We are sure you hear about Amazon everywhere, and this is because it is one of the biggest e-commerce companies in the world. This is the place where you can find every kind of product; you can easily list the products and sell them at affordable prices. The best thing about Amazon is that it targets a large audience, which makes this platform amazing for businesses to boost their sale.
There are a lot of different kinds of models that sellers can find when it comes to selling on Amazon, and one of them is Amazon FBM. If you are interested in selling your products on Amazon and want to learn more about their inventory, ordering, and shipping process, then this article is just for you. Here, we have mentioned every detail about Amazon FBM, which will surely help you with the entire process.
Part 1. What is Amazon Fulfilled by Merchant (FBM)?
The first question you might have is, what is this Amazon FBM or Fulfilled by Merchant? This is the method through which the seller on Amazon is responsible for fulfilling their order. The best part of this FBM is that it can be managed by the seller directly, and if the seller does not want to do it directly, they can partner with a third-party logistics service provider.
This means that merchants won’t have their products on Prime status and won’t be using the Amazon fulfillment center directly. The Amazon fulfillment center won’t be dealing with the orders; instead, the merchant will be in control of the orders and even responsible for inventory storage and customer service. Hence, Amazon FBM is more merchant-controlled, and everything will be done under the merchant’s supervision.
Part 2. Pros and Cons of Amazon Fulfilled by Merchant
Now that you know what Amazon Fulfilled by Merchant, we have mentioned below some of the main pros and cons related to it.
Pros of Amazon FBM
Fewer Fees
If you are using Amazon FBM, then this means that you have to pay fewer fees, and there won’t be a lot of charges. Amazon FBA fees can be quite extensive, and it can be a lot for the merchants. However, if they are doing the FBM, then they have to pay very small subscription fees, and very small fees go for the order places, and even the referral fee will be less for each order. This will allow Amazon sellers to still get the advantage of the platform and attract a larger audience to the brand without paying a heavy amount of money.
Avoiding Amazon FBA Requirements
Another major benefit of using Amazon FBM instead of Amazon FBA is that you won’t have to fulfill the FBA requirements. One of the biggest drawbacks of Amazon FBA is that they are known to change the rules and requirements quite frequently without giving sellers any time to adapt. These requirements can be very hard for merchants to fulfill, causing them a lot of issues and even stopping them from selling their products.
However, with Amazon FBM, the merchant needs to fulfill fewer rules and regulations, and there are fewer penalties for noncompliance. This is why Amazon FBM is way better when it comes to compliance.
Better Control Over the Business
With Amazon Fulfilled by Merchant, you get better control over your business. When the customers receive the parcels, they will have your brand’s logo, which means that any complaints and queries will be discussed with you. You will have control over the orders; the merchant will control the packaging, shipping, and every other operation. Therefore, if you are someone who likes handling everything yourself, then this is the best option for you.
Give Better Support to the Customers
It can be very difficult to reach Amazon for customer support. However, if you are using Amazon FBM, then your customers can contact you directly, and they will have a better experience with customer service. This will also give the customers a good impression of your company, showing that you are dedicated to them and can help them regarding any issue.
Cons of Amazon FBM
Below we have mentioned a few cons that you might face with Amazon FBM.
- Here you will have to do everything on your own.
- You need to pay fees and referral fees.
- You need to even tackle the clients and talk to them about their queries.
Part 3. How Does Amazon FBM Work?
Now, you might be wondering how Amazon Fulfilled by Merchant works. Below, we have mentioned some of the steps involved in this Amazon FBM process.
List Products on Amazon
The first thing that you have to do is list the products on Amazon. After making an account on Amazon Seller Central, make sure you include the information about the products. Also, add some pictures and videos of the products so that the customers can know more about them. Follow the right Amazon marketing strategy so that your products can become more popular.
Store Products in your Own Fulfillment Centers
When it comes to storing the products, you need to have your fulfillment centers or partner with third-party fulfillment senders. You can synchronize the fulfillment centers so that the shipping costs can be low and according to the shipping zone as well.
Ship Orders on Time
Once you receive your order, it would be best to start packing and shipping it. When you ship the order, Amazon will show the customers the estimated time they will receive it. The best thing about this is that you can easily modify the shipping and handling time according to the customers’ expectations.
Part 4. Amazon FBM Fees
There are also fees associated with Amazon FBM. The seller must pay three different kinds of fees. Below, we have mentioned everything you need to know.
Referral Fees
Since you are using the Amazon platform to sell your products, it is expected that they will also keep some kind of commission whenever a product is sold. The money made from each sale is called referral fees, and they can range from 6% to 45%. Every product has its percentage of referral fees that the seller has to give to the Amazon company for using the platform.
Monthly Subscription Fees
There is also a monthly subscription fee associated with this. If you are a Pro FBM user, the subscription fee will be about $39.99 per month. The best thing about a subscription is that you can waive the additional costs when the product is sold on Amazon from your site.
Pre-item Selling Fees
The pre-item selling fees are about $0.99 for every item sold on Amazon. However, you can waive this once you sign up for the Pro FBM plan.
Part 5. Amazon FBM vs. FBA — Which One Suits Me?
Below are some of the factors that you should consider when deciding between Amazon FBA and FBM.
Fulfillment Responsibility
If you are someone who likes to have proper control over your business and wants to cover all the aspects on your own, the FBM is for you. Here, you will have control over everything from managing the fulfillment center to checking the inventory, taking the orders, managing the shipping, and other aspects of the order. However, with the FBA, there is less control over your business; Amazon itself does the fulfillment process, shipping times, and even the packaging.
Costs
The costs of Amazon FBM are lower than those of FBA. FBA has many different kinds of fees, such as storage, fulfillment, peak season charges, and many others. With FBM, there are very few upfront costs; however, you need to bear the shipping and customer service charges yourself.
Fulfill Your Amazon FBM Orders with NextSmartShip
Now that you know what Amazon FBM is and how it works, are you trying to find a fulfillment center that can help you with your inventory? You don’t have to look any further. NextSmartShip is one of the best platforms for helping you with your inventory. They also help with the order process, such as taking the orders, packaging them, and even shipping them.
With the help of NextSmartShip, you can easily manage all the intricacies of the order while giving more time to the business’s marketing. Another great thing is that if you partner with them, the shipping will be very smooth and quick, which will give a good impression on the clients. Hence, this is an amazing partner when it comes to fulfillment centers.
Conclusion
Amazon is an amazing platform for the sellers. Here, they can attract a massive audience, which will boost their sales. However, when it comes to Amazon, there are two types of inventory systems that you can choose from: Amazon FBA and Amazon FBM. Amazon FBM is considered a better option for people who are looking for a more cost-effective option, and you can also have better control over your business. Hence, we hope this article was beneficial for you and that you now know everything about Amazon FBM. Also, make sure to check out NextSmartShip.
