If you’re an Amazon seller, you’re familiar with the acronyms SFP, FBA, FBM, and MCF. But do you know the critical differences between the fulfillment options and how your business can benefit from each?
Amazon Seller Fulfillment Prime (SFP)
Amazon Seller Fulfillment Prime gives third-party sellers the ability to make their products Prime-eligible and allows them to list them as such. Sellers who use Amazon Seller Fulfillment Prime (SFP) can also access direct warehouse-to-customer shipping. Alternatively, they can opt for a shipping option from any third-party logistics company that qualifies.
Amazon Prime third-party sellers can display an Amazon Prime badge on their selected items when shipping directly from their warehouse to their customers with 2-day or free standard shipping.
Fulfillment by Amazon (FBA) and Amazon Seller Fulfillment Prime (SFP) also offer a bit of a competitive edge compared to other options. FBA and SFP sellers have an increased chance of making their products one of the first recommendations for buyers when they win the “Amazon Buy Box.” The Amazon buy box rewards the best-performing sellers that can boost their sales even further.
While third-party sellers without Prime qualifications still can earn this coveted honor, it will take a lot more work due to their lower priority. Of course, it doesn’t help that many Amazon Prime shoppers filter out any search results that aren’t labeled Prime.
In the end, Amazon Seller Fulfillment Prime is a more likely way to succeed as a third-party seller than any non-Prime option. This is because Amazon prioritizes Prime shipping options and tends to push buyers towards those choices, indirectly stifling third-party sellers who aren’t selling through Prime.
Fulfillment by Amazon (FBA)
Fulfillment by Amazon (FBA) differs from Amazon Seller Fulfillment Prime in a few ways. One of the most significant differences on the seller’s end is that rather than shipping your goods and products directly from your warehouse to your customers, products are warehoused in an Amazon facility.
With FBA, Amazon is responsible for picking, packing, and shipping orders. Sellers hand over their entire stock to Amazon and let Amazon control storing, managing, and shipping your inventory and fulfilling orders on your behalf. Then, you’re just there to make and provide the goods.
With Amazon Seller Fulfillment Prime, you can choose between shipping your products directly from your warehouse or involving a qualified 3PL service provider. With Fulfillment by Amazon, you don’t have a choice. Instead, Amazon automatically fills the third-party logistics service provider role.
The fees that usually come with using a 3PL still apply generally, including storage fees and shipping fees (as calculated by an item’s weight and size). However, some significant benefits come with Fulfillment by Amazon.
For example, third-party sellers that opt for FBA can have fees waived if they meet certain conditions. You could also apply to get your products certified as eligible for free 2-day or standard shipping. Your products also fall under Amazon’s FBA customer support and return services. While FBA may not be the best option for everyone, it’s worth considering.
Fulfilled by Merchant (FBM)
Fulfilled by Merchant is the opposite of the Fulfilled by Amazon program. The brunt of the work goes to the sellers, who are in charge of storing, listing, selling, managing, and shipping inventory themselves. They will record their products on Amazon, where buyers can purchase, but that’s the end of Amazon’s involvement.
When a purchase occurs, the seller will ship it from their warehouse or a third-party logistics company. As a result, the shipping fees that a customer gets charged will almost always align with Amazon’s standard shipping rates.
That means it doesn’t matter if the shipping credit is less than the total shipping cost, which brings us to pricing. Since the seller will carry out the vast majority of the process, they need to consider the various fees they’ll have to pay when deciding on a price for a product.
However, there is an option for sellers using the Fulfilled by Merchant method called the Professional Plan. Third-party Amazon sellers that opt into the FBM Professional Plan can customize their shipping templates and set their shipping prices (though it’d be wise to stay within reach of Amazon’s standard shipping fees).
If you don’t mind handling things like shipping and customer service in-house, then Amazon’s Fulfilled by Merchant option could be the best for you. It gives you almost complete control over the process, meaning you won’t have to worry nearly as much about problems that may arise on Amazon’s end.
Amazon’s Multi-Channel Fulfillment (MCF)
Amazon’s Multi-Channel Fulfillment implements a pooled inventory, allowing you to use a variety of channels, including your website, if you have one, to fulfill orders. According to Amazon, this option has a lower cost, and the shipping and order fulfillment processes are reliable.
You can ship your products as though Amazon is selling them. For example, you could offer your customers the choice of standard 3-5 day shipping, 2-day expedited shipping, or even priority shipping, which ensures delivery within one business day.
A pooled inventory also means that shipping prices will remain consistent since products are shipped to customers from the same warehouse. This will also make it easier to predict how much you should charge for various items. Amazon assures that there will only be one set low fee and never any hidden ones or unexpected surcharges.
The benefit is to lower overall costs and reassure your customers that they’ll have access to consistently quick and easy shipping. However, as with many things, Amazon Multi-Channel Fulfillment (often abbreviated as AMF or MCF, depending on your sources) has pros and cons.
The most significant benefits of using AMF all relate to shipping. But what about the drawbacks?
The leading complaint third-party sellers using AMF have is that few selling channels are supported. Anything that’s not through Shopify or WooCommerce isn’t allowed to be listed, let alone fulfilled. You can’t use eBay, Walmart, or other popular commerce options.
Another significant issue is that Amazon has tight restrictions on the products and product categories you can sell. For example, toys, games, subscriptions, and more are all categories that Amazon has placed heavy restrictions on for AMF sellers.
Anything you try to sell in these categories will be subject to review from Amazon’s team, and they can refuse the listing for almost any reason. Some people have even stated that they weren’t given a reason, and Amazon wouldn’t let them make the listing.
In addition, no returns are allowed, and they’ll slap an Amazon branding label on everything, even if it’s from your business website. This is a problem, but customers tend to get pretty angry if a product isn’t what they expected and then find out they can’t return or replace it.
Conclusion
Amazon Fulfillment can be great for ecommerce sales, but some options offered are more beneficial than others. The best choice will depend on your resources, abilities, and unique business models, so it’s best to research before signing up and committing.
Fulfillment logistics can be complicated if your operation uses multiple methods across your sales channels. With StoreAutomator, you can streamline every step of your ecommerce operations from a centralized platform.
Ready to learn more? Request a live demo to see how StoreAutomator can save you time and money by streamlining your operations and helping you grow your sales.
