How can I use the Repricer if I offer the same product with FBA and FBM?
Many sellers on Amazon do not exclusively use FBA or only FBM, but combine both fulfillment methods to maximize their profits from their business. However, the question quickly arises: How can I use my Repricer without cutting into my own profits?
We want to get to the bottom of this question today. To do this, we will first clarify what the terms FBA and FBM mean. (Of course, you can also jump directly to the more in-depth sections using the table of contents on the right.) Next, we will address the question of why a product is offered with both FBA and FBM and what sellers aim to achieve with this. Finally, we will discuss the implications for using the Repricer.
FBA, FBM, FB – what?!
Let’s start with the basics. Those who sell on Amazon need to get their goods to the customer somehow. Sellers can either do this themselves (FBM) or hand over the entire process to the online giant (FBA). Here, FB stands for Fulfillment By, the M for Merchant, and the A for Amazon. If anyone is lost at this point or simply needs a reminder about the basics of repricing, you can find everything on the topic: “What is Repricing and what mistakes should I be aware of?”
Although shipping is indeed the largest part of fulfillment, it is by no means the only one. It also includes inventory management, customer service, and returns management. While with FBA you only send your goods to Amazon’s logistics centers and the trading platform takes care of all further steps from there, with FBM you are responsible for the entire fulfillment process yourself.
Advantages and disadvantages of the two variants
Both fulfillment options have their justification. While you can rely on the expertise of the online giant with FBA, you have to handle everything yourself (and possibly learn) within the framework of FBM.
At Amazon, the customer is still the top priority – those who want to win the Buy Box must therefore provide the perfect customer journey. From shipping to customer service to returns management, there is a lot to consider! Amazon has been able to perfect all of this over the last few decades and has developed its “completely satisfied customer package” from this wealth of experience with the FBA program. If you offer your products via FBM, you should be able to meet the high demands.
Tip: In some sectors, Fulfillment by Amazon is more common than in others. Take a look at your product category and analyze your competition. This way, you can easily filter out the standard in terms of shipping and customer service that you need to meet.
But Amazon is not perfect and is not prepared for all eventualities. If you choose FBA, you not only pay fees, but you also give up some control. Control that may be lacking in crisis situations.
Why do sellers ship the same product via FBA and via FBM?
At the beginning of the Corona pandemic, Amazon decided to only ship essential items via FBA. Sellers who had relied solely on the program and whose products were not considered essential faced an enormous problem: their goods were no longer delivered until further notice, and customers turned to competing products that they could receive promptly.
So, anyone who wanted to keep their business afloat had to react immediately. If no warehouse had been needed before, as goods were delivered directly from the manufacturer to Amazon, there was suddenly great concern about how the goods should be stored. Additionally, merchants had to enter into contracts with shipping service providers overnight so that the packages could be delivered to the customers.
But it doesn’t have to be the next pandemic; even a strike in the Amazon logistics centers can lead to significant delivery delays with FBA and drive buyers into the arms of their competitors. At the same time, the algorithm prefers FBA products for the Buy Box, as the coveted spot in the shopping cart field is awarded to the offer that can provide the customer with the best possible service.
Additionally, unforeseen problems such as strikes can also occur in the merchant’s own warehouse. Using both FBA and FBM distributes the risk and provides you with an alternative option in case of emergencies.
How do I use the SELLERLOGIC Repricer when I ship a product via both FBA and FBM?
If you choose such a business model, you can still use the SELLERLOGIC Repricer. Both offers can be optimized equally for the Buy Box.
Let’s take the example of Kraken AG. They sell diving goggles with the ASIN B01XYZJL. For this, they have two offers, one with FBM and one with FBA. The FBM listing has the SKU 1234 and the FBA listing has the SKU 5678. Kraken AG can now link both SKUs with the same ASIN in their customer account. Both offers can be assigned the same strategy or different ones.
Best Practices
You can choose the Buy Box strategy for both products. When you offer your products via FBA and FBM, the Repricer will automatically prefer the FBA offer. The FBM offer will follow immediately, as long as you do not use more than these two offers in the same condition.
Additionally, it is advisable to set the same price limits – that is, maximum and minimum prices – in both cases.
The chances of winning are now dependent on whether the product of the corresponding ASIN can also be shipped via FBA, as FBA products are preferred for the Buy Box. However, this does not mean that the FBM listing has no chance. Sometimes, it just needs to be significantly cheaper.
However, in such a case, it is essential to discuss the procedure with the SELLERLOGIC customer service and analyze possible consequences based on a sample ASIN.
Conclusion: Repricing with FBA and FBM
To reduce risk, it is indeed a good option to list the same product once with FBA and once with FBM – provided that you have the corresponding fulfillment and storage capacities.
Of course, it is also possible to use the SELLERLOGIC Repricer efficiently in this case, as it adapts to the needs of Amazon sellers and allows for a lot of flexibility in different decisions.
However, in such cases, the procedure should be clarified with the Customer Success Team so that all eventualities can be taken into account in advance.
Image credits in the order of the images: © andrew_rybalko – stock.adobe.com
