If you already have a web store, you can use Amazon FBM to fulfill your own orders. Here’s your guide to everything FBM.
Starting your web store from scratch is a big deal. You’re responsible for sourcing your products, handling inventory, fulfilling orders, shipping, and communicating with customers.
Selling on Amazon can be a massive change since you’re used to wearing so many ecommerce hats. Fulfillment by Amazon (FBA) is one of the services they promote since it’s a more straightforward solution for many companies.
Fortunately, you can still sell on Amazon and maintain the same processes with Fulfillment by Merchant (FBM). This solution allows sellers to support their fulfillment methods and list their products on Amazon.
What is FBM?
Amazon FBM is a program in which the seller is responsible for fulfilling all orders. This means the seller must handle storage, picking, packing, shipping, inventory, customer service, and more.
There are many reasons why brands may choose FBM over FBA. A seller may already have a warehouse or work with a third-party logistics (3PL) provider. New sellers with small inventory may also prefer FBM since they can handle shipping and customer service.
There are many considerations when choosing FBM or FBA, but we’ll cover those in another section. For now, let’s explain FBM’s features, fees, and some tools.
Features
Amazon FBM includes many features that improve shipping, product listings, customer service, and more. Here are some of the most essential features:
- Multi-location inventory. Sync your inventory across multiple warehouse locations in real-time.
- Amazon buy shipping. Purchase and print shipping labels in one place.
- Shipping settings automation. Have more accurate shipping arrivals and calculations based on past deliveries, the warehouse location, and your customer’s location.
- Seller Fulfilled Prime (SFP). A program that allows sellers to qualify for Amazon Prime.
Fees
Like FBA, Amazon FBM has a fee-based structure. There are three main fees that sellers should expect:
- Monthly subscription fee. This is the cost of the service. Sellers can pay $39.99/month and avoid excess selling fees.
- Referral fees. A fee that is added to product sales. These fees vary between 6% and 45%. The referral fee you incur depends on the product category.
- Per-item selling fee. A 99-cent fee that is added to each sale.
Tools
Handling your fulfillment can be a hassle. Fortunately, FBM includes many tools that can automate many aspects of the fulfillment process.
All FBM sellers access the Amazon Seller App. This is an all-in-one platform to fulfill orders, analyze sales, manage offers, source products, handle returns, track inventory, and handle customer service.
Another tool is Veeqo. This multi-channel shipping tool finds the lowest shipping rates and integrates with other ecommerce platforms like eBay, Shopify, Etsy, and Walmart.
Pros and Cons of Amazon FBM
There’s no reason to change your strategy if you already fulfill customer orders. FBM offers tools and other solutions to help sellers handle their business. That said, FBM isn’t perfect. Here are the pros and cons of this program:
Pros
- Lower shipping costs. Amazon offers pre-negotiated shipping rates cheaper than those of many major carriers.
- Customize fulfillment and delivery. Sellers can set their capacity limits, shipping strategies, transit times, and handling preferences.
- Qualify for Prime. FBM sellers can still use Amazon Prime for fast shipping by enrolling in SFP. That said, you’ll need to meet SFP requirements.
- Manage your inventory. Sellers who prefer being in control can manage their storage and inventory.
- Customize your return and refund policy. If your policy differs from Amazon’s, you can handle returns and refunds your way.
- A better option for specialty products. If you sell bulky, heavy, temperature-sensitive, or fragile items, you can fulfill these products yourself using your tried and true methods.
Cons
There are still some downsides to Amazon FBM. Here are some challenges that FBM sellers may face:
- Learning curve for new sellers. Handling your fulfillment is a hassle. If you’re a new seller, it’s best to let Amazon handle the fulfillment so you can grow your business.
- 3PL cost. While sellers won’t incur extra fulfillment fees with FBM, ecommerce companies will take on additional expenses to store and ship their products. This includes the cost of a 3PL company or the warehousing and labor expenses.
- Time-consuming. Self-fulfillment takes a lot of time. You’ll need to handle your inventory, store your items, pack boxes, and ship them DIY. You can let Amazon handle this process and take on other tasks related to your store.
Amazon FBM vs FBA
All sellers have different needs, and DIY fulfillment may work better than letting Amazon handle it for you. Is Amazon FBA vs FBM the better option?
FBM
FBM is better for your web store if:
- Have special shipping needs
- Have a warehouse or work with a 3PL company
- Are adamant about branding (such as using branded packaging)
- Don’t want to incur extra fees
FBA
Amazon FBA is the better choice if:
- You want to save time
- Don’t mind outsourcing fulfillment
- Don’t already have warehousing or a fulfillment solution
- Would rather not handle customer service or returns
- Want to sell internationally
How to Sell on Amazon FBM
Selling on Amazon FBM is simple! If you know this is the fulfillment option you want, follow these steps to get started.
Amazon FBM Requirements
Before selling on FBM, review their packaging requirements to ensure your products arrive damage-free. Amazon will also need information about your business before listing your products.
Basic information:
If you’re in the US, you’ll need this information before you can sell:
- Business information (such as name, address, and contact information)
- Employer identification number (EIN)
- Bank account information
- State tax ID number
Remember that these requirements may differ between countries and regions. For example, if you’re an EU seller, Amazon will need your VAT number.
Packaging:
- All packaging must include either the manufacturer’s or FNSKU barcode.
- Every item must be secured in a package, either a bag or box.
- Poly bags must have a suffocation warning (print size must have a font size between 10 to 24, depending on the bag size.)
- Items sold as a set must be marked on the packaging.
- All boxes must have six sides, and any openings must be secured.
- Maximum box size is 25 inches on every size with a maximum weight of 50 pounds.
- Any box over 50 pounds must have a “team lift” sticker on all sides, and any box over 100 must have a “mechanical lift label” on all sides.
- If the item is heavy or fragile, bubble wrap or similar materials (paper, inflatable pillows, and/or foam sheeting) can be used. If bubble wrap is needed, it must be taped around the product and pass a three-foot drop test.
- Don’t use foam strips, packaging peanuts, shredded paper, crinkle wrap, styrofoam, or thermocol chips.
Sign Up
After reviewing and preparing these requirements, it’s time to sign up for your account.
Head on over to Amazon Seller Central. Fill out the required forms and select “fulfillment by merchant.” Amazon usually approves applications on the same day, but sellers may need to wait a couple of days.
Create Product Listings
After Amazon approves your information, you can create your product listings. Enter the product’s SKU number, price, title, description, images, and quantity in your inventory. When you reach the fulfillment part, select “I will ship this item myself.”
Set up Shipping and Return/Exchange Policies
In the Settings section, you can set up shipping information, including your general transit and handling times and capacity limits. This is also where you’ll choose any shipping tools or platforms.
From here, go to the Returns section and enter your policy. You don’t need to use Amazon’s exact policy, but if you’re a Prime seller, you must meet or exceed it.
If you receive a return request, you can view it under the Manage Returns tab. Sellers must respond to return requests within 24 hours.
Manage Inventory and Fulfillment
Once you start getting orders, it’s time to manage your inventory and fulfillment. Click Manage Orders to review orders, confirm shipping, and contact customers.
The Manage Inventory section allows you to update product amounts and select any tools you want to use.
If you use 3PL or any third-party tools, they should be able to integrate into Seller Central. Contact support if you don’t know if a particular service or tool integrates with Seller Central.
Handle Customer Service
As stated, you can interact with customers under Manage Orders. Check this area regularly and stay updated with questions, comments, and concerns. This is also where you’ll view any order cancellation requests.
Monitor Performance
You can view various KPIs in your Account Health dashboard. These metrics monitor your selling performance.
While there are multiple sales metrics to track, you should also ensure your shipping meets Amazon’s requirements. Additional metrics to track include late shipments, order defects, and pre-fulfillment cancellations.
Product Sourcing Tips for Amazon FBM
Amazon has numerous product requirements for FBA that FBM sellers can avoid. FBM sellers should consider some criteria, such as:
- Low-priced products
- Niche items
- Fragile products
- Oversized items
Your product selection doesn’t have to fit these categories, but you use these items as a competitive advantage to separate your brand from other FBA sellers.
FAQs
Can I do both FBM and FBA?
Absolutely. In fact, this is an excellent strategy if you sell certain prohibited items on FBA. Sellers can use FBM for the prohibited items while using FBA for the other products in their inventory.
This is also a great method if you use FBM domestically but would instead do FBA internationally.
Is FBM or FBA more expensive?
This depends on the products you sell. If you sell heavy items, FBA will be more expensive because you’ll pay higher fees. But if you use a pricey 3PL, FBA will be more affordable.
FBM isn’t working out. Can I switch to FBA?
Yes, and it’s very easy to do. On your product listings, choose fulfillment by Amazon. Remember that you must first ship your inventory to Amazon fulfillment centers, so it’s best to take down your listings briefly.
Who pays for shipping on Amazon, the seller or the customer?
Technically, the buyer pays for the shipping. However, there are certain cases where sellers can take on shipping costs, such as “spend a minimum amount and get free shipping” deals.
Do FBM sellers need to use Amazon’s courier?
Yes, you can use USPS, FedEx, UPS, or any other courier as long as you use FBM.
How do FBM sellers get paid?
When you ship an order, the funds will be added to your Seller Central account. Amazon directly deposits this into your bank account every two weeks.
What is Amazon’s return policy and why must I meet it?
According to Amazon’s return policy, customers can request a return 30 days after shipment. There are some exceptions, such as larger return windows for the holidays. Note that not all products, such as perishables, can be returned.
If you use Seller-Fulfilled Prime, you must meet or exceed Amazon’s return policy. Otherwise, you can have your own return policy.
Is Amazon FBM Worth It?
If you already have a thriving web store with your fulfillment process, you can use Amazon FBM to sell your products in the biggest global ecommerce marketplace.
With Amazon FBM, sellers fulfill their orders. Amazon offers many features to ease the fulfillment process for sellers, and store owners can also work with a third-party 3PL.
While FBM has advantages, it’s also time-consuming. Sellers must spend extra time handling inventory, warehousing, and shipping, which takes time away from their business.
Luckily, we can help. We will match you with an expert team and craft a selling strategy based on your goals.
Author
Stephanie Jensen has been writing ecommerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.
