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 rather combine both fulfillment methods to maximize their profits. However, the question quickly arises: How can I use my repricer without cutting into my own margins?
We want to get to the bottom of this question today. First, we will clarify what the terms FBA and FBM mean. (You can also jump directly to the more in-depth sections using the table of contents on the right.) Next, we will address 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 do you mean?!
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 you’re lost at this point or just need 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 likely the largest part of fulfillment, it is by no means the only aspect. This also includes storage, customer service, and returns management. While with FBA you only send your goods to Amazon’s logistics centers and the marketplace takes care of all further steps from there, with FBM you are responsible for the entire fulfillment process yourself.
Advantages and Disadvantages of Both Options
Both fulfillment options have their justification. While with FBA you can rely on the expertise of the online giant, with FBM you have to handle everything yourself (and possibly learn along the way).
At Amazon, the customer remains 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 much to consider! Amazon has perfected all of this over the decades and has developed its “completely satisfied customer package” through 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 you need to meet in terms of shipping and customer service.
But Amazon is not perfect and is not equipped for all eventualities. If you choose FBA, you not only pay fees, but you also give up some control. Control that you may lack in crisis situations.
Why do sellers ship the same product via FBA and FBM?
At the beginning of the COVID-19 pandemic, Amazon decided to only ship essential items through FBA. Sellers who had relied solely on the program and whose products did not fall under essential goods faced a significant problem: their products were no longer being delivered for the time being, and customers turned to competing products that they could receive promptly.
Those who wanted to keep their business afloat had to react immediately. Previously, no storage was needed as products were delivered directly from the manufacturer to Amazon; suddenly, there was a significant concern about how to store the goods. Additionally, sellers had to quickly establish contracts with shipping service providers to ensure that packages could be delivered to customers.
However, it doesn’t have to be another pandemic; even a strike in Amazon’s logistics centers can lead to significant delivery delays with FBA and drive buyers into the arms of competitors. At the same time, the algorithm favors FBA products for the Buy Box, as the coveted spot in the shopping cart field is awarded to the offer that can provide the best possible service to the customer.
Additionally, unforeseen problems such as strikes can also occur in the seller’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 listings, 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. They can assign the same strategy to both listings or different strategies as needed.
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 listing. The FBM listing will follow immediately as long as you do not use more than these two listings 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 favored for the Buy Box. However, this does not mean that the FBM listing has no chance. Sometimes, it simply needs to be significantly cheaper.
However, in such a case, it is essential to discuss the approach with SELLERLOGIC customer service and analyze potential consequences using a sample ASIN.
Conclusion: Repricing for 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 you have the appropriate 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 approach should be clarified with the Customer Success Team to ensure that all eventualities can be considered in advance.
Image credits in the order of the images: © andrew_rybalko – stock.adobe.com
