Are you one of those Amazon sellers? Then you are probably familiar with Amazon FBA. Many Amazon sellers use Amazon FBA, also known as Fulfillment by Amazon. An Amazon seller prefers it because it’s hassle-free and most convenient, offering them more time to handle their business.
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Costs of shipping from China to Amazon FBA
Other Amazon sellers prefer to use Fulfillment by Merchant (FBM). This guide will focus on why you must consider using the Merchant Fulfilled Network. If you’re ready, let’s dive in!
What is FBM: Amazon Fulfillment by Merchant?
Fulfillment by Merchant (FBM) is a fulfillment method in which a seller is responsible for fulfilling the products bought on Amazon. Amazon FBM is facilitated by a seller, third-party fulfillment center, or Amazon’s fulfillment centers.
Seller Fulfilled Prime enables you to benefit from the sought-after Amazon Prime badge as long as you follow the requirements for qualifying as a Seller Fulfilled Prime seller. That option lets you deliver straight to domestic Prime Amazon customers from your warehouse.
By showing the Prime badge, you are pledging to fulfill orders with 2-day delivery at no extra shipping fees for customers. The best part here is Amazon offers you access to suitable shipping methods and transportation solutions to help you meet the higher bar for the Prime customer experience.
How Does Amazon FBM work?
Fulfilled by Merchant works as it seems. The merchant fulfills the orders when their items are sold on Amazon through a 3PL or self-fulfillment.
Amazon FBM is the only fulfillment method accessible to new Amazon sellers selling on the platform. Amazon FBA needs a few agreements, and demonstrated inventory turnover, and it takes a little time to set up.
Small sellers can fulfill orders themselves, while bigger sellers are more likely to use a logistics network to fulfill the orders.
What Does FBM Shipping mean?
Amazon Fulfilled by Merchant is one of the fulfillment methods where an Amazon seller is accountable for fulfilling their products bought on Amazon. FBM could be handled through a seller directly or by partnering with a third-party logistics provider.
The merchant is responsible for storing inventory, order placement, returns, order fulfillment, and excellent customer service.
Advantages of Amazon Fulfillment by Merchant
To better understand Amazon FBM, let’s establish its main benefits:
· More profit
An Amazon business seller doesn’t need to pay to prepare their packages. You can consider other choices to lower that cost.
· Establish your brand
You can engage directly with an Amazon customer and improve your customer satisfaction. You also meet customer demand.
· More control over your business
Fulfilled by Merchant sellers are responsible for preparing and distributing the product. With that model, you can control and manage your numbers.
· Sell offline and online
Having control over where to find your products means you can use them for offline sales. You can offer free shipping and delivery costs.
Disadvantages of FBM
On the other side of the story, you can’t consider its drawbacks, but as an FMB seller, you must ensure:
· Returns management
As an FBM seller, you must take care of the return, collection, and product shipment.
· Handle Amazon warehouse space
To ensure faster delivery, you must have a good Amazon warehouse to store your products.
· Reply to all customer service inquiries
This is crucial to establish good customer satisfaction.
When to Choose FBM for Product Fulfillment?
If your small Amazon business sells handmade products, it’s suitable to use Fulfillment by Merchant (FBM), as you won’t need an Amazon storage space to keep your items.
Amazon FBM is a good option for you if the following applies:
· The shipping process of your product is low than Amazon FBA would be able to provide.
· Your item has low-profit margins.
· Your item is an exclusive product with low demand and a low turnaround rate
FBM Vs. FBA: Which to Choose?
Considering your particular business and the products you offer, you may be better off with Amazon FBA, Amazon FBM, or perhaps a hybrid of the two. Every fulfillment method is assessed below:
Fulfilled by Merchant (FBM) is a good option for your business if:
· You want higher margins and shipping inventory turnover is low
· You do not want to be at the mercy of Amazon shipping services fees
· You sell products that are not in the approved categories of Amazon FBA
· You have current customer service practices and wish to control your customer experience.
· Your products sell slowly, and inventory is low
Meanwhile, Amazon FBA is good for your business is:
· You’re okay relinquishing control of your Amazon customer’s experience
· You don’t provide a customer service team
· Your products are big margin products, which can offset extra fees
· Your products sell fast and have a higher volume of inventory turnover
· You sell lightweight and small products
Amazon FBM’S Fees
For Amazon FBM sellers, there are numerous ways to fulfill your product, such as outsourcing to a 3PL, dropshipping, leasing and operating your warehouse, or even utilizing a spare room in your apartment for storage.
Consider your options and compare them against the fees and costs charged to FBA sellers.
Breakdown of Amazon FBM Fees
Amazon Fulfillment by Merchant works on a fee-based model, and there are three major fees:
· Subscription Fees
The subscription per month is $39.99. But if you’re an individual Amazon seller, you won’t need to pay that, but with each unit you sell. You must pay the platform a $0.99 fee. Thus, if you’re selling over forty items monthly, it’s best to pay for the Pro Package.
Amazon will take referral fees from you. If you are selling products on the Amazon website, they are likely the ones who are referring customers to you.
· Referral Fees
Since your items are listed on the website and not on your own, every sale made is considered a referral. The overall referral fees will be based on the product type you sell and could range from six percent to forty-five percent.
You can check out Amazon’s referral fee table to check the referral fees for every product type.
· Per-Item Selling Fee
The per-item selling fee is $0.99 for every item sold. If you decide to sign up for the professional selling plan (Pro FBM Plan), that fee could be waived.
Additional Fees for FBA Sellers Include
If you wish to collaborate with a 3PL to arrange Amazon FBM, there are other costs, such as storage fees and fulfillment costs. But if you choose to do it on your own, you may consider saving money, but there are opportunity costs with the amount of time you spend stuffing boxes and running to your local UPS store.
10 Amazon FBM Shipping Requirements You Should Always Follow
As an FBM seller, you need to follow these shipping requirements:
1. Always set your shipping template in your Amazon seller central account.
2. Create a default handling time.
3. Always set your order handling service.
4. Get your packaging right.
5. Do not include any marketing materials.
6. Consider the Amazon Buy Shipping services.
7. Follow all the prep guidance guidelines.
8. Track your return metrics.
9. The ship was always on time, every time.
10. Determine whether international shipping is suitable for you.
How Do I Create an FBM Shipment?
Amazon FBM is rather a simple process. You’ll need a seller account and a product, to begin with. The product could be anything that fits Amazon guidelines.
1. Create a seller account on the Amazon marketplace.
2. Make a product listing. Add bullet points, images, and product description content to optimize your Amazon listing, fill the inventory, and make your listing live.
3. Your customers will see the listing and make an order.
4. After you receive the order, pack and wrap the unit box. Call your premium shipping company, and they will pick up and parcel it to your customer’s destination.
How to Ship Products?
Once a customer completes a single transaction, the order processing will start. If you wish to handle the fulfillment in-house, ensure you can pick, pack, and ship the orders to your customers.
You also wish to ensure that the carriers you will be employing are part of Amazon’s valid tracking art network of carriers.
A crucial part of order processing is selecting the ideal packaging. That could be paper or bubble mailers, boxes, and packing material like air filters or bubble wrap.
You can also purchase Shipping Services. This service can benefit from the discounted rates, especially if you do not have shipping logistics. Through this, you can buy labels, arrange to ship, confirm orders, and track the shipments.
As long as you can verify the shipment of your products on time, you’ll get protection against A-to-Z Guarantee claims, Negative Customer Feedback, and a Valid Tracking Rate.
5 FBM Best Practices from Amazon
Are you feeling ready to switch to Amazon FBM? Here are some tips for you:
1. Provide valid tracking details
Amazon customers often depend on tracking numbers to learn where their orders are and when they can expect to get them. Ensure you satisfy them by providing the same level of information and service they expect from the platform.
2. Schedule your delivery time
As Amazon sellers, remember that Amazon offers an estimated delivery time to customers on the offer and checkout packages. That transparency sets the platform apart.
3. Always set the default return instructions
Update your Amazon Seller Central account with a valid return instruction for all Amazon FBM orders.
4. Comply with the platform’s dropshipping policy
Be the eCommerce seller of record of your products. Determine yourself as one of those FBM sellers of your products on every invoice, packing slip, and external packaging.
5. Confirm your Amazon Seller account is updated with a valid return address
When you approve a customer’s request to return a product, Amazon sends the customer a return label with your default return address. Ensure you provide a valid return address.
How Can You Reduce Your Shipping Costs?
Did you know there’s a practical way to lessen your shipping costs during your fulfillment process?DFH Global Logistics provides small parcel shipping solutions for FBM sellers who wish to cut costs.
Remember that minimizing your shipping cost can significantly affect your business’s profitability. Save on all shipping costs with major couriers and ship products cheaper than ever!
FAQs About FBM
Q: Is FBM Free?
FBM sellers will not be paying fulfillment fees or storage fees; they must pay shipping fees and storage costs. Dealing with the perfect carrier service is the only practical way to lessen it.
Q: Is FBM Or FBA Better?
Both fulfillment methods have their perks. You must do more research to determine which fulfillment works for you. You can also scroll back to the top and read the pros and cons of using FBM.
But we recommend using FBA for Amazon FBA sellers with a growing business, and the demand for your products is getting bigger. It saves you substantial time and lets you concentrate on re-stocking and exploring the internet for new trending products you could add to your listing.
Q: Who Pays for Shipping Amazon FBM?
Amazon FBM sellers are responsible for paying for all the shipping. Small business owners may find FBM a more reasonable option, particularly while getting your Amazon business up and running.
With FBM, sellers have control of the packaging and shipping options. Nonetheless, more time will be spent on customer service if this is the route picked.
Q: How Much is Shipping for Amazon FBM?
Take note that the costs of shipping orders for Amazon FBM will vary on the carrier you pick and your products’ dimensions and weight. It also varies on where your shipping orders will be going.
Conclusion
FBM sellers have complete control of storage fees, and there is no need to wait for stock arrival at Amazon’s warehouse. You need to list products, talk to your customers and begin selling.
However, this is by no means a simple decision to make. Always take your time. Go with Amazon FBA, Amazon FBM, and Seller Fulfilled Prime or a hybrid of the three. It is up to you to decide the best model for your business.
Indeed, Amazon FBM takes more work than Amazon FBA. However, its hands-on approach to selling might be what FBM sellers need to enhance customer delight.
