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FBM stands for Fulfilled by Merchant. With FBM, the seller handles inventory storage, packing & shipping products. The seller is responsible for any late, missing, or damaged product deliveries.

Pros:
The seller has better control over inventory and the overall order fulfillment process.
Lesser fee since most functions are performed by the seller.

Cons:
Increased responsibility – The responsibility of managing inventory, packaging & shipping may be overwhelming for some sellers.

Overhead costs – Even though FBM sellers won’t pay fulfillment and storage fees, they have to bear overhead expenses, including their own storage, fulfillment, and shipment costs.

Missing out on Amazon Prime members – Over 50% of Amazon shoppers are Prime, and 1-day/2-day free shipping with Prime is often a purchase criterion. Without being a Prime seller, many of the potential customers are missed out who may have purchased the product if it were Prime. Besides, enrolling for Seller-Fulfilled Prime is a sizable task.

With Amazon Seller Flex, the seller stores the inventory at his own warehouse. Once the orders are received, the products are to be packed in Amazon-branded packaging material. The order is collected by Amazon Transportation System (ATS) and shipped on the same day, to be then delivered within one to two days to the consumers. The seller flex program can be chosen for heavy products that incur additional storage costs in the FBA warehouse.

Pros:

Increased Sales – All products earn the prime badge. Customers will be able to see accurate delivery times and will pay for prime one-day or two-day shipping.

Better control over inventory – No need to store inventory at Amazon warehouse to earn the prime badge.

No monthly Storage Fees: Since the inventory is stored at his own warehouse, the seller saves a lot on the storage fee.

No warehouse storage limits: Amazon warehouses have storage limits assigned for every seller. This inhibits sales during holiday seasons.

No removal, pick & warehouse shipping fee.

Cons:

Increased manpower – Functions such as filing claims, checking returns, in-bounding inventory & removing inventory from flex require additional manpower.

Additional IT cost – The seller needs to have label printers, UPS inverter, etc. This leads to additional expenses.

Technology fees – Seller Flex program requires the seller to pay ‘Technology fees’ at Rs. 10/order.

In FBA(Fulfillment By Amazon), the inventory is stored at Amazon’s warehouses. Amazon is responsible for picking, packing, delivering, providing customer service & managing returns.

Pros:

The seller gets the Prime badge & products become eligible for unlimited free 1-day & 2-day delivery options.

The seller need not worry about warehouse space, since inventory is stored at Amazon’s fulfillment centers.

Less manpower, since Amazon handles most operations.

Cons:

Since Amazon handles most of the fulfillment process, the seller has to pay a fee. Moreover, this program is not ideal for low-cost items.

Amazon has a set of requirements & guidelines for products coming into the warehouse for FBA. The seller has lesser control over the inventory.