What is Amazon FBM (Fulfilled by Merchant) & How it Works
Thursday, August 8, 2019Eric Zegarski
Here's What Amazon FBM (Fulfilled by Merchant) is and How it Works
When it comes to selling on Amazon, you have a few options when it comes to your vendor status. Amazon’s vendor relations can be split into two categories, Vendor Central and Seller Central. With Vendor Central, Amazon buys the product directly from you. They deal with logistics associated with selling your product to the customer and order fulfillment as well. For smaller merchants, Seller Central is a more appealing approach. The merchant has their products listed on Amazon, but Amazon does not own the inventory. When it comes to Seller Central fulfillment, Amazon offers two options, FBA (fulfilled by Amazon) and FBM (Fulfilled by Merchant). If you’re looking to experiment with selling on Amazon and growing your multi-channel or omni channel, then FBM is a great way to start. As your Amazon sales grow you can always migrate to FBA.
How Amazon FBM (Fulfilled by Merchant) Works
After setting up a seller account on Amazon and creating listings for your products, you’re ready to sell on Amazon. With Fulfilled by Merchant, it’s your responsibility to handle the fulfillment process from start to finish. In addition to packing and shipping, you are also responsible for handling returns and providing customer service. It’s also your responsibility to find your own shipping and fulfillment providers such as FedEx or USPS.
Associated Fulfilled by Merchant Fees
With Amazon FBM , there are two plans a merchant go with to be listed on Amazon. The Pro Plan is $39.99 a month and has no per item selling fees. Alternatively, a merchant can choose to go with the Individual Selling Plan, which has no monthly fee but Amazon gets $0.99 for every item sold. In addition, no matter which plan you’re on, Amazon chargers a referral fee based on your product category. A breakdown of their associated category fees can be found here
Why Amazon FBM Might be Right For You
If you’re just getting started with Amazon, then Fulfilled by Merchant is a simple way to get stated. As your sales volume grows, then you can always transition to their Fulfilled by Amazon program. If you’re a well know national brand, then you should consider applying to their Vendor Central program. However, with Vendor Central, you’ll need to meet Amazon’s EDI requirements
too. In addition, if the products you sell are one-offs or you don’t expect to do large volumes on Amazon, then FBM is the right choice for you.
Advantages to Fulfilled by Merchant
Even though you are responsible for fulfilling orders and managing customer relations, there are several advantages to Fulfilled by Merchant. Here are just a few:
- As a merchant you maintain control over the business
- Greater margins if you’re able to find cost effective shipping solutions
- An opportunity to build an independent brand
- Less unavoidable losses due to sudden changes to Amazon’s policies, therefore no unexpected costs
- Maintain inventory using your own protocols
Integration Supercharges Your FBM (Fulfilled by Merchant) Amazon Sales Channel
As a merchant on Amazon, it’s your responsibility to ensure orders are fulfilled and delivered in a timely manner. If you fail to ensure that your orders are delivered in a timely manner, then you can face hefty fees from Amazon. An integration via an iPaaS (integration platform as a service) can save you time by eliminating the need for manual data entry, ensure data integrity, and update order/inventory information almost instantaneously between Amazon and your ERP of choice. Integration allows you to fulfill orders faster and focus on shipping vs entering data/orders manually between Amazon and your ERP. If you’re looking to optimize your label printing process, then we highly recommend checking out ShipStation
too. We have a pre-built connector for them!
We also have a pre-built Amazon connector
! That means that we can get your integration up and running quickly. In addition, we are hosted on Microsoft Azure, therefore ensuring an almost 99.99% uptime and industry leading security. With an integration solution, you can ensure that your commerce network is connected and communicating data bi-directionally. If Fulfilled by Amazon seems like a better solution for you, learn all about it here