Understanding Amazon Fulfillment Options: MFN vs. FBA

One of the biggest decisions a brand will have to make when selling on Amazon is how to fulfill the deluge of orders that will (hopefully) be coming in through the e-commerce platform. There are two main options available to brands—the Fulfillment by Amazon (FBA) service package and the Merchant Fulfilled Network (MFN). Both offer various pros and cons, but how can you know which option is right for your brand?

Is Amazon FBA the Answer?

Leveraging FBA services is a great idea for brands that see high turnover of products and sell a large number of units weekly. A brand will send units to an Amazon warehouse for easy access, and the Amazon team actually manages, packs, and ships the products.

One additional plus of the FBA program is the customer service component. Amazon handles all of the service, return, and exchange details of products, making it easy for brands to focus on other more important product development details. FBA takes the work out of distribution and order fulfillment—for a price, that is.

With FBA, Amazon runs the behind-the-scenes operations, making it easier for products to show up in the Buy Box or in bestseller sections. FBA also makes products eligible for Prime offers, which can appeal to more customers who know exactly what they want and don’t need to waste time on unnecessary research. Amazon’s entire distribution network is available to FBA partners, offering incredible benefits and efficiencies.

Unlocking MFN

In the Merchant Fulfilled Network, brands handle all aspects of fulfilling orders that come through Amazon, from storing the merchandise to packaging and shipping it out. Brands going through the MFN can use their own packaging and shipping style and can add unique bits of customization, such as personalized thank you notes.

Brands leveraging the MFN are also exempt from the multitude of charges and fees those going through FBA are subject to. FBA fees charge for everything from per-square-foot of storage space in an Amazon warehouse to packing supplies to products with long shelf lives. The covetable Amazon customer service also comes at a price—one that smaller brands with long sales cycles might not be able to handle.

Brands that truly value personalization and brand integrity will find the MFN ideal because of the lack of rules and regulations. Sellers who go through FBA must adhere to a host of Amazon shipping standards, which outline the size, weight, and packaging requirements of certain products.

So Who Wins?

There is no clear winner or loser in the FBA vs. MFN debate. FBA services are definitely more appealing from a distribution perspective, but the fees associated with the program perks can quickly become overwhelming—especially for brands that are just getting into the Amazon game. MFN is the answer when thinking about costs and customization, but keeping up with the logistical fulfillment operations can become tedious and put a strain on resources.

Ideally, a brand could benefit from the perks of a FBA relationship with the smaller investment of a MFN strategy. This is where dedicated seller relationships come into play. Working with a single seller transfers the FBA fees over to the seller, while the brand becomes solely responsible for product production, therefore alleviating many pains associated with storage and fulfillment.

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Photo by Kyle Glenn on Unsplash