Question: FBA or FBM and what is better these days?

[theclueman]

I've seen lots of videos on FBA and also FBM lately including some end of the year deals with AMZscout for helping a person find a product that could win and using FBA to stock it. My biggest problem with FBA is the whole stocking part. When a person ships (say 100) products to Amazon to only find out that it was not a winner then Amazon will start charging you after 90 days for that stock (please correct me if I am wrong).

Now comes FBM (aka: Fulfilled by Merchant). I've read lots of great things about this including NOT having to keep stock in Amazon's warehouse, but the downside is that if you don't consistently (greater than 96%) ship what you commit to then Amazon will close your store. This sounds ok, but if you are blind dropshipping to the customer and your vendor has an issue then you could be closed down.

I'd like to hear everyone's thoughts whom has experience in FBA or FBM and how its working or NOT working for you? Amazon is a huge beast now and there are billions of searches each month and thus if a person gets any product right they could possibly win (with the right mark-up).

So what is it... FBA or FBM?