Amazon is counted as the biggest eCommerce site across the globe. There are more than 3 million active sellers recorded in 2021, and this gives a huge opportunity for sellers to find their success on this platform.
There are different fulfillment methods that amazon offers such as FMA ( fulfillment by amazon), MCF ( Multiple channel fulfillment), SFP ( Seller fulfillment prime), etc.
With each different acronym, Amazon offers the sellers to get their orders to the customers.
FBM is one of the fulfillment services provided by amazon which stands for Fulfillment by the merchant. This is one has its pros and cons, and how it’s different from other fulfilments.
To know more about FBM, here is what will help you.
What To Know About FBM?
Amazon FBM or Fulfilled by Merchants a method where sellers take the responsibility for fulfilling products that are purchased on amazon.
Here, Sellers can manage the FBM directly or they can partner with a third party to provide the logistic services.
Also, the Amazon sellers are responsible for taking care of order fulfillment, inventory storage, customer services, and returns.
With FBM, the sellers have the control of handling their whole shipping process.
Who And When You Should Choose FBM?
Choosing Amazon FBM can be tricky as there are lots of things you need to see as a seller. For this one there are some basics yet important ones that you need to understand.
FBM is ideal to consider when you have exclusive small volume products that come with a low-profit margin.
Also, anyone who is starting a new business and has small volumes or excessive products. FBM is for them to consider, you can also take this if your products are hard to ship or have handmade products to sell.
If you are considering when you need to choose Amazon FBM, here are a few pointers for you :
- Choose the FBM when you have products that have a lower frequency in sales.
- This also a good option to choose when you are looking for a cheaper option than FBA, this one is much affordable and you get much better control over what you are selling and customer communication.
- Products that have lower profit margins, will help in saving the money on storing to the warehouse and storage fees that come with FBA.
- You can consider it when the number of products is smaller, they will cut the price on shipping charges.
Also, you can pick up the services because you have :
- Handmade products as many handmade sellers use the FBM for ensuring the orders arrive.
- Third-party fulfillment services which are not Amazon or other than amazon, as FBM gets cheaper.
How Amazon FBM Works?
Amazon FBM has similar work similar as the sellers require to fulfill the orders when the purchase is placed on Amazon. Here they have to choose self-fulfillment or 3PL.
This one is usually for the new merchants as it’s available for them mostly.
Whereas FBA needs approval, time, and demonstration of inventory turnover, and that’s why most of the small sellers chose to do the fulfillment on their own.
Well to understand how Amazon FBM works, here are the process that can help:
Listing The Products
After you complete the process of creating your account on Amazon Seller Central. You can start losing your products.
However here you need to focus on adding all the information that will help in finding the right buyers for you. Also, it will improve the conversion when you add the videos, images, descriptions, etc.
Make sure that you are following your marketing strategy for Amazon when you are listing your products.
Storing The Products In Your Fulfillment Center
Well, here you will need your fulfillment center, deepening on the numbers you got and distributing the products based on the locations.
If your business is small you can choose the storage center. Also if your house is enough for storing the items for the short term, you can keep them there.
This will help you in keeping your shipping cost low. Well, it also affects the average shipping zone.
Shipping Your Products
When you receive the order notification, you can ship your products. Make sure you have the delivery frame selected for your customer and it should be matched with the given timeframe by amazon.
Add these details to your checkout page, so the customer will know when they can expect the delivery. Make sure to consider the handling and transit process.
Well either purchase the shipping labels from Amazon or get it own. But never forget to add the order tracking as it’s important for the customer as well as for you.
Why You Should Consider Amazon Fulfilled By Merchants?
Well, there are different reasons why amazon is fulfilled by the merchant and is considered beneficial for you. To know more about this, here are few points for your help.
Get Access Of Amazon Customers
As a seller, you already know that Amazon is the biggest platform where you can sell products. Apart from having a good name in the market and huge numbers of buyers, Amazon offers various benefits to the sellers.
You can get amazon customers by paying a small fee. Unlike FBA where you need to pay a hefty amount, this one includes a much affordable fee rate to get access to the customers on Amazon.
Have The Control Of Your Business
You can use the opportunity to build the branding.
However choosing the FBA where the boxes include the logo and name of Amazon, can affect badly for your brand as people might think it’s an Amazon product instead of yours.
With FBM, you don’t have to worry about this. You can ensure that the customer is getting the experience you want them to have.
Avoid Strict Requirements Of FBA
Amazon changes the FBA requirement without even letting the seller adapt and know.
As for the sellers, the sudden changes can be a hassle to deal with. But when you choose the FBM, you just need to follow some of the rules as well as penalties in case of not fulfilling the requirements.
Get Support Much Better
Amazon can be difficult when it comes to getting in touch with humans. Having direct contact with the customer can play a major role, however choosing FBM can help you in having better support by your side.
Why Should You Take Time To Consider FBM?
There are some points that might not work in your favor. No doubt FBM is affordable and helpful for the new sellers. But it also comes with certain drawbacks.
There are certain processes that can be tough, and also your sales from FBM might not always be considered as Amazon FBM sales.
Regardless, there are some points that you need to consider.
No Prime Badge
If You are switching or choosing FBM over FBA, the major problem you get here is you are not getting any prime badge by amazon.
This means your products are limited and there will be no advantages that come from switching prime badges.
The prime advantage that you get here is the fast delivery option for the customer. It gives two days and within the customers get their orders. This works to a great advantage for the seller.
The prime badge attracts more customers and people have more trust in that badge. This won’t be happening if you are choosing the FBM.
Customer Services Are On You
When you are dealing with FBA, the greatest advantage you get is customers’ services handled by the Amazon team. They deal with the problems that occur with the customers like queries, return, or refunds.
But when you switch to FBM, this service is completely on you. You need to manage the customer services on your own.
Spending Time On Self Fulfillment
When you let Amazon handle your packaging, delivery, and other related processes, it saves you from doing extra work and handling it on your own.
This saves time which lets you use it somewhere more important.
Amazon FBM sellers are required to do the fulfillment on their own and this takes time. This takes the attention and energy which you could use for some other high-value work.
Costing Of In House Fulfillment
If you are choosing the amazon FBM, you are handling the storage too.
This means you either need the warehouse if you have too many objects, or you need to have the storage room. If your items can be stored in your house, you need to maintain the in-house fulfillment.
In any option here you have to spend money which makes the deal costly.
What Are The Fees oF Amazon FBM?
Amazon FBM is based on fee structure, well here you get the three main options as referral fees, monthly fees, and fees for per sold items.
All of them are beneficial depending on what you are looking for. To know how much it will cost and what are the other things you need to focus on, here is a description for you to know.
Well you are product is listing on amazon and here every sale of yours will be noted as a referral. The fees depend on the product type selling on the platform.
The price range can go from 6% to 45%. That’s why it’s important for you to check the fee tale of referral subscriptions.
If you are looking for a more affordable option that lets you sell the products without costing additional fees.
Amazon subscription costs around $39,99 per month. You can consider this one if you are looking for per month fees.
What To Choose Between FBA and FBM
Well, the answer depends on certain factors, mostly including the type of business you are doing. But if you are confused to start with, here are some pointers from both side that might help:
You can consider choosing FBM if you are :
- Having a slow turnover.
- Comfortable with dealing with customer inquiry on your own.
- Backed up with an efficient team that can do fulfillment.
- Selling items that are heavy or large.
- Having a decent facility for storage or small inventory.
Well, you can consider choosing FBA, if you are :
- Having a fast turnover.
- Can’t deal with fulfillment services on your own.
- Items are small and lightweight
- Don’t have enough time to deal with customers.
- Have large inventory but without the storage facility
- Have a better profit margin.
What Are The Best Practices For FBM Sellers On Amazon?
When you are selling your products using FBM, here are a few best practices that you can consider :
Use The Buy Shipping
This will help you in ensuring that you are delivering your orders on time along with tracking the numbers. For this, you can consider buying shipping directly from Amazon with their Buy Shipping feature.
When your products get the orders, you will get the option where amazon asks to ship directly from them.
You can access this by going to settings and choose “Orders” and then “ Manage Orders”. Here you will find the ‘Buy Shipping’ button.
Just verify your information and click to confirm. Once you are done, get the print of the label.
Comply With Drop Shipping Policy Of Amazon
This is an important point, only when you are a dropship. There are some policies that every drop shipper requires to follow if you are selling on amazon. It includes:
- Be the seller and record the products.
- Remove the invoices, packing chips, external packaging, and any other information that identifies the third party.
- Identify yourself as the one who is selling the product when you are adding the external packaging, invoices, and other information
- Be responsible when it comes to accepting customer returns on your products.
Get A Clear Return Policy
Make sure that you have a return policy that is clear and simple. The instructions should be included in your product packaging along with a return address that is valid.
This is important to remember that when you are an FBM seller, you are going to handle all the returns on your own.
And it’s not an option, when your customer is returning the product on Amazon, you have to accept and process it.
Add The Tracking Numbers
Amazon will require the tracking numbers on all your products. This is why you need to add the numbers when you are shipping the products.
If you are doing it through Amazon, the tracking numbers will be auto-generated and then will be sent to your customers.
Manage The Delivery Times
Amazon has strict policies and when it comes to delivery, they want to ensure that all goods are delivered on time.
That’s why it’s important that you have a fixed time for all of your work like confirming the order to shipping to your customers.
If you are choosing prime or premium shipping, you are going to need the guaranteed date for the shipping products.
Frequently Asked Questions ( FAQs)
Amazon‘s FBM is beneficial if you are maximizing the product and reducing your expenses. This will help you in lowering the prices on expenses, focusing on your products, and increasing the products.
Fulfillment by amazon or FBM gives control to sellers of handling the shipping process. Instead of paying Amazon to handle the services and shipping, sellers require to use their resources and ship the items directly to their customers.
Depending on what you are looking for, if you want a smaller scale with small margins, then FBM is much better and affordable than the FBA.