Selling on Amazon is a lucrative, flexible, and primary source of income for Amazon’s 6 million sellers. In fact, anyone can sell on Amazon if they have the necessary resources and time. What’s more, you can sell online from anywhere in the world through the Amazon FBM (Fulfillment by Merchant) program.
And while most Amazon sellers use the Fulfillment by Amazon (FBA) method of storing and shipping items from Amazon warehouses, there is a great alternative to it, like the FBM program.
We’ll tell you how to get started selling on Amazon and making deliveries through FBM.
What is Amazon FBM? How do I make deliveries through the FBM program?
Fulfillment by Merchant (FBM) is a method of selling on Amazon in which the seller places their goods on Amazon, but manages the storage, delivery, and customer support themselves (or through a third party).
It turns out that instead of shipping goods to Amazon’s warehouse, companies do these processes themselves and have more control over their inventory and branding.
Another delivery method available to Amazon sellers is Amazon Fulfillment By Amazon or Amazon FBA. Of course, there are specific Amazon FBA delivery requirements that brands must follow.
With Amazon FBA, companies ship their products to an Amazon warehouse, where Amazon sellers store, package and ship the goods to customers.
But today we’ll talk only about FMB.
What do I need to consider in the Amazon FBM program?
When working in the Amazon FBM program, you need to:
Ship items in a timely manner.
Your brand should be able to package and ship the order within two days after Amazon notifies you of the customer’s purchase.
Of course, you can (and should) aim to ship much earlier than that, but Amazon gives you a window of 48 hours to have time to ship your order.
One of the significant advantages of FBM is that your brand can control the shipping process. You are not dependent on Amazon’s shipping deadlines and procedures.
With flexibility comes responsibility for making sure customers get their orders on time. If you can’t meet Amazon’s two-day delivery deadline, you may want to consider another method of fulfilling orders.
Keep the goods in your own company warehouse.
Another significant benefit of FBM is that your brand gets to control inventory. Your company can store products in its warehouse and fill orders as they come in.
This gives you more flexibility in inventory management. You’re not dependent on Amazon’s inventory levels or minimum order quantity.
The seller can keep as much or as little inventory in their warehouse as you want. But! you are responsible for maintaining adequate inventory levels.
Choose carriers and method of delivery.
With Amazon’s FBA program, you can use Amazon’s carriers and delivery methods. However, with FBM, the seller chooses both carriers and shipping methods.
Choosing your own shipping method gives you more control over the shipping process and allows you to find the carrier that best meets your needs. You can choose the shipping method that you think will be most effective for your brand.
Remember, however, that shoppers will expect free shipping if they are used to Amazon’s two-day shipping. You need to decide if you want to offer free shipping or if you will charge for shipping.
Provide top-notch customer service.
Since you are in control of your own customer service, you need to provide excellent customer service.
Customers will contact you directly with any questions or concerns about their orders.
You should have a customer service team that handles these issues quickly and professionally.
Carry out the return and refund process internally.
The seller should also handle the returns and refunds process internally on their own. Your brand should have a return policy and prepare to handle returns.
It is important to remember that customers will expect the same level of service from you as from Amazon.
Control inventory levels.
As you control your own inventory, you will also have control over maintaining your inventory levels.
It’s your responsibility: how much product you want to keep in stock, whether or not you have enough product to meet customer demand.
If you run out of any product, you will have to contact the supplier and ask him to deliver it to your warehouse.
How does the sales process work with Amazon FBM?
As we said, once Amazon notifies you that your order is ready to ship, you have 24 hours to confirm the shipment of your order.
You need to choose a competent carrier. There are several options in the US, including USPS, FedEx, UPS, and DHL.
In addition, larger items such as furniture or mattresses may require a shipping truck. This also needs to be considered.
What items do FBM sellers need for shipping?
The carrier and the method you’re shipping the item also helps determine what vehicles you’ll need to ship the item.
Some shipping methods – like USPS Flat Rate – use special boxes that you can get for free at your nearest post office. Or you can have them delivered directly to your door.
Other methods require your own shipping supplies:
- Boxes, envelopes, etc;
- Packaging material (air bags, brown paper, etc.);
- Mailing labels;
- Printer;
- Packing tape and duct tape.
Pros and cons of Amazon FBM
Here are a few pros and cons of shipping via Amazon FBM.
Pros of Amazon FBM
FBM sellers earn more income
- 33% of FBM sellers earn more than $25,000 per month compared to 26% of FBA sellers.
- 53% of FBM sellers have lifetime total sales of more than $100,000, compared to 46% of FBA sellers who claim the same.
- FBM salespeople spend less money to start their businesses
- 37% of FBM salespeople started with less than $1,000 compared to 27% of FBA salespeople.
- 35% of FBA sellers started with more than $5,000 vs. 27% of FBM sellers.
- FBM sellers started their business faster
- 51% of FBM sellers took less than six weeks to start on Amazon compared to 34% of FBA sellers.
- 47% of FBM sellers turned a profit in less than three months compared to 38% of FBA sellers.
Cons of Amazon FBM
- FBM sellers spend more time on their business
- 20% of FBM sellers spend more than 40 hours a week on their business on Amazon compared to 16% of FBA sellers.
- FBM sellers are more concerned about competition
- 72% of FBM sellers are concerned that increasing competition is driving down prices, compared to 70% of FBA sellers
- 57% of FBM sellers are concerned that Amazon sells products that directly compete with their own, compared to 51% of FBA sellers.
For new Amazon sellers, the costs of FBM may be higher than those of FBA.
5 Best FBM practices from Amazon
According to Amazon’s best practices document, here are some recommendations for selling your items through FBM.
Use Amazon’s ‘Buy Shipping’ feature.
One of the easiest ways to make sure your orders arrive on time and have tracking numbers is to buy shipping directly through Amazon using Amazon’s ‘Buy Shipping’ feature.
When an order is placed for one of your products, Amazon gives you the option to buy shipping directly from them. To access Amazon’s ‘Buy Shipping’ feature, go to Orders > Manage Orders. Then click on ‘Buy Shipping; next to the order you want to ship. Then check the information and confirm. Finally, print the label.
Once you buy shipping through Amazon, it will automatically confirm the order and send the customer a tracking number.
Always include tracking numbers.
Amazon requires that all orders have a tracking number. If you buy shipping through Amazon, the tracking number will be automatically generated and sent to the customer.
Manage delivery times intelligently.
Amazon strives to make sure all customers receive their items on time, so it’s important to confirm, package, and ship your items in a timely manner. And if you sell an item with Premium or Prime delivery, it should be delivered by the guaranteed date.
Include a good return policy.
Make sure there are clear return instructions in the packaging, as well as a valid return address.
Remember, if a customer requests a return, you must accept it.
Follow Amazon’s competent dropshipping policy.
Identify yourself as the seller of your items on all packing lists, invoices, outer packaging, and other information included or provided in connection with them. Be responsible for accepting and handling customer returns of your products.
To summarize: Benefits of Amazon FBM
If you decide to work through the Amazon FBM program, your business will need less cash investment to get started. The lower start-up requirements are helpful because you don’t have to worry about Amazon FBA weight, size, and inventory fees.
However, fulfilling seller orders also comes with a number of challenges. Your brand must have a well-oiled process to ensure timely delivery of items if you are fulfilling orders yourself.
Your company is also responsible for maintaining inventory levels and dealing with customer inquiries.
Overall, Amazon FBM can be a great option for companies that want more control over their inventory and branding. The key is to make sure that you have a robust process in place to ensure that orders are delivered on time.
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