Without a question, Amazon is the industry leader in e-commerce. Their D2C business model has provided an opportunity for every seller to start selling on the platform and earn maximum profits.
Whether it be a business owner wanting to expand his customer base, or a newbie wanting to start his selling journey through Amazon, it has now become a marketplace for all. All you have to do is create an Amazon seller account, provide the necessary information, choose a fulfillment method, and voila! you are done.
You have two major choices for sales fulfillment when you start selling on Amazon: FBA (Fulfillment by Amazon) or FBM (Fulfillment by Merchant). However, how would you find out which fulfillment path is the best for you?
While most Amazon sellers choose FBA, considering the advantages it offers, FBM isn’t a bad choice either. Without getting into the FBA vs. FBM debate, let’s find out why FBM can be a good option for your business.
What is Fulfillment by Merchant?
FBM (Fulfillment by Merchant) is when sellers are responsible to ship their items directly to the customers. If sellers choose FBM, then they will have to handle the entire storing, packaging, and shipping process.
Instead of paying Amazon a service fee to handle and ship the inventory to customers, sellers take control of everything and ship their items to customers from their warehouses, or offices.
As a result, the seller is obliged to track down all the purchased items, pack, and send them, as well as manage any inquiries from buyers and returns.
What are the benefits of FBM?
1. You are the boss!
With FBM, sellers have control over each aspect of their business. This control comes with the option of personalization as well. When you are fulfilling every order on your own, you can choose how to package every product, and how to protect it.
You can find creative ways to make your customers happy such as adding a personalized thank you card or giving them something extra if you will! Moreover, sellers can also figure out ways to minimize costs.
You have maximum control over your packaging, branding, and shipping. You are the one in charge, the manager, and the boss.
2. Free from the additional fee
You won’t have to pay any additional fees that FBA sellers need to. You will be shipping your items on your own, so you won’t have to pay for the Amazon warehouses, shipping, or other charges.
You can have greater profit margins since you will only be paying for what you are shipping, and nothing else.
3. Less paperwork
It’s easier for you to sign up, create an account, and start selling! You will have to deal with less paperwork since you will be dealing directly with your purchasers, rather than including Amazon in between.
If you include Amazon to handle your operations, then obviously it is required to complete all the necessary paperwork before you get onboard. But with FBM, you will be responsible for everything, hence less pressure.
4. Best for low-volume sellers
FBM is the best option for sellers dealing with low-volume sales. If you can easily manage to pick, pack, and fulfill your orders, then choose FBM.
You can sell your products and provide your customers with the best customer experience without worrying about extra storage costs. However, if you are a high-volume seller, then you won’t be able to manage everything on your own.
In that case, it’s better to go with FBA.
5. Entry to the newest Prime program
Amazon has just introduced a new Prime program that allows third-party FBM merchants to enroll their items in their SFP (Seller Fulfilled Prime) program, opening the doors to greater revenue streams.
Amazon does, however, demand that FBM sellers conform to stricter sales fulfillment criteria. Moreover, FBM sellers can also compete for the Amazon Buy Box if they have the best sales history.
In conclusion
Whether it’s FBM or FBA, make sure you pick your side after taking each factor into account.
Do your research, see what will work best for your business, and then choose. Good luck!