What is Amazon FBM? How to do Amazon FBM?

The Amazon FBM model can be a good model for some sellers who want to enter the new Amazon. We have answered all the questions you might have about this alternative sales model offered by the company whose global e-commerce network has reached huge figures.

Keep reading to learn everything from what Amazon FBM is, to its fees, benefits, and disadvantages!

What is Amazon FBM?

Amazon FBM is a sales model where you take care of all the processes related to your sales. It stands for Fulfillment By Merchant, meaning shipping/fulfillment is carried out by the seller.

In the FBM model, all processes of sales, such as listing the products you will sell on Amazon, stock tracking, storage, packaging, shipping, and dealing with customer inquiries, belong to you. In other words, Amazon is just your listing space, and everything else is handled by you.

How to Do Amazon FBM?

The Amazon FBM model works just like other sales models. Creating a seller account on Amazon, listing your products, and choosing the "I will ship this item myself" option in the shipping options is enough to implement the FBM model.

However, it should not be forgotten that the FBM model means you will handle all logistical processes yourself. Therefore, make sure you can meet expectations when choosing FBM for your listed products.

When Should You Use Amazon FBM?

Anyone can decide to choose the Amazon FBM route, but running an Amazon business will never be suitable for everyone. FBM will only be suitable for some Amazon sellers, not all.

Generally, Amazon FBM should be considered if you sell the following:

• Exclusive products with low sales frequency

• Small-volume products

• Low-profit products

• Hard-to-ship products (e.g., oversized or fragile)

• Cases where FBM is cheaper than FBA

Fulfillment by Amazon (FBA) fees primarily depend on the weight and dimensions of the product. If sellers can ship their orders at a more reasonable price through their delivery partners/networks compared to using Amazon FBA, it makes more sense for them to opt for FBM.

What are Amazon FBM Fees?

The Pro FBM Amazon seller subscription fee is $39.99 per month.

If you are an individual seller rather than a professional seller, there is no subscription fee, but you pay a fee of $0.99 for each unit you sell. Therefore, if you sell more than 40 units per month, you should upgrade to the Pro package.

Amazon also charges a referral fee. This is because you are a seller in their marketplace, so they consider that they are referring customers to you.

The referral fee is a percentage of your total sales price. In most product categories, this is 15%, but it varies from 6% to 45%. Therefore, you should check in advance depending on the product you are selling.

You also need to consider your shipping costs. Remember, it is your responsibility to pack the orders and ship them to your customers on time.

You should calculate not only the packaging and shipping costs, but also the time you spend picking, packing, and shipping the order.

What are the Advantages of Amazon FBM?

Surprisingly, considering that you have to do all the work, there are many advantages to using Amazon FBM. This is especially true if you are new to selling on Amazon or if you only have minimal inventory.

The advantages of Amazon FBM can be listed as follows:

• The seller has control over every aspect of the business.

• Margins are higher because the seller does not have to pay additional fees to Amazon.

• Brand building is more attainable.

• No need to worry about inevitable losses resulting from policy changes on Amazon.

• There is less paperwork for the seller to deal with when working directly with the buyer.

• The seller has the freedom to run the business as they wish.

• The seller has a better grasp of the inventory in stock, what is selling, and what changes might need to be made for greater success.

• There are no unexpected costs; the seller is aware of all financial situations every step of the way.

What are the Disadvantages of Amazon FBM?

It would be great if there were no disadvantages to being a Fulfillment By Merchant Amazon seller, but as with any concept, there will always be some disadvantages.

The disadvantages of Amazon FBM are as follows:

• Picking, packing, and shipping take time.

• You need to dedicate more time to the daily operation of your Amazon business.

• Shipping rates can be higher.

• Customer service is your responsibility.

• You cannot be eligible for Amazon Prime.

Can Amazon FBM and FBA Be Used Together?

Yes! What many Amazon sellers do not realize is that FBM and FBA can be used at the same time.

If you have a large inventory with a product range featuring many different price points and profit margins, it is advantageous to use different methods depending on the product.

In short, you can split your inventory between FBA and FBM. Thus, your fast-selling products with high margins can be handled by FBA, while your slow-selling products with low margins can be managed by FBM.

Additionally, to learn more about Amazon selling topics, you can click on the link to go to our blog post.

Frequently Asked Questions About Amazon FBM

You can find the frequently asked questions and answers about Amazon FBM by users below.

Is Amazon FBM Better Than FBA?

Amazon FBM can be better than FBA depending on the product you sell and your logistics network. This situation varies depending on the products you have and your process management.

What are Amazon FBM fees?

The Amazon Pro FBM fee is $39.99 per month. The individual seller account is free, but you pay a commission of $0.99 per product.

Who Pays for Amazon FBM Shipping?

The Amazon FBM shipping process belongs entirely to the seller. You can pay the shipping fee yourself or send it as cash on delivery paid by the buyer.

How Much Do Amazon FBM Sellers Make?

Nearly half of Amazon FBM sellers make between $1,000 and $2,500 a month. Some sellers are known to make $45,000 a year.