Competition in the ecommerce industry is getting stiffer every day. Nowadays, not offering next-day delivery can result in revenue loss, with shoppers choosing online stores that can deliver orders within 48 hours. This has made selecting the right fulfillment method an essential part of managing operational costs and delivering positive customer experiences.
Amazon Fulfillment by Merchant (FBM) is one of the several options available to merchants on Amazon’s marketplace. At its core, sellers list their products on Amazon but handle the storage, packaging, and shipping of orders themselves.
Let’s review how Amazon FBM fulfillment works and how merchants stand to benefit from it.
Key Differences Between FBM and FBA
Fulfillment by Merchant and Fulfillment by Amazon (FBA) are the two main fulfillment options available for sellers on Amazon. The difference between the two lies in who manages the logistics operations.
The Amazon FBM fulfillment approach allows sellers to exert more control and flexibility, especially if they already have an established in-house logistics operations workflow. As a seller on Amazon, you get more control over inventory management and shipping methods.
On the other hand, FBA allows merchants to send their inventory to Amazon warehouses or fulfillment centers. From there, Amazon takes responsibility for storage, picking and packing orders, shipping, and handling customer complaints and returns.
Using Amazon FBA provides access to Amazon Prime eligibility. A notable downside is that it involves extra fees, such as storage, fulfillment, and long-term inventory charges.
Cost Advantages of Using FBM for Ecommerce Sellers
The primary reason why many sellers prefer using Amazon FBM fulfillment services is that it offers greater cost control. FBM permits you to manage logistics independently. This can significantly reduce operational costs, particularly for businesses that already have their own storage facilities or logistics networks.
Instead of paying for warehouse space within Amazon’s network, sellers can store inventory in their facilities or work with third-party logistics providers like Packageman at lower rates. Through this, FBM sellers can select their preferred carriers and negotiate shipping rates based on volume, resulting in better pricing.
Moreover, you still maintain full control over packaging and fulfillment processes, allowing you to optimize costs and reduce unnecessary expenses.
Greater Control Over Inventory and Branding with Amazon FBM Fulfillment
As we have mentioned a couple of times in this article, FBM gives sellers 100% control over their inventory and branding. Inventory control cuts the risk of the stock running out or overstocking. It enables you to adjust levels based on market/product demand or seasonal fluctuations.
With Amazon FBM fulfillment, you can design custom packaging and include customized branding elements. This works well for those running subscription box businesses. You can also use branded boxes or add thank-you notes, which helps you enhance the customer experience and strengthen brand identity.
The other type of control you have is how you handle customer complaints and returns. With Amazon FBM fulfillment, you set shipping policies, allowing you to tailor delivery options based on your customers’ expectations.
Summing up
Amazon FBM fulfillment empowers sellers to maintain full operational control, offering a balance between efficient product fulfillment and the opportunity to customize their delivery operations. Most sellers that choose Amazon FBM often partner with the best 3PL service providers for faster and more efficient delivery.
