What is FBM might be one of your queries about amazon fulfillment programs. Amazon, in a competitive industry, stands out as one of the most complex and successful marketplaces in the world. Amazon is a popular eCommerce giant for its business strategies and several money-making options for sellers.
The sellers already in the amazon business have to compete against millions of other retailers and accomplish their fulfillment processes. The Amazon fulfillment process offers two different methods for sellers Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).
Fulfillment by Amazon is the most adopted method by the sellers; however, FBM is quite an alternative, which may also be right for the retailers. Understanding how to set up and grow your business on Amazon rightly and make as smooth and efficient as possible is vital in ensuring your success on Amazon.
Here, we will discuss the method of what is FBM? How does it work? And how it can help you to grow your business. So, let’s dive into the discussion without any further delay.
What is FBM Amazon, and How it Works?
The merchant’s fulfillment is when sellers list their products in the Amazon fulfillment program and choose to store, pack, and ship the orders to each buyer by themselves. The sellers under Fulfillment by Merchant deal with all client service queries by themselves or through another third party.
Under the FBM program by Amazon seller is responsible for his entire handling and shipping process. Seller doesn’t rely on Amazon and utilizes his resources to deliver the product to the customer. Also, sellers don’t have to pay any service fee and shipping inventory to amazon to retail their products.
Amazon FBM option is a suitable choice for newbies or startup that need more time to be eligible for FBA.
Mostly, Amazon sellers complement FBA over FBM because of easy shipping, handling, and other gains attached to amazon’s fulfillment, such as getting more time for researching, sourcing, and marketing their products. At the same time, FBM is a profitable option for products with lower margins.
The sellers create the FBM listing the same way the regular amazon product listing. They have to choose ‘I will ship the item myself’ in the fulfillment channel section referred to as Amazon MFN.
When Should a Seller Choose Fulfillment by Merchant?
Amazon FBM program is another option for sellers to trade their products through this market place. But selling wholesale on amazon items using FBM will only be advantageous when the items being marketed are exclusive to the seller’s shop. The seller will gain more trust and attention for its store and product.
Also, FBM is an excellent choice for newbies, small volume businesses, and startups. However, not every amazon seller can successfully run the FBM business as it is entirely tricky and strategic to gain success.
The sellers should consider the Fulfillment by Merchant program if they sell exclusive products with a low sales rate, hard to dispatch products, small size products, low-profit items, etc.
Also, Seller can consider Amazon FBM in the case if:
- A third-party fulfillment service (other than Amazon) is already in place more affordable than Amazon FBA.
- Handmade products in your catalog as many handmade sellers like to use FBM to make the exact product delivery and ensure customer satisfaction.
Benefits of Fulfillment by Merchant
Under, Amazon FBM program, you maybe have to handle everything by yourself that seems to be complicated; however, there are many advantages of using Amazon fulfillment by the merchant. Let’s check out a few!
Experiencing and Learning your Business Growth
The foremost benefit of FBM will be gaining extreme experience in setting up and running the business. It would help you learn more life-saving experiences, strategies, and practices than putting your business in someone else’s hands. So, if you are a newbie and struggling to flourish your startup, opt for Fulfillment by Merchant for you to have a better sense of decision, control, and manage.
Expand Your Business as Much as You Can
As working in Amazon FBM, the seller has full liberty of fulfilling all orders and expand his business. Seller will have complete control over the stock level and increase it without any hassle of extra shipping fees and storage costs.
Free From Strict Requirements
In Amazon FBA, almost every task of your business is fulfilled by Amazon so, the seller has to follow the strict laws and regulations. However, in Amazon, FBM sellers are free from any such restrictions as they are responsible for everything. They have to maintain their shipping streak properly to keep their business reputation intact.
Generate Mighty Profits
In FBM, the sellers save on fulfillment and storage fees that increase their bottom line. If they have calculated other costs accurately and have gained the best price for their stock and shipping requirements, they must be grabbing the right profit margin.
Direct Retailer-Customer Relationship helps in Brand-building.
The sellers under Amazon FBM provide direct customer service to their clients that help them build their brand and know your customers’ further requirements. This direct interaction helps you get a few more valuable ideas to add to your business and set up your brand integrity.
No Long Term Storage Fees
The sellers are free from paying advance storage fees for the long term. In case if they have a slow sale rate and not making enough profit, then at least they are not bound to pay storage fees to Amazon. This freedom will somehow be a relief in tough business days.
Continuous Sales and Shipping
The FBM sellers are responsible for shipping their products that work in their favor. Most of the FBA sellers were not in advantage when Amazon stopped sending a few of the un-essential products during the recent COVID-19 pandemic time. However, the FBM sellers didn’t face any such situation and remained unaffected.
A Few Drawbacks
Undoubtedly, Amazon FBM seems to be looking very advantageous, especially for newbies and people with startups, but there are still some red dots with this fulfillment program.
Managing Everything Alone Maybe Tough
Taking everything under your responsibility and control might be hectic and time-consuming. This duty requires more efficiency, time, and dedication.
Sellers Must be Bearing Higher Shipping Fee
It seems that handling everything by yourself may be saving you from many expenses, but that is not the case. The seller under the FBM program might be bearing poorly-negotiated higher shipping costs as compared to Amazon FBA.
Turns to be more Demanding Day by Day
We would also call it an advantage. Spending more time every passing day and staying dedicated to your business will help you understand the business requirements and efficiently embark on more success. So, the seller must be prepared to consume more time from day by day that is sometimes causes bogging you down.
Not Eligible For Amazon Prime Badge
In Fulfillment by Amazon, the sellers with a good business streak and reputation get the Amazon Seller Prime not offered in FBM. This ineligibility could be a significant loss for you unless you qualify for the Seller Fulfilled Prime.
You Must Be a Good CC Representative
Unlike FBA, the seller has to deal with every customer on his own in the Amazon FBM program. The retailers deal with queries, returns, and refunds of their clients that require efficiency and effort.
Final Words: What is FBM Amazon
Ultimately, all your business growth is your responsibility in the Amazon FBM program. It might be looking appealing to having full control over everything; however, it can be disadvantageous at the same time if you are not capable enough. The FBM business requires more dedication and hard work and might not be paying you up to your expectations initially. Remember, consistency and accuracy is the key to success.
You must deliver the order in time, ensuring customer satisfaction in the end. Amazon offers a ‘Buy Shipping’ feature for its sellers that helps track and ensure that your fulfillment process is going well.
You have the optimal chance to build your brand reputation and pave your path to success if you are doing it right.