With more than 300 million customers in active use and a huge customer base, the ability of Amazon to transport your goods is truly amazing. However, if you sell your products on Amazon and then ship your products directly to consumers, you have to ensure that your process is seamless and free of errors. Errors won’t just cause you to lose money, but they could harm your reputation online and deter people from purchasing your products at a later date. Therefore, it is important to have Fulfillment by Seller (FBM).
If you’re just beginning to become an Amazon seller, do not miss out on the opportunity to review the information below to get a better understanding of the procedure for Amazon FBM.
Table of Content
- 1 what is amazon FBM (Fulfilled By Merchant) ?
- 2 How does Amazon FBM work?
- 3 Advantages of using FBM for your business
- 3.1 A greater understanding of the way things function
- 3.2 The freedom to run the business precisely as the seller wishes
- 3.3 Possibility of an offline and online store
- 3.4 Greater Margins & no unexpected costs.
- 3.5 The possibility of creating an independent brand is more feasible.
- 3.6 Avoid Amazon’s strict FBA requirements.
- 3.7 Unavoidable losses less caused by changes to Amazon policies
- 3.8 There is less paperwork.
- 4 How much does Amazon FBM cost?
- 5 Amazon Fulfilled Merchant requirements.
- 6 How do I add my item for sale on Amazon FBM?
- 7 When Should You Use Amazon FBM rather than FBA
what is amazon FBM (Fulfilled By Merchant) ?
Amazon Fulfilled By Merchant (FBM) is an approach to fulfillment where the Amazon seller is accountable for fulfilling the orders they make through Amazon. FBM is managed by an individual seller or through cooperating with a third-party Logistics service supplier.
In the absence of your items having Prime status, and you utilizing either Amazon for fulfillment or even using the Seller Fulfilled Prime Program, your seller is accountable for the storage of inventory and the placement of orders and fulfillment of orders returns, as well as customer service.
How does Amazon FBM work?
Fulfilled by merchant operates exactly like it says Fulfilled by Merchant is the process whereby the seller fulfills orders when their items are offered through Amazon or auto-fulfillment or a 3PL.
Amazon FBM is typically the only option for fulfillment for new sellers selling on Amazon since FBA requires approvals and proof that they have a high turnover in their inventory and can take time to establish. Smaller sellers often can fill orders independently, while larger sellers use a logistics system to process orders.
Here are some steps to take to get Amazon FBM in operation (and make sure you read these most common Amazon mistakes that you must avoid):
Advantages of using FBM for your business
A greater understanding of the way things function
Sellers are able to maintain a sense of being in control of the business. In addition, the ability to manage all numbers and inventory on their own will give them an advantage in managing the business over long-term success.
The freedom to run the business precisely as the seller wishes
With the potential to grow, Self-fulfillment of items provides better control over inventory levels. Growing your Amazon business can be easy and simple, without the need to think about additional shipping costs to fulfillment centers and warehouses and the increase in FBA charges.
Possibility of an offline and online store
The ability to manage both offline and online retail stores using one inventory is more than feasible. Because sellers keep their stock in the warehouses chosen from their own, they are in total control over their inventory and can use the same inventory for running an offline retail store as well. This is all without thinking about additional shipping or delivery charges.
Greater Margins & no unexpected costs.
Without FBA charges included, Sellers get a bigger percentage of profit. This is because they can save on fulfillment charges to find the most effective and affordable warehouses and cut down on the cost of shipping. This is especially applicable to larger items with lower margins for profit.
The possibility of creating an independent brand is more feasible.
An FBM seller must interact directly with customers. They can better understand their client’s needs and issues because they are directly in touch with their customers. In addition, through the interaction they have with their customers they can gain valuable insight into feedback, ideas, and feedback for their company.
Avoid Amazon’s strict FBA requirements.
Amazon is well-known for its ability to change its FBA specifications without providing sellers with enough time to make the changes (and they increase in the quarter). This can cause a problem for sellers who sell the requirements of Amazon. FBM makes it easier to comply with regulations and penalties for failing to meet their stringent standards for every Amazon Prime order.
Amazon frequently changes its policies and pricing for fulfillment. Also, it imposes long-term storage charges for items stored in Amazon’s repository. Amazon storage repository over a prolonged period of. An FBM seller is not required to go through these problems.
There is less paperwork.
An FBA seller faces two inevitable issues. The first is Amazon’s taxation requirements for fulfillment; the second is the sheer amount of paperwork. An FBM seller is not subject to both of these concerns.
Utilize the Amazon FBA Calculator to determine the difference between FBA and FBM. Learn about the FBA costs associated with your Amazon product by using Amazon FBA Calculator. Amazon FBA Calculator. The post How to locate the most popular Amazon products provides great insight into using the FBM calculator. Enhance your Amazon profit with more efficient and fascinating SellerApp products.
How much does Amazon FBM cost?
As a Pro FBM Amazon seller, the monthly subscription cost is $39.99
If you’re not a pro-seller and are a private seller, there’s no fee for a subscription; however, you’ll pay an $0.99 cost for each product you offer. Therefore, if your sales exceed 40 units per month, it’s time to change to one of the Pro packages to keep your costs down.
Amazon also accepts referral fees. But, again, this is because you are selling on their marketplace, meaning they think they have referred customers to your site.
The fee for referrals is an amount of the total price of sales. For most categories of products, the fee is 15%. However, it can vary between 6% to 45 %, which means you should check the details based on the item you’re selling. The complete list of costs for selling is available through Amazon. Amazon website.
Also, you’ll need to consider the cost of shipping. It’s your obligation to pack orders and send them to your customers on time. Therefore, it is important to consider not just the packing and shipping charges but also the time you invest in selecting, packing, and shipping.
Amazon Fulfilled Merchant requirements.
There are a few prerequisites to using Amazon FBM. To use this method, it is necessary to:
- Send products on your own time.
- Maintain inventory in your brand’s warehouse.
- Select your delivery carriers & fulfillment method.
- Provide top-notch customer service.
- Manage the return and process of refund internally.
- Control the levels of stocks.
How do I add my item for sale on Amazon FBM?
Offering an FBM product is generally similar to creating any other kind of product.
Follow the steps above; when you get to the section of the offer which reads “Fulfillment Channel Choose the radial that reads “I will ship the product me (Merchant Fulfillment).’
When the item is listed in Amazon’s catalog, discover the merchant Fulfilled items within Inventory under Manage Inventory. Check “Active” for Status and ‘Merchant’ to see the Fulfilled by.
When Should You Use Amazon FBM rather than FBA
Here are a few examples of which delivering your product rather than relying on Amazon to handle it is the best option.
You offer items that are hard to ship using FBA.
Certain products, like large items, things that need special handling, and products that have low sales, may be shipped more efficiently by yourself instead of Amazon FBA.
You have to ship your heavy or large items.
The shipping of your heavy/big items will save you money and ensure that the items are displayed to the customer in the way you want.
Amazon has the fulfillment of its delivery and routing specifications. However, if you’re not certain which type of fulfillment is less expensive, you could make comparisons by using the Amazon FBA calculator.
Different types available on Amazon’s FBA calculators appear to be accessible to all Amazon seller who sells across different countries. Each of the FBA tools will then be able to take into account the respective country’s currency and any fee differences between the countries.
You can ship it for a cheaper cost than Amazon.
In a similar vein, it is possible that you already be using the MFN (merchant fulfillment network) installed or contract with a third-party fulfillment company different from Amazon. Amazon platform to manage fulfillment on your behalf. Setting up your own infrastructure or network could be the best option in that scenario.
Dropshipping is an alternative.
To comply with the company’s business plan, Dropshippers must ship their products or goods through FBM because each item is shipped directly from the manufacturer or supplier manufacturer to the consumer.
You can also sell hand-crafted products.
Although handmade items can be stored in Amazon’s fulfillment centers and shipped out by using Amazon FBA, many handmade sellers prefer to fill their own orders to ensure the item arrives to the specifications that the seller intended.