Amazon FBM Warehouse

Amazon fbm Fulfilment by Merchant  refers to a method of selling where a seller lists products on Amazon, but manages storage, shipping, and customer support in-house or through a third party. Merchant Fulfilled Network (MFN) is Amazon’s terminology for FBM.Fulfillment By Merchant (FBM) is when the seller is in control of his entire handling and shipping process. Instead of paying a service fee and shipping inventory to Amazon to handle, the seller uses his or her own resources and sends the items directly to the buyer.All other factors being equal, FBA offers will beat standard FBM offers for the Buy Box.

 Amazon FBM Warehouse

Amazon FBM Warehouses stand as a cornerstone for e-commerce sellers in 2023. These strategically located storage hubs empower sellers to retain greater control over their inventory, order fulfillment, and customer experience. By choosing FBM, sellers can provide swift shipping, maintain their brand identity, and offer unique, personalized packaging.

Amazon FBM Advantages 

FBM sellers can improve their odds of winning the Buy Box by offering Seller Fulfilled Prime. Just note that FBA will still have a slight edge over SFP when it comes to the Buy Box, but SFP is much better than standard FBM.Amazon offers a subscription fee for the Pro FBM service that costs $39.99 per month. By subscribing to this plan, you can waive additional fees when a product is sold.Amazon deducts a referral fee each time a product unit is sold. The referral fee is a percentage of the total sales price and is usually 15% in most product categories; however, it differs in a few categories, going as low as 6% and high as 45% for Amazon Device AccessoriesJungle Scout’s data indicates that 34% of Amazon sellers sell both FBA and FBM. 

If you have a large variety of products, you may consider using both to gain the benefits from the two.When you’re FBM, you’re not eligible for the Amazon Prime badge, which is tied directly to Amazon’s organic ranking algorithm.FBM gives merchants greater control and predictability over their inventory and fulfilment operations. Sellers with expertise in logistics and efficient operations can improve their overall margins. Sellers also have greater control over the customer experience when it comes to customer service.Fulfillment By Merchant (FBM) is when the seller is in control of his entire handling and shipping process. Instead of paying a service fee and shipping inventory to Amazon to handle, the seller uses his or her own resources and sends the items directly to the buyer.In addition to Fulfilment by Merchant, there is a new, rapidly growing MFN fulfilment method — Seller Fulfilled Prime (SFP). When analysing FBA vs. merchant fulfilled via SFP, these two fulfilment methods are regarded by Amazon to have the same customer-first performance metrics and require sellers to maintain the Prime promise (ability to ship to customers with free, two-day delivery, whether it’s from an FBA location or a seller’s own warehouse). SFP allows qualified Amazon sellers with Professional seller accounts to display the Amazon Prime badge on orders fulfilled via their own warehouse or third-party logistics providers.

As an FBM seller, you have greater control over your shipping rates. Since the seller is purchasing the shipping from UPS or FedEx directly, increased volumes and discounts can translate into more profit. Many shippers can utilise ground or home delivery services to deliver packages within 2 days, but buyers who live further distances will require shipment by express.

Using UPS published rates would not work for the smaller seller fulfilled prime shipper because shipping costs would eat up any profit. But if you have a larger volume discount with FedEx or UPS, this could work. With proper help and data, UPS and FedEx will lower your 2nd-day air discounts to make the rate more competitive with ground pricing. Amazon FBA vs. Amazon FBM decisions must heavily consider your shipping costs and efficiency.

One crucial factor to consider when deciding whether or not to use FBM is your product mix. If you have a lot of products or want complete control over your inventory, then FBM might be a good option for you. However, if you’re selling a few products and enjoy the convenience of Amazon taking care of fulfilment, then FBA might be a better choice.

Amazon FBM Disadvantages

One of the most significant disadvantages of using FBM is that you have to manage your own inventory. You’ll need to keep track of what products you have in stock and what needs to be reordered. Additionally, if you offer a large number of products, it can be challenging to keep track of all of your inventory levels.

One of the most significant disadvantages of using FBM is that it can take up time. You’ll need to manage your own inventory and ship products to customers independently. This can be time-consuming, especially if you have many orders.Finally, if you’re using FBM to sell on Amazon, you’ll need to be aware of the stiff competition. Many other sellers are also using this fulfilment method, so you’ll need to ensure that your prices are competitive and that your customer service is top-notch.

During the recent COVID-19 pandemic, some Amazon FBA sellers were disadvantaged for several months because Amazon stopped all shipping via FBA for goods that were deemed non-essential.

FBM sellers, however, were able to continue with sales and ship without issue because the fulfilment of orders was entirely under their control. Should a similar situation occur, Amazon FBM sellers’ businesses will be largely unaffected.