What is FBM? Pros & Cons of Amazon FBM

Virginia Miller

June 6, 2024

In this article

If you're an online business owner, you've probably heard of FBM – or 'Fulfilled by Merchant' as it's formally known. It's a way of fulfilling Amazon's orders that can save you time and money, but is it right for your business? In this post, we'll take a look at the pros and cons of FBM so you can make an informed decision about whether or not to use it.

What is Fulfillment by Merchant (FBM)?

Fulfillment by Merchant (FBM) is an order fulfillment method offered by Amazon where sellers ship products directly to customers after an order is placed. With FBM, sellers can either ship items from their own warehouse or use Amazon's fulfillment centers. However, the seller is responsible for customer service and shipping the final package.

Why Use FBM?

There are several key reasons sellers choose FBM over other fulfillment options:

Lower costs since there are no monthly storage fees
Full control over packaging, shipping options, and delivery speed
Easier inventory management using Amazon's tracking system
Ability to compete for the Buy Box by offering low prices or fast shipping
Higher profit margins compared to other methods like FBA

Downsides of FBM

However, FBM also comes with some potential downsides to consider:

Managing your own inventory levels and reorders
Responsibility for getting orders to customers on time
More labor intensive with picking/packing/shipping tasks
Risk of products being damaged during shipping
Overhead costs like packaging and shipping supplies
Intense competition from other sellers using FBM

Deciding Between FBM and FBA

Choosing between FBM and FBA depends largely on your unique business needs. FBM offers more control while FBA prioritizes convenience and reach. Consider factors like:

Number of products you sell
Your existing warehouse and labor capacity
How much you value speed and branding control
Your tolerance for operational tasks like shipping

Analyze both fulfillment models to decide which provides the right balance of affordability, profitability, and manageable workload for your business.

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FAQs

What are the main advantages of FBM?

The main benefits of Fulfillment by Merchant include lower costs since there are no monthly storage fees, full control over packaging/shipping options, easier inventory management using Amazon’s system, and higher profit margins.

What are the biggest disadvantages of using FBM?

Potential downsides of FBM include having to handle all inventory management and shipping tasks yourself, overhead costs like packaging materials and labels, and having to compete against other sellers using the same fulfillment method.

Should I choose FBM or FBA for my Amazon business?

It depends on factors like your number of products, existing warehouse capacity, how much control vs convenience you want, and your ability to handle operational tasks like order fulfillment. Compare FBM and FBA to pick the right model.

Can I use Amazon's fulfillment centers with FBM?

Yes, with FBM you have the option to either fulfill orders from your own warehouse or have Amazon fulfill orders using their network of fulfillment centers while still handling shipping.

Do I need to pay any monthly fees for FBM?

No, one of the main benefits of FBM is there are no monthly storage fees like there are for FBA. You only pay Amazon directly for orders fulfilled through their centers.

Can I customize packaging and shipping with FBM?Yes, FBM gives you full control over packaging options and shipping methods. You can choose packaging that fits your brand and budget along with faster shipping speeds.

Is there less competition for the Buy Box with FBM?FBM gives you the ability to compete for the Buy Box by offering low prices or fast shipping times. However, there is still typically high competition from other FBM sellers.

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