxyâs comment.
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I used to not care about shipping time, but after being used to getting things delivered within a day or two, I more or less expect it when buying online.
Please
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Is this really an issue? We pay, on avg, $86.67 a month in storage fees on a lot of inventory and that takes into account peak season.
We pay 1.5 cents per unit in inbound freight.
Anyone that knows what they are doing will keep a reserve for this âin houseâ
Returns are not allowed in my category.
This is easy to control. Start small.
I donât even look at it anymore. 99.87% accuracy is good enough for me. Any loss is written off on April 15th.
This isnât as common as you think and when it does happen it reappears eventually.
Iâll give you this but itâs all about planning. In general, we create a shipment on a Monday, itâs picked up by Thurs and live by the next Mon/Tues.
You win on this one. LOL
I think everyone knows or should know that there are certain items / categories where FBM makes sense but in our case thereâs no choice. We would sell exactly zero units if we werenât FBA. Itâs the nature of the category plus we couldnât pick / pack / ship and deliver in 2 days or less for the $3.86 FBA fee we are charged which includes labor and freight and packaging supplies and gas and tape and etc⌠Itâs impossible.
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Less than a public storage unit. People who make this assertion hold zero value for the space they take up at home.
$0.18 per pound for some LTL shipments. We have oversize items that make it across the nation for less than $5 a unit.
Only drop shippers donât have inventory in which case they donât have it on hand to FBM either.
And hazmatâŚ
Big whoop⌠Returns are returns. No A to Z and no Safe T claims.
If it didnât work so well, the conversation would not exist, as not so many sellers would use it.
Accurate. We lose more in warehouse damages in a year than Amazon loses in 5.
When amazon loses it we get paid the sale price. If we lose it, we get NADA.
The good old Head Start Program keeps inventory alive while enroute. Also many sellers do FBA and FBM when this happens so kind of moot.
Only because you are @ASV_Vites ⌠
Lets not forget the value of ones personal space and time for FBM at home. When one adds in the value of their time and space, the math becomes more obvious.
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Come on now⌠Weâre under control⌠
This is the biggest one for us. Yeah itâs great that FBA fees are less than we could ship ourselves and all, but the TIME I can never get back. If I had to pick and pack and ship all the orders Iâd just give up and go back to a corporate job where they pay me for my time. Yes, I still have production time, but I can create hundreds of units per day for several days and then pack them up and send 'em off to the FC and wait or the money to come in. If we didnât have FBA, we probably would be just a hobby seller and not on Amazon.
You guys beat me to all your answers on the FBA vs FBM points. Our inbound cost is 1.8 cents per unit, and we almost never have any âlostâ inventory. They also pay us full price if damaged or lost in the warehouse. Sometimes I wish they would lose a few cases just to make it easier LOL.
You also have to have the right product. Ours is similar as @ASV_Vites in attributes. Itâs small and light, and itâs not easily copied - think Coca-Cola. If you donât have my formula, you can make something similar (Pepsi) but youâre not going to exactly duplicate it. If you can think of products like this, you should do well on Amazon.
-Ana
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I was going to ask, but finally found the capacity manager Seems weâre in good shape for now.
-Ana
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I have a book on order that was supposed to arrive Sept. 30. All I get is the message that my order has been delayed. The Amazon offer isnât even showing anymore. It is either being drop shipped or Amazon is making sales with a promise that it might show up eventually.
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Vendors mess up just like sellers. Many Amazon items are vendor shipped. Many times the Head Start program is a guess at best when Amazon has receiving delays.
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That was basically the point of the podcast - that Amazon has made this thing that everyone must have in order to be successful, and itâs very easy for them to take it away. There was one company they spoke to who put their stuff on another website for a lower price, Amabots found it and took the buy box away and their business tanked. All fodder for the lawsuit.
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