What is Amazon FBM?

Updated on : October 15, 2022
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What is Amazon FBM?

FBM stands for Fulfilment by Merchant. The seller is in complete control of storing, packing and shipping their orders and dealing with all customer service queries. Instead of paying Amazon for storage and service fees, the seller uses their resources and delivers the order to the buyer. FBM can be managed directly by the seller or by partnering with a third-party logistics service provider.

You can create an FBM listing the same way you would create an Amazon product listing. You need to select “I will ship the item myself” (Merchant fulfilment) in the fulfilment channel selection.

Who fits into Amazon FBM?

Anyone can decide to use Amazon FBM, but the target demographic FBM will benefit most is sellers who qualify for the following.

  1. A seller whose exclusive products have low sales frequency
  2. A seller who deals with small volume products
  3. A seller who sells low-profit products
  4. A seller who is selling hard-to-ship products (oversized or fragile)
  5. A seller who uses a third-party fulfilment service other than Amazon and which is also cheaper than Amazon FBA.
  6. A seller who sells handmade products mostly prefers FBM to ensure the orders arrive as intended.

How much does Amazon FBM cost?

Amazon FBM fee is the cost that the seller will spend if they decide to ship the order by themselves. These fees will vary significantly from seller to seller based on their shipping and delivery options. There are some fixed charges that the seller will incur. They are as follows:

  1. Monthly subscription fee — $39.99 for Pro plan and no fees for individual selling plan
  2. Per item selling fee — No fees for Pro plan and $0.99 per item if individual selling plan
  3. Referral fee — It is a percentage of your total sales price. In most product categories, it is 15% but does vary from 6% to 45%

Advantages of Amazon FBM

  1. You can understand how your Amazon business works - Sometimes, it is better to have control of your business rather than handing it over to third-party service providers.
  2. Freedom to quickly expand your business - By handling all your orders by yourselves, you will have complete control of your stock levels at all times. This control enables you to decide when to increase or decrease the inventory without worrying about extra shipping fees and increased storage fees from Amazon FBA.
  3. Online and offline retail store opportunity - With Amazon FBM, you can maintain online and offline retail stores with a single inventory. It allows the use of the same inventory stocks to run the offline retail store. Since the inventory is stored in a warehouse the sellers choose, they have complete control of the inventory.
  4. No strict requirement like FBA - Though Amazon FBA removes many of the procedures involved in running the seller business, they have strict requirements for handling your orders. Sometimes it is harder for a seller to adhere to the FBA rules. You will have no such restrictions in FBM as you manage your orders.
  5. Direct interaction with your customers

As you are shipping your orders to the customers, you can mention your brand name and logo on the packaging. It helps to build your brand awareness to the customers.

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Disadvantages of FBM

  1. Order fulfilling is time-consuming - Fulfilling your orders will take time as you will pick, pack and ship the order to the customer.
  2. Higher shipping fees - As you need to handle your inventory, the storage and cost for managing resources for fulfilling the order will add to your expenses.
  3. Customer service - All customer-related queries, returns, and refunds are all down to you. You will have to manage all these things on your own.
  4. Not eligible for Amazon Prime - Amazon FBM sellers do not qualify for the Amazon Prime badge. It only applies to Amazon FBA sellers.

Summary

Though Amazon FBM seems like hard work, it has some fantastic benefits. The critical factor in increasing your sales is by overlooking your business. Amazon FBM does provide this option to you.

Your brand reputation and awareness are all your responsibility as Amazon FBM sellers. In this way, you can think of new innovative ideas to build your brand awareness. Also, this will push you to fulfil all your customer orders on time.

KwickMetrics supports reports and insights of FBA and FBM sellers. Whether you’re selling on FBA or FBM, reports and insights are paramount. Check these analytics on time to understand the profitability of your business. Check out KwickMetrics for more details.

KwickMetrics is a cutting edge business intelligence and analytics tool that will provide custom reports and insights that a seller needs to understand their business in-depth. Please visit the below link to know more about KwickMetrics.

Happy Selling!

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