Mastering Fulfillment By Merchant: Your Guide to FBM Success

Nearly two-thirds of Amazon sellers use FBA as their chosen fulfillment method, but that doesn’t mean FBA is the best fit for everyone. If you’re exploring other alternatives, Amazon FBM could be the right choice for you. It’s important to understand its unique characteristics and benefits to help you determine if it’s the best option for your business.

In this article, we’ll guide you through the steps of setting up Amazon FBM and share tips on managing it effectively.

Amazon FBM is a fulfillment method where the seller handles every aspect of the entire order process. This includes storing products, packaging them, shipping orders directly to customers, and handling the return process or customer service inquiries. In contrast, FBA sellers outsource these tasks to Amazon’s fulfillment centers for a fee.

Another difference between FBA and FBM is the type of seller who typically uses each method. FBA is suitable for wholesalers with larger order volumes, making their fulfillment fees more manageable. FBM is typically preferred by online arbitrage sellers with lower inventory turnover, as well as dropshippers, since suppliers ship their orders directly to customers.

Amazon sellers need to evaluate FBM carefully to determine if it’s the right choice for their business. Let’s explore what FBM can offer as an alternative to Amazon FBA, beyond just avoiding FBA fulfillment fees.

To determine whether Amazon FBM is worth it, it's important to understand the specifics, including both the pros and cons.

Here are some of the key advantages of using FBM as a fulfillment method:

FBM can be a great option for those looking to reduce their dependence on Amazon and gain more control over their business. However, this method also comes with significant disadvantages that require careful consideration.

The cons of FBM include the following:

Despite these disadvantages, FBM can still be profitable and cost-effective for specific types of products. Let's explore which kinds of items make FBM a worthwhile option.

By strategically selecting products that align with the benefits of FBM, sellers can leverage this fulfillment method to enhance their business success. The meaning of this model is that you would be processing orders yourself. Therefore, you might want to consider the following types of products:

If you're thinking about selling items in these categories but haven’t decided on a product yet, it’s essential to confirm its profitability first and ensure that it doesn’t face significant competition. This requires thorough product research and market analysis, which can be achieved using analytical tools that take time to learn.

To save time and gain insights more easily, sellers can take advantage of professional product research services from Sellerhook.

Sellerhook's specialists perform personalized research to identify the best opportunities for your business, utilizing advanced tools and extensive experience. To receive a tailored list of profitable products suitable for the FBM fulfillment method, simply follow these steps:

1. Place your order. On the Sellerhook website, choose whether you want to receive either one or five top product recommendations.
2. Answer a few questions. Share your preferences for product categories, price range, and any specific requirements (such as the FBM shipping method) to help Sellerhook’s specialists customize their research to meet your needs.

3. Receive your report. You will receive a detailed report via email within 10 business days.

Sellerhook simplifies the process of product research by providing in-depth insights and recommendations for your Amazon business. This ready-made solution enhances your chances of running a profitable venture by identifying products that align with your fulfillment method and are in high demand among customers.

Now that we have an idea of what kind of product to sell, let's review the setup process for starting with Amazon FBM. While it may vary depending on the specifics of your business, here are five general steps to help you get started:

To sell on Amazon, one of the key requirements is having an Amazon seller account. If you don't have one yet, here's how to register:

1. Choose your selling plan on Amazon’s website. The Individual plan charges $0.99/sale, while the Professional plan has a monthly fee of $39.99.
2. Enter your details. Provide your personal information (name, contact info, address) and business information (store name, etc.).
3. Submit your documentation. Upload a bank statement and a photo of your ID.

Amazon will schedule a verification video call to review your documents. Once the verification is complete, you'll be able to start your FBM business.

Once your Amazon account is live, you can start listing products. The process varies, depending on whether a product exists yet on Amazon. If the product is already listed, just join the existing listing through your Amazon Seller Central account. Then set your price and specify the delivery speed.

If the product is new (e.g., your own brand), you’ll need to create a new listing. Follow these steps:

1. Go to the "Inventory" section in your Amazon Seller Central dashboard and select “Add Products”.
2. Enter product details like the title, description, and bullet points. Set your price, specify quantity, and upload photos.
3. Choose your fulfillment method (FBM) by adjusting the default FBA setting.
4. Click “Save and Finish” to upload your listing.

If you want your listing to stand out, you need to ensure it’s optimized for SEO, follows Amazon's guidelines, and appeals to customers. This process can be complex and time-consuming, so outsourcing it to professionals like those at Sellerhook can be a smart option to save time and drive traffic to your store.

Sellerhook's expert team uses precise keyword data to choose the most effective keywords, which ensures that your listing is prioritized by Amazon's algorithm. This boosts visibility and increases your chances of making a sale. The team’s extensive experience ensures that your listing adheres to all of Amazon’s rules while making the text appealing to customers.

To use Sellerhook's service, simply follow these steps:

1. Place an order. Choose whether you want to order one or three product listings on the Sellerhook website.
2. Complete a brief questionnaire. Answer a few questions about your product to help the experts tailor the listing to your specific business needs.
3. Receive your listing. You’ll get the completed product listing via email within 10 business days.

The product listing comes complete with a catchy title, cohesive bullet points, and an attractive description, plus backend keywords, which increase your chances of ranking higher in search results. The experts will also identify relevant keywords for your PPC campaigns, further boosting your visibility.

This approach allows you to save time and focus on other important business tasks. Let’s take a look at some of those key areas below.

To make the most out of FBM, it's essential to optimize your order fulfillment process. Key aspects to focus on include:

Avoiding mistakes like sending wrong products, shipping delays, and canceled orders helps ensure a positive customer experience. However, to truly enhance this, implementing a strong customer service strategy is essential. Let’s explore this further.

FBM sellers handle customer support themselves, unlike FBA sellers who outsource this task to Amazon. To keep customers satisfied, it's vital to respond to their messages promptly (within 12-24 hours). You can also reduce the number of queries you receive by providing detailed product information, such as size charts or certifications, to address common concerns upfront.

Establishing a clear and accessible return policy is equally important, as FBM sellers manage returns directly. Ensuring that customers are aware of your return process can prevent disputes and streamline returns.

Offering excellent customer service not only improves your chances of receiving positive reviews but also boosts your credibility and trustworthiness, helping you attract more customers in the long run.

Once you launch your business, you might want to focus on growing it. Here are a few effective strategies:

By applying these strategies consistently, you can not only break even but also scale your business, leading many sellers to wonder how much of an investment is needed to start with Amazon FBM and achieve success. Let’s explore the estimated pricing and fee structure for this fulfillment method.

Amazon FBM costs can vary based on several factors, including shipping expenses, marketing strategies, and more. On average, starting an Amazon FBM business requires an investment of around $1,000. However, some sellers launch successfully with less than $500.

Here’s a rough breakdown of the typical expenses:

While these costs may seem significant, a profitable product can easily cover them, making Amazon FBM a viable business model.

Amazon FBM can be beneficial for sellers who prefer to retain more control over inventory management or sell products that aren’t allowed or profitable with FBA. By handling shipping on their own, sellers can potentially save on costs by choosing couriers with the cheapest shipping rates. However, this method demands time and resources for storage and fulfillment, which may not suit everyone.

To switch from FBA to FBM, go to the Inventory section in your Amazon Seller Central account and click ‘Edit’ for the listing you want to update. From there, choose “Change to Fulfilled by Merchant”. You can make this change for individual listings or in bulk. If you have inventory in any FBA centers, you can request that Amazon return it to you, attempt to sell it within a month, or destroy it.

The choice between FBA and FBM depends on your specific business needs. FBA is best for high-volume sellers, as it streamlines operations, but this model also incurs fees and creates dependency on Amazon. On the other hand, FBM allows sellers to avoid FBA fees and gain more control over fulfillment. However, it also requires managing more tasks and limits benefits like access to Prime customers.

FBM has its pros and cons, but many sellers stick with it because FBA isn't the right fit for everyone. To get the most out of FBM, consider focusing on selling products that align with this fulfillment method and are profitable. Using Sellerhook's professional services can provide personalized ideas for promising products to sell, increasing your chances of business success and future growth.