When should I merchant fulfill vs when should I use FBA?

By Katharyne Shelton

If you are selling on Amazon, the benefits of using their Fulfillment service, 'Fulfillment by Amazon' are huge.

The big three reasons for me are:

  • 1. Convenience - Get everything you want to sell out of your house, ship it all to Amazon in one go on your own schedule and let them handle all the individual shipping. This frees up your space and time so you can really concentrate on scaling your business up faster.
  • 2. Sales - There are estimated to be as many as 50 million Prime users on Amazon with 30-40 million in the US alone. (RBC Analyst figures) These customers want to use their Prime shipping benefits. They've paid for them. Many of them will even select the option to ONLY view Prime listings. Using FBA means that your product has that little 'Prime' logo beside it. Not only that but you will be in the buy box more often, meaning that customers actually see your product as a default. In fact, 82% of sales are made through the buy box. Basically using FBA means that in most cases you can set higher prices on your products than merchant fulfilled sellers (sometimes MUCH higher prices) and make far more sales.
  • 3. Feedback - FBA makes you immune to A-Z claims which can threaten your account. It also makes it much more likely that Amazon will remove unjust negative feedbacks. If the post office screw up, Amazon will take the blame - not you. In a climate where account suspension is a real threat, the more you can do to safeguard your account, the better (and many troubled MF sellers have saved their account by agreeing to switch to FBA).

With these three factors in mind, I generally only FBA. The exceptions and the reasons I may merchant fulfill are as follows:

  • 1. A time-sensitive deal. Amazon went out of stock on top 100 toy Crayola marker makers just as my local Walmart had a clearance deal. I knew I had to sell them before Amazon came back in stock. I got them listed MF and sold a couple before I'd even left the store. If I'd waited for FBA, Amazon would be back in stock and the prices would be low again. This also applies if you have new popular toys or grocery products that no-one is yet selling but are sure to be hits such as Pop Tarts or M&Ms in a flavr like pumpkin spice.
  • 2. Hazmat. Amazon's warehouse simply can't handle some products such as nail varnish or perfume. Do check the requirements for shipping these. They usually will need to be shipped ground.
  • 3. Expiration dates. You have to have a product at FBA's warehouse 90 days before it expires. They will dispose of it 50 days before the expiration. If you have a product that falls under these limits, you may want to merchant fulfill. Be reasonable with this though. Don't sell a bottle of 100 daily vitamins if there are only 30 days to the expiration date.