{"id":19653,"date":"2022-04-05T14:56:40","date_gmt":"2022-04-05T14:56:40","guid":{"rendered":"https:\/\/www.sellerlogic.com\/?p=19653"},"modified":"2025-01-31T10:36:13","modified_gmt":"2025-01-31T10:36:13","slug":"amazon-fbm","status":"publish","type":"post","link":"https:\/\/www.sellerlogic.com\/en\/blog\/amazon-fbm\/","title":{"rendered":"What is Amazon FBM and Is It Right for You?"},"content":{"rendered":"\n

Amazon Fulfillment by Merchant (FBM) is a great way to win customer loyalty because it allows you to have direct control over customer service and returns. By handling these aspects in-house, you can provide a more personalized and responsive experience, which can build stronger relationships with your customers. Additionally, for niche and handmade products, direct communication with the seller can address specific questions and concerns, further enhancing customer satisfaction and loyalty.<\/p>\n\n\n\n

Especially if your store sells handmade artisan or niche products, customers will also want to identify themselves with the product and your store. In an online setting, this is also facilitated by close customer interaction and the customer experience they receive when they unbox their products. And it is at this point where Amazon FBM comes into play. <\/p>\n\n\n\n

Amazon FBM \u2013 Meaning and Utility <\/h2>\n\n\n\n

FBM on Amazon is a fulfillment method where sellers manage their own shipping, returns, warehousing and customer service, as opposed to those using FBA (Fulfillment by Amazon), where these tasks are taken over by the eCommerce behemoth. While the FBM model, which Amazon themselves refer to as \u201cMFN\u201d (Merchant-Fulfilled-Network), is very popular with sellers that already have their own logistics scheme in place, it also grants a lot of advantages for merchants that sell products with emotional value. But who profits exactly and in what way?<\/p>\n\n\n\n

FBM vs. FBA \u2013 Who Is Amazon FBM for? <\/h2>\n\n\n
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Selling over Amazon fulfilled by Merchant means that you retain total control over your fulfillment and therefore also the customer journey your buyers will experience. For whom does this make the most sense?<\/p>\n\n\n\n

You Sell Niche Products<\/h3>\n\n\n\n

Sellers using Amazon FBM benefit from lower fees but are often ranked behind FBA sellers by Amazon\u2019s algorithm. If both sell the same items, FBA sellers have the advantage. However, niche-focused sellers can cut fulfillment costs without worrying about lower rankings, as niche competition is less impacted by the A9 algorithm.  <\/p>\n\n\n\n

You Are Still Selling at Low Volume <\/h3>\n\n\n\n

Amazon FBA can be a worthwhile investment down the line, but initially, it’s a significant cost for sellers. Storage fees and the complications of keeping inventory in a remote warehouse, with no direct access, can cause considerable headaches. <\/p>\n\n\n\n

You Have Plenty of Space to Store Your Goods<\/h3>\n\n\n\n

If you have your own warehouse or extra space at home, Amazon MFN or FBM could be a good fit, as it eliminates storage fees. The cost savings can make FBM a viable option, particularly if you store many items.<\/p>\n\n\n\n

You Already Handle Customer Service and Returns <\/h3>\n\n\n\n

If you\u2019re effectively handling customer service and returns in-house, switching to Amazon FBA may be unnecessary. However, it’s worth exploring FBA for potential benefits. Remember, Amazon FBM often demands more time and effort, especially to win the Buy Box<\/a>.<\/p>\n\n\n\t\t

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The highly customer-centric nature of Amazon has, for one, made the e-commerce giant a household name. Secondly, it has provided sellers from all over the globe with a platform that is teeming with potential buyers. As wonderful as this is, anyone who has b…<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\t\t<\/div>\n\t<\/div>\n\n\n\n

You Sell Products That Fall Into the Shipping Category \u201cOversized\u201d<\/h3>\n\n\n\n

For products requiring special shipping due to size or handling, selling over FBM on Amazon offers flexibility in choosing your shipping company. This can save money and reduce stress, as you can rely on a company specialized in handling large cargo.<\/p>\n\n\n\n

You Sell via Dropshipping<\/h3>\n\n\n\n

For products requiring special shipping due to size or handling, Amazon FBM offers flexibility in choosing your shipping company. This can save money and reduce stress, as you can rely on a company specialized in handling large cargo.<\/p>\n\n\n\n

You Have an Alternative Logistics Scheme<\/h3>\n\n\n\n

If you have a shipping system that suits your needs better than Amazon’s network, leveraging FBM and applying for the Prime by Seller badge may be more beneficial.<\/p>\n\n\n\n

You Sell Products that Require Special Care when Shipping<\/h3>\n\n\n\n

Many sellers of fragile or handmade goods prefer self-fulfillment. While Amazon offers efficient and fast fulfillment, their large scale makes occasional mistakes inevitable. Although Amazon reimburses for these errors<\/a>, handmade items are harder to replace. In this case, Amazon FBM is more sensible, allowing you to ensure proper packaging and care.<\/p>\n\n\n\n

FBM vs. FBA \u2013 Who Is Amazon FBA for? <\/h2>\n\n\n\n

You Have Inventory and No Space to Store It<\/h3>\n\n\n\n

Not everyone has an empty warehouse or an oversized garage at their disposal and even less have the time that inventory management consumes. If you can relate to this, then Amazon FBA may be the right choice for you.<\/p>\n\n\n\t\t

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You Don\u2019t Have Your Own Logistics Scheme<\/h3>\n\n\n\n

If you have a lot of inventory to move but haven\u2019t had the chance to inform yourself about which shipping service provider can offer you the best deal, leveraging FBA may be a valid choice for you. Especially if you take into consideration that Amazon works with a wide variety of carriers and therefore has a lot more reach than any private person could have at the beginning.<\/p>\n\n\n\n

You Have Limited Resources for Customer Support <\/h3>\n\n\n\n

Providing excellent customer support is a service that a lot of sellers struggle with. Especially the time element needed to provide such a service is constantly underestimated. This is problematic because excellent customer service is vital for your seller ranking and therefore for your visibility on Amazon itself. In this regard, Amazon FBM sellers have to fulfill at least the standard that FBA sellers fulfill if they want to keep their seller ranking high.<\/p>\n\n\n\n

Amazon FBA vs FBM \u2013 Advantages of Using FBM<\/h2>\n\n\n
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More Control Over Your Business<\/h3>\n\n\n\n

Outsourcing key elements of your business to another company of course comes with a certain degree of handing over of control. The crucial difference between Amazon FBA<\/a> and FBM is that FBM sellers remain fully in the \u201cdriver\u2019s seat\u201d, so to speak. This rings true especially for shipping since FBM sellers can choose their own third-party logistics (3PL) provider that is maybe even specialized in transporting special types of goods (e.g. highly fragile or very bulky). FBM sellers also control their own storage and warehousing and are therefore not at the whim of Amazon\u2019s warehouse regulations.<\/p>\n\n\n\n

Less Overhead Costs<\/h3>\n\n\n\n

No FBA fees mean less overhead and therefore more revenue. Revenue which can be allocated to different areas where it is perhaps needed more. However, sellers should be aware that this calculation can also be deceptive. After all, the provision of storage space and the operation of their own logistics is often more expensive than using FBA for the same product. <\/p>\n\n\n\n

Less Red Tape<\/h3>\n\n\n\n

Amazon runs a tight ship and that is reflected in their requirements for sellers who want to leverage FBA. Apart from the regular requirements, sellers that choose FBM are also free from having to adapt their business to Amazon\u2019s inventory policy. This advantage became very clear to sellers recently before the backdrop of supply chain issues or the changes in regard to long-term storage fees. In other words, the Amazon FBM shipping rates and requirements (if you want to call them that) are much more flexible than with FBA.<\/p>\n\n\n\n

Customized Packaging<\/h3>\n\n\n\n

Depending on the size or the nature of the products, they might need special packaging and more warehouse space. Two things that come at a high price when selling over Amazon FBA<\/a>. FBM sellers are not bound to this, although they might have to take into consideration special fees when they employ 3PL providers.<\/p>\n\n\n\n

Amazon FBA vs FBM \u2013 Disadvantages of Using FBM<\/h2>\n\n\n
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Logistical Difficulties<\/h3>\n\n\n\n

Unlike FBA users, FBM sellers don’t enjoy the same logistical benefits since they handle fulfillment and shipping independently. This means they miss out on Amazon’s streamlined logistics network, often leading to higher shipping costs and longer delivery times. Despite this, FBM sellers may still participate in programs like click and collect if there are arrangements between Amazon and the service. However, specific requirements or restrictions might apply, so it’s crucial for FBM sellers to consult Amazon Seller Support or the click and collect service provider for precise guidance on participation.<\/p>\n\n\n\n

More Time Spent on Fulfillment<\/h3>\n\n\n\n

Amazon FBM gives you more control over your business but requires more time and effort for tasks like packing and shipping.<\/p>\n\n\n\n

Harder Competition<\/h3>\n\n\n\n

FBA sellers have a higher Buy Box share due to better metrics in customer support and shipping. This may not impact niche sellers as much, but FBA generally outperforms FBM if service quality differs.<\/p>\n\n\n\n

More Time Spent on Customer Service, Returns, and Feedback <\/h3>\n\n\n\n

As an FBM seller on Amazon, you’ll handle customer service, returns, and feedback yourself, which is time-consuming but essential, especially for niche and handmade products.<\/p>\n\n\n\n

Loss of the Prime Badge (?) <\/h3>\n\n\n\n

Switching to FBM doesn\u2019t necessarily mean losing the Prime Badge due to Amazon Seller Fulfilled Prime, but qualifying for and maintaining this badge is challenging and requires an invitation by Amazon.<\/p>\n\n\n\t\t

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How to Use Amazon FBM\/MFN in 7 Steps <\/h2>\n\n\n\n

Step 1: Set up your seller account<\/h3>\n\n\n\n

You will need access to Amazon Seller Central<\/a>, your go-to platform for all things related to selling on the marketplaces. For this you will need to create a seller account<\/a> and choose a selling plan.\u00a0<\/p>\n\n\n\n

Step 2: Create listings and product detail pages <\/h3>\n\n\n\n

This is the \u201cshowroom\u201d where you present your items. Be as descriptive as possible when writing your listings.<\/p>\n\n\n\n

A clear and precise product title will also help your customers find your product. High resolution photographs that they can zoom into will often persuade the buyer to click on \u201cAdd to cart.\u201d<\/p>\n\n\n\n

There\u2019s no need to create a completely new product page if you are selling items that already exist in Amazon stores. In these cases it\u2019s easier to search the Amazon catalog, find the product and list an offer on the product detail page. You can also use Seller Central to add a product offer.<\/p>\n\n\n\n

Step 3: Find a suitable warehouse or similar storage space<\/h3>\n\n\n\n

Whether it\u2019s your own garage or rented space, be sure that it is aligned with your demands and you don\u2019t end up overpaying for storage space you never use. There are many self storage options available in larger cities that also offer good deals if you intend to rent space for a longer period of time.<\/p>\n\n\n\n

Step 4: Create shipping templates in Seller Central <\/h3>\n\n\n\n

Amazon Seller Central enables you to create shipping templates to match your logistic capabilities for both handling time and transit time. What does this mean? In the Seller Central dashboard, you can access the Manage Inventory dropdown menu and assign shipping templates to offers that match your logistics scheme in regard to certain products.<\/p>\n\n\n\n

Step 5: Ensure that your packing is on point <\/h3>\n\n\n\n

Correct picking, packing and shipping ensures that your package arrives safely and decreases your return rate. Also be sure that your packaging and preparation lives up to Amazon\u2019s standard<\/a>.<\/p>\n\n\n\n

Step 6: Install excellent customer service<\/h3>\n\n\n\n

As a company that has put the customer first ever since it was a book store in a garage, Amazon takes customer service very seriously. Amazon FBM\/MFN sellers therefore have their work cut out for them if they want to live up to the standards that Amazon offers with FBA.<\/p>\n\n\n\n

Step 7: Automate tedious processes<\/h3>\n\n\n\n

You will have enough manual tasks to perform as an FBM seller. Be sure to take full advantage of any automation that can benefit your company and save you time and money. A good example is the automation of your pricing strategy<\/a>.<\/p>\n\n\n\n

Amazon FBM Fees<\/h2>\n\n\n\n

There is no particular Amazon FBM fee as there is for Amazon FBA for example. The reason for this is that the sellers piece their fulfillment framework together individually. If you want to compare whether your logistics are cheaper or more expensive than FBA, you can always do so by accessing the Amazon FBA calculator<\/a> and checking how your numbers fare against Amazon\u2019s.<\/p>\n\n\n\n

However, as with every business model, there are certain fees that you have to take into consideration if you want to sell over Amazon FBM. Not taking into account potential costs for storage space and\/or employee wages, here is a breakdown of costs you have to keep an eye on that derive from selling on an Amazon marketplace:<\/p>\n\n\n

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