FBA vs. 3PL Amazon: The Pros & Cons For You

When selling on Amazon, choosing the right fulfilment option can make or break your e-commerce business. 3PL Amazon sellers often weigh the benefits of Fulfilment by Amazon (FBA) against those of using a Third-Party Logistics (Amazon 3PL) provider. Both options have pros and cons, and the best choice depends on your business model, scale, and specific needs.
In this article, we’ll we’ll break down the key differences between FBA and 3PL, helping you make an informed decision on which is the best Amazon fulfilment option for you.
What is Fulfilment by 3PL Amazon (FBA)?
Fulfilment by Amazon (FBA) is Amazon’s in-house fulfilment service that allows sellers to store their products in Amazon’s warehouses. When an order is placed, Amazon handles everything from picking, packing, shipping, customer service, and even returns. FBA is popular among sellers who want to leverage Amazon’s extensive logistics network and benefit from Amazon Prime eligibility.

Benefits of FBA
- Prime Eligibility: Products fulfilled by Amazon automatically qualify for Amazon Prime, furthermore increasing your chances of sales due to faster delivery options.
- Scalability: FBA is an excellent choice for scaling your business since Amazon’s logistics handle a high volume of orders.
- Customer Service: Amazon provides 24/7 customer support for all FBA orders, which therefore means you don’t have to deal with customer queries or returns.
- Inventory Management: With Amazon handling your inventory, you don’t have to worry about warehousing, picking, or packing.
Drawbacks of FBA
- Fees: FBA fees can add up, especially if your products have low margins or incur long-term storage costs.
- Less Control: Since Amazon controls the fulfilment process, you have less flexibility over how your products are packaged and shipped.
- Inventory Limits: Amazon often imposes inventory limits, particularly during peak seasons, which also could affect your ability to stock enough products.
What is a Third-Party Logistics (3PL Amazon) Provider?
Third-Party Logistics (3PL) companies offer a range of fulfilment services similar to FBA but provide more customisation options. With a 3PL, you store your inventory in their warehouse, and they take care of order processing, packaging, shipping, and returns. Unlike FBA, 3PL Amazon providers offer tailored solutions that are more flexible to your business’s needs.
Benefits of 3PL
- Flexibility: 3PL providers offer greater control over your fulfilment process, including packaging and branding options.
- Cost Management: Depending on your order volume and needs, 3PLs can be more cost-effective than FBA, especially if you’re dealing with products that have high storage fees.
- Custom Fulfillment Services: Many 3PLs offer value-added services like kitting, assembly, and custom packaging, which can enhance the customer experience.
Drawbacks of 3PL
- No Prime Eligibility: Products fulfilled by a 3PL Amazon do not automatically qualify for Amazon Prime, which in addition might affect your sales performance.
- Coordination Effort: Working with a 3PL requires more oversight and communication to ensure that your fulfilment processes run smoothly.
- Customer Service: Unlike FBA, most 3PLs do not handle customer service, which means you will need to manage this aspect yourself.
FBA vs. 3PL: Key Factors to Consider
When deciding between FBA and 3PL, it’s essential to consider the following factors:
- Cost Analysis
- FBA Fees: Amazon charges a range of fees, including referral fees, fulfilment fees, and storage fees. Long-term storage fees can be significant if your products don’t move quickly.
- 3PL Costs: 3PL costs can vary widely but are often more transparent. You’ll typically pay storage, pick-and-pack, and shipping fees, with more flexibility in controlling your expenses.
- Scalability
- FBA is perfect for scaling quickly as your business grows, given Amazon’s robust logistics network.
- 3PL providers are more suitable for businesses that require customized logistics solutions, especially when dealing with larger or more complex product lines.
- Inventory Control
- FBA has strict inventory guidelines and limits, which might be restrictive for high-volume sellers.
- 3PL gives you full control over your inventory, allowing you to manage stock levels more effectively and plan for seasonal demands.
- Branding Opportunities
- FBA does not offer much flexibility in branding since Amazon controls the packaging.
- 3PL allows you to create a branded unboxing experience, which can be crucial for customer retention and loyalty.
FBA Prep Services: Essential for Amazon Sellers
If you choose to go with a 3PL provider but still want to leverage Amazon’s FBA network, consider using FBA prep services. These services ensure your products meet Amazon’s strict requirements before they are sent to FBA warehouses. FBA prep services typically include:
- Labeling and Barcoding
- Poly Bagging and Shrink Wrapping
- Inspection and Quality Control
- Bundling and Kitting
Using a 3PL with FBA prep services can be a cost-effective way to get the best of both worlds: the flexibility of a 3PL combined with the sales boost from Amazon Prime eligibility.
Which Fulfillment Option is Right for You?
The decision between FBA and 3PL ultimately comes down to your business’sbusiness’s specific needs. Here’sHere’s a quick guide to help you decide:
- Choose FBA if you want hassle-free logistics, Amazon Prime eligibility, and the ability to scale quickly.
- Choose 3PL if you need flexibility in branding, control over your inventory, and potentially lower fulfilment costs.
Conclusion
Choosing between FBA and 3PL depends on your business goals, product type, and budget. For many sellers, a combination of both options—using 3PL for inventory storage and FBA for fast-selling items—can be the best strategy. By understanding the strengths and limitations of each fulfilment option, you can make a well-informed decision that maximizes your profits and enhances your customer experience.
Are you ready to optimise your Amazon fulfilment strategy? Contact Ascend FBA today for tailored solutions that suit your business needs!