Are you an Amazon seller looking to maximize your business potential? If so, Fulfillment by Merchant (FBM) may be the solution you’ve been searching for.
Unlike Fulfillment by Amazon (FBA), which requires sellers to store their inventory in Amazon’s warehouses, FBM allows sellers to store and ship their products. This can provide more control over inventory and shipping costs and a cost-effective solution for some businesses.
In this blog, we’ll dive deep into the world of FBM and explore the secrets to success with this fulfillment method. We’ll cover everything from the basics of FBM to advanced tips and tricks for optimizing your fulfillment process. Let’s unleash the full potential of your business with the secrets of Fulfillment by Merchant.
Getting Started With Amazon FBM
With FBM, sellers can list their products on Amazon and manage their business’s shipping and customer service aspects directly. FBM offers more control over inventory and shipping costs, making it an attractive option for many Amazon sellers.
Entering the world of Amazon FBM can be both exciting and intimidating. Below points will guide you through the initial steps to ensure a successful start.
Creating an Amazon Seller Account
Sign-up involves providing your business information, tax identification number, and bank account details.
Exploring Fulfillment Options With Amazon
Amazon offers a variety of fulfillment options, including
An FBM seller handles their products’ storage, packing, and shipping. This means that sellers retain control over their inventory and have the flexibility to use their own shipping methods and carrier partnerships.
Amazon FBA takes care of logistics, including storage and shipping. This option can free up time and resources for sellers and may also increase the visibility of the products on Amazon.
However, FBA does come with an added shipping cost and fee, and you have less control over your inventory and shipping methods.
- Multi-Channel Fulfillment (MCF)
This fulfillment option allows sellers to use Amazon’s fulfillment network to ship orders on non-Amazon platforms. This can be a convenient option for sellers who sell on multiple channels and want to streamline their fulfillment process.
Selecting Your Fulfillment Method
Next, select Fulfillment by Merchant (FBM).
FBA allows Amazon to handle storage, packing, and shipping, while FBM puts the responsibility on you as the seller. Weigh the pros and cons, such as fees and control, before choosing the proper fulfillment method for your business.
Consider cost, scalability, and customer experience when choosing the right fulfillment option for your business.
Catering to Sellers With The Individual Plan
The Individual plan may suit you if you’re starting or have a small product portfolio. This plan charges a fee per item sold and the applicable fee, with no monthly subscription fee. The Individual plan offers a lower barrier to entry for those testing the waters with FBM.
Setting up Your Amazon FBM Business
Listing Products for Sale and Creating Captivating Product Pages
Begin by listing your products for sale on Amazon. Focus on high-quality product images and detailed descriptions to showcase your items. Utilize bullet points and bold text to highlight key features and benefits.
When creating captivating product pages, invest in professional photography and write engaging copy. Optimize your product titles, descriptions, and keywords for search, ensuring your items are easy to find for potential customers.
Managing Your Storage Space: Warehouse or Fulfillment Center?
Decide whether you will use a warehouse or a fulfillment center to store and manage your inventory. Each option has pros and cons, so consider cost, space availability, and location before deciding.
If you choose a warehouse, ensure it has sufficient space to organize and store your products. On the contrary, fulfillment centers take care of storage and order management for you but may incur higher fees.
Shipping Made Easy: Setting up Shipping Templates and Logistics
Set up shipping templates to streamline your shipping process. Customize your templates to include shipping costs, regions, and handling times based on your preferences and business requirements.
Establish your shipping logistics, including carrier selection and packaging material sourcing. Keep track of your shipping expenses to provide competitive rates and maintain profitability.
Coordinating the Order Process: Picking, Packing, and Shipping
Coordinate the order process by developing an efficient picking, packing, and shipping system. This involves accurate order processing, choosing the appropriate packaging, and ensuring timely shipments.
Consider implementing a barcode scanning system to facilitate accurate picking and packing. Continually assess your process to identify improvement opportunities, enabling you to provide the best customer experience possible.
Amazon FBM vs. FBA: Making the Right Choice for Your Business
Pros and Cons of Amazon FBA
With FBA, Amazon takes care of storage, packaging, and shipping for you. This saves you time and allows you to focus on scaling your business. However, FBA comes with additional fees, which can cut your profits.
Pros and Cons of Amazon FBM
FBM offers more control over your shipping process and inventory, and this can save money on storage fees and allows you to choose your shipping carrier. However, managing orders, packaging, and shipping can be labor-intensive.
Additionally, FBM products are not automatically eligible for Prime. You must meet strict performance standards and join the Seller Fulfilled Prime (SFP) program to qualify.
Factors to Consider When Choosing Between FBA and FBM
First, evaluate your product type and size. Large, bulky items may be more cost-effective to ship via FBM, and smaller & fast-moving products might benefit from FBA’s Prime eligibility.
Next, consider your fulfillment capabilities, such as storage space and staffing. If you’re lacking in these areas, FBA may be more suitable. Otherwise, FBM may provide more cost savings and control.
When Should You Choose Amazon FBM over FBA?
FBM may be better if you have limited inventory space or your product requires special shipping or handling options. Additionally, if your items have low-profit margins, FBM can save you money on FBA fees.
You may also choose FBM if you want more control over returns and customer service. Ultimately, the decision depends on your business needs, resources, and fulfillment capabilities.
Identifying the Ideal Business for Amazon FBM
Amazon FBM can be an excellent fulfillment option for many businesses. However, it’s essential to identify if FBM is the ideal fit for your specific business needs. Here are some cosiderations when determining if FBM is suitable for you.
Products That Are Not Easy to Ship via FBA
As a savvy ecommerce seller, you must understand which products are better suited for FBM and which are not recommended to ship via FBA.
- Products requiring special handling
- Bulky, heavy, and expensive
- Fragile or customizable items
- Slow moving items
- oversized products
- Products with slow turnover
The Impact of Shipping on Sales
Efficient shipping plays a crucial role in customer satisfaction. With FBM, you have more control over shipping costs, tracking, and delivery times. This helps maintain your brand’s reputation and enhance your customer’s shopping experience.
What’s more? You can accrue long-term savings by choosing lower-cost shipping options or optimizing your order fulfillment process. Remember, a happy customer is often a repeat customer.
Pro Tips for Merchant Fulfilled Network (MFN) Shipping and Delivery
MFN is another terminology for FBM. To excel in FBM, you should follow these best practices to ensure seamless Merchant Fulfilled Network shipping and delivery:
- Packaging: Use high-quality and appropriately sized packaging to protect products during transit.
- Tracking: Provide accurate tracking information to customers and stay informed about the package’s progress.
- Customer service: Respond promptly to customer inquiries and address issues to maintain trust and positive feedback.
Enhancing Your FBM Program
Enhancing your FBM program can build customer loyalty, increase positive reviews, and ultimately grow your business. Providing an exceptional customer experience is crucial for the success of any Amazon FBM business.
This can include strategies like optimizing your product listings, providing prompt and clear communication with customers, and shipping orders quickly and accurately.
Enhancing the FBM program can differentiate your business from competitors and establish an excellent reputation.
Providing Excellent Customer Service: Handling Returns Efficiently
When running an FBM business, your top priority should be providing stellar customer service. Respond to customer inquiries quickly and be ready to address any issues.
Keep communication open and be empathetic to ensure a smooth return process, as this will leave a lasting impression on your customers.
Scaling Your Business: Considering Third-Party Fulfillment Options
As your Amazon business grows, managing fulfillment in-house may become challenging. Consider partnering with a reliable third-party fulfillment provider to handle your storage, packing, and shipping needs.
This will help streamline your operations, reduce errors, and enable you to focus on other aspects of your business.
Analyzing Costs: Are FBM Costs Higher for Beginners than FBA Costs?
Analyzing the costs involved in FBM and FBA models is crucial. For beginners, various logistics networks may offer lower costs due to the absence of specific FBA fees, but remember that other expenses, such as shipping and storage, could add up.
Differences between FBM and FBA costs are highly subjective based on product sizes, dimensions, picking, packing, and shipping.
Weigh the pros and cons of each fulfillment program carefully before choosing the best fit for your business.
Breakdown of Amazon FBM and FBA Fees
- Amazon FBM fees typically include referral fees, subscription, and shipping expenses paid directly to carriers. Calculating and comparing these fees to your estimated profit margin is crucial for determining profitability.
- Amazon FBA fees include referral, fulfillment, storage, and subscription fees. While these fees could be higher than FBM fees, the convenience and benefits offered by FBA may outweigh the costs for some sellers.
Consider these factors and fees when choosing the best fulfillment method for your business, considering each has advantages and disadvantages.
Streamlining Your FBM Process
Managing an Amazon FBM business can be complex and time-consuming, but streamlining your process can save you time and improve your bottom line.
Here are some strategies to help you optimize your FBM process and simplify your operations.
Staying Informed: Know When a Product Sells
Keeping track of your sales is crucial for your FBM business. Set up Amazon Seller Central notifications for instant updates when an order is placed. Quickly processing orders ensures a smooth customer experience and helps maintain positive seller feedback.
Leveraging the Third Party Logistics Warehouses
Outsourcing logistics can free up your time to scale your business and optimize your product listings.
Simplifying Shipping with Amazon ‘Buy Shipping’ Services
Save time and streamline your shipping process using the Amazon “Buy Shipping” services. This service lets you purchase and print shipping labels directly from Seller Central. Plus, you can take advantage of Amazon’s negotiated carrier rates, potentially reducing your shipping costs.
Utilizing the Manage Orders Feature
Managing orders is crucial to running a successful Amazon FBM business, and the ‘Manage Orders‘ feature can help you streamline this process. This powerful feature lets you view, process, and manage orders from a single dashboard, giving you better visibility and control over your operations.
FBM Shipping Essentials
Shipping is a critical aspect of any Amazon FBM business, and mastering the essentials can help you provide a better customer experience and reduce costs.
Here are some fundamental FBM shipping essentials to remember as you grow your business.
Checklist To Ship a Product
#1: First, ensure you have accurately listed your product’s dimensions and weight in your Amazon FBM listing. This helps calculate shipping costs and prevents surprises.
#2: Stay on top of an order’s timeline. After receiving an order, promptly package the product and print a shipping label, which Amazon generates in your Seller Central account.
#3: To maintain positive feedback and boost customer satisfaction, provide tracking information to your buyers and ensure that shipments meet the estimated delivery date set in your listing.
#4: Adhere to service-level agreements and Standard Delivery Requirements (SLAs).
Shipping Supplies FBM Sellers Need
Invest in shipping supplies to secure and protect your products during transit. Essential supplies include:
- Boxes: Use sturdy boxes that accommodate your item size and weight. Corrugated boxes are a popular choice for FBM sellers.
- Padding: Include bubble wrap, packing peanuts, or air pillows to prevent damage during shipping.
- Tape: Use durable packing tape to secure your packages.
- Labels: Use quality shipping labels to display shipping information and prevent mishaps.
Remember to keep a well-organized inventory of these supplies, as running low can disrupt your shipping process and cause unsatisfactory risk deliveries.
As an e-commerce seller, mastering Amazon FBM can significantly impact your business’s success. Optimizing your storage, shipping, and customer service processes sets you up for an excellent seller reputation and increased sales.
Consider utilizing the following strategies to unlock the full potential of Amazon FBM:
- Invest in efficient inventory management software to streamline order fulfillment and reduce errors.
- Monitor performance metrics diligently and proactively address any customer issues or concerns.
- Optimize your product listings with clear descriptions, high-quality images, and competitive pricing.
- Offer fast and reliable shipping options, and be transparent with your customers about delivery timelines.
- Develop a solid return policy to manage customer expectations while minimizing the impact on your bottom line.
A well-executed FBM strategy can increase your business’s visibility on the Amazon marketplace and drive more sales. Keep an open mind to continuous improvement, embracing new technologies and applying the lessons you learn.
Frequently Asked Questions
Q. How do I list a product on Amazon FBM?
A: First, create a seller account to list a product on Amazon FBM. Click “Add a Product” in your account and follow the prompts. Ensure your product details are accurate and up-to-date, keeping in mind that quality listings improve search rankings.
Q. What are the benefits of using Amazon’s ‘Buy Shipping’ Feature?
A: Amazon’s ‘Buy Shipping’ feature provides multiple benefits, including competitive shipping rates, eligible orders protected against A-to-Z claims, and streamlined shipping label creation. Utilizing this service can save you time and money on your FBM shipping process.
Q. How can I improve my e-commerce logistics with the Amazon Partner Network?
A: Partnering with the Amazon Partner Network allows you to access various resources and tools to improve your e-commerce logistics. These include advanced fulfillment systems, inventory management, and customer support expertise, and all are meant to help streamline your overall operation.
Q. Which type of business will benefit most from opting for Amazon FBM?
A: Businesses with unique or specialized products, limited inventory, or a well-established fulfillment system can benefit most from Amazon FBM. This service allows these businesses to control their inventory and shipping while leveraging the Amazon marketplace’s customer base.
Q. What factors should I consider when setting up my shipping templates?
A: When setting up shipping templates, consider shipping locations, shipping methods, handling time, and shipping rates to customize shipping templates. Ensuring your shipping template covers essential aspects of your delivery process can help minimize shipping errors and significantly impact customer satisfaction.