What is Amazon FBM?

Fulfilled By Merchant, popularly known as FBM, is when sellers list their products on Amazon and choose to ship products to each buyer by themselves. In other words, sellers are responsible for fulfilling their orders and do not rely on Amazon for the same. While it is a rather advantageous method for products with lower margins, FBM Amazon is rather overlooked owing to easy shipping, handling, and other benefits that come with Amazon FBA.

How does Amazon FBM work?

After setting up the seller account on Amazon and creating the listings, sellers have two ways to deliver their products: they can either use Amazon’s fulfillment network to ship your orders on their behalf, that is, Amazon FBA or, they can do it by themselves and go with the FBM Amazon way.

The merchants are responsible for shipping the orders to the customer's delivery address, from their warehouse location/slash the place where they have stored the products. The MFN (Merchant Fulfilled Network) seller is also responsible for handling returns and providing customer service.

Amazon merchants who are going this way need to keep FBM shipping in mind. They need to find shipping/delivery partners who are reliable and most importantly, cost-effective. If FBM shipping charges are higher than the fees incurred with FBA, then it doesn’t make sense for merchants to fulfill the orders by themselves as it will only impact their margins negatively.

When to choose FBM for product fulfillment

FBM is better for exclusive products, small volume products or products with lower profit margins.

FBM is better for:

Exclusive products - products that have a lower frequency of sales

A smaller amount of products - cuts down the shipping charges considerably for a relatively low volume of product units.

Products with lower profit margins - helps save on the warehousing and storage fees on FBA

Situations where FBM works out to be cheaper than FBA. FBA fees depend primarily on the weight and dimensions of the product. If sellers can ship their orders for a more reasonable price in comparison to using FBA through their delivery partners/network, then it is feasible to opt for FBM.

Advantages of FBM

A better understanding of how things work

Sellers maintain a sense of control over their business. Managing all the numbers and inventory by themselves gives them an upper hand in running the business for a longer run.

Freedom to run the business exactly as seller chooses

With an opportunity to scale, self-fulfillment of products gives better control over the inventory levels. Expanding Amazon business can be simple and easy without having to worry about extra shipping to warehouses and fulfillment centers, and increased FBA fees.

Opportunity for an offline and online retail store

Maintaining online and offline retail stores with a single inventory are more than possible. Since sellers store their inventory in warehouses chosen by them, they have complete control of the inventory and can use the same inventory stocks to run an offline retail store too. All of this without having to worry about any extra shipping/delivery charges.

Greater Margins. No unexpected costs.

With no FBA fees in the picture, sellers get a better cut from the profit margins. They save on fulfillment fees, find the best and a cheaper choice for warehouse, and reduce the shipment charges. This is more true for larger products with low-profit margins.

Opportunity to build an independent brand is more feasible

An FBM seller has to interact with his customers directly. They get a better understanding of their customers’ requirements and complaints since they are directly involved with them. Through their interaction with clients, they gain valuable insights, feedback, and ideas for their business.

Less unavoidable losses due to changes in Amazon policies

Amazon often changes its fulfillment pricing and policies. It also imposes long term storage fees for products that are in the Amazon repository for a long time. An FBM seller does not have to deal with these hassles.

Less paperwork, particularly when dealing with non-sales-tax states

An FBA seller has two unavoidable headaches. One is Amazon’s taxations for fulfillment, and the other is loads of paperwork. An FBM seller is free from both of these issues.

Use the Amazon FBA Calculator to check compare between FBA or FBM. Understand the FBA costs for your Amazon product with the Amazon FBA Calculator. The article How to find the best selling Amazon products gives a good insight to the usage of FBM calculator. Increase your Amazon profits with more useful and interesting SellerApp products.

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