FBA vs. FBM


#1

For anyone who went from FBM to FBA can you tell us how it impacted your sales volume?

I read up on FBA earlier this week and it does seem to provide compelling reasons to do it.

Does it double your sales? Triple? More?

Thanks!


#2

Thanks. Our products are small packages, lightweight and sell for $64 and up. As far as shipping to Amazon and paying storage fees, those costs seem like they’d be an equitable swap for increased sales.

Thanks for the response.


#3

Thanks MAV. Earlier in the week I read up on FBA and used their calculator. If inventory is held one month before it sells, we’re looking at about 5-6% less revenue per item. If sales increase even slightly, it’s worth it.

I was thinking of trying it out by sending in 10-20 of each item. If they don’t move and we want to stop paying storage fees, we can always have them shipped back. It seems like it would be worth trying.

To start it up we’ll probably send 10 of our 3 or 4 most popular items.

Thanks!

Edited by: Applied Physics Laboratories LLC on Mar 3, 2017 6:41 AM


#4

We do use both FBA and FBM. Out deciding factors in deciding which channel to use are listed below:

  • FBM shipping costs (can we ship at a low cost)
  • FBA inbound shipping (how much per unit will it cost us to ship units to Amazon)
  • FBA storage fees (monthly, LTSF, etc.)
  • FBA additional fees
  • Pricing differences (can we effectively charge more with FBA to offset additional fees)
  • Item ranking (how popular is the item)
  • Product Competition (is Amazon selling it – how many other sellers FBA/FBM)
  • Product Pricing (more comfortable selling high priced items through FBA since Amazon is responsible for shipping and damages should any happen).
    Over the years, we have become better and determining channel. As a general rule, we do sell more through FBA. Depending on the product and competition, this increase can be as high as 3X.

In our experience, buyers are willing to pay a higher overall price when able to use the ‘Prime’ account to get 2-day free shipping. So, we can actually pocket a little more profits with FBA than with FBM on most items.

I would recommend you evaluate each product for the items mentioned above. You can review FBA fees through the [Fulfillment by Amazon Revenue Calculator|https://sellercentral.amazon.com/fba/profitabilitycalculator/index] which can help with the decision.

I would also recommend that you start slow. Pick a few products and send them in. Get used to the FBA shipping and labeling – how to manage and track FBA shipments. See how it goes and expand after you have some practical experience.

Also, remember, you can sell FBA and FBM at the same time on a product, so you do not have to shut down sales while getting inventory to Amazon, nor generate no sales should you run out of FBA inventory.

Not everything is positive. For example, you can expect to have a higher return rate and have returns that are approved by Amazon beyond the standard return period. You will incur removal fees for unsellable products that are returned. As well as the additional storage and fulfillment fees – so make sure you adjust your product pricing to help offset what the calculator linked above shows as your additional fees.


#5

Depends on what you are selling but YES it can increase your sales greatly.(Possibly even more that triple)
Just be advised that your expenses will greatly increase also.
You will have to pay shipping to get your items to an Amazon fulfillment center.
You will pay storage fees
You will have no control over returns (and very little control over refunds)(if you disagree with a refund you will have to open a case every time)
There are extra handling fees for every order(These handling fees apply for every item in the case of multiple item orders.)
In the case your items are slow moving you will pay long term storage fees every Feb. and Aug. for any items in storage over 180 days and another extra fee for items in storage over 365 days
There will also be a fee to have any items returned to you or if you do not want them back there will be a fee for disposal of your items.

As you can see you need to do your homework before jumping into this or anything else that Amazon offers


#6

In my experience, FBA will move your items much +faster+ if your prices aren’t crazy. For example, I sent in roughly 100 items to FBA leading up to Black Friday, Christmas, etc. I bumped my price up a bit from my FBM selling point to cover expenses and added a few bucks because I know people will pay a little more for Prime.

All but 4 of those items sold much faster than FBM, but there are other factors to consider. What you’re selling, when and for how much. It’s not a guarantee that your sales will increase (all things being equal), but it’s about as close as you can get.


#7

Up 460% the first month

Up 1009% EOY

Prime rules all


#8

Def use the FBA calculator, because it sounds like it could be a GREAT choice for you!


#9

Its for Fast Selling Items…Not “Long Tail” Books…

AZ Doesn’t Want To be Your “Storage Unit.”


#10

FBA is a strong booster. its not even to compare.

but you gotta be very care full

do not send slow moving items - or high competing items


#11

Your FBA sales will depend on the kind of items you are selling, the number of competitors, the price you sell for and most importantly if you have enough criteria to take away the Buy Box away from whoever has it now.


#12

This is what I do, when launching new items to FBA. Almost no risk, and often great rewards.

Then just work on a 1 month sell/ship schedule

> I was thinking of trying it out by sending in 10-20 of each item. If they don’t move and we want to stop paying storage fees, we can always have them shipped back. It seems like it would be worth trying.
>
> To start it up we’ll probably send 10 of our 3 or 4 most popular items.
>
> Thanks!
>
> Edited by: Applied Physics Laboratories LLC on Mar 3, 2017 6:41 AM


#13

All you had to do was turn commingling off


#14

Be wary of Amazon commingling your stock with that of other FBA sellers. Once I started receiving returned items that were different from what I had sent to Amazon’s warehouses, I quit using the FBA program.


#15

Ah. I don’t recall that being an option back when we were doing FBA. It has been a while. :-S


#16

I would echo the sentiments to avoid items where there is already competition in Amazon’s FBA warehouses. FBA did provide a significant lift for us on some SKUs…but once we had competition on those SKUs in FBA, it became a race to the bottom price-wise and FBA was nowhere near as profitable as it had been.


#17

I’ve heard of that but I don’t think that will happen to us.

Thanks.


#18

Thank you but we are a manufacturer. Nobody else makes our products which are patented. The only other resellers are fortune 500 supply chains which don’t sell on Amazon, and even if they did, I’d like that too!

Our products also have a high ratio of price:volume & weight which makes FBA more equitable.

Looks like we’re going to test the waters on FBA.

Many thanks to all for the invaluable responses.


closed #19