Amazon FBM: A Comprehensive Guide to Fulfilled by Merchant Selling

What is Amazon FBM?

Amazon Fulfilled by Merchant (FBM) is a fulfillment method where sellers list their products on Amazon but manage all aspects of storage, shipping, and customer support themselves or through a third-party fulfillment center. This approach offers several benefits over Fulfilled by Amazon (FBA), including lower storage costs, greater control over inventory and packaging, and the ability to set up multi-channel fulfillment.

Benefits of Amazon FBM

Lower Storage Costs

One of the primary advantages of FBM is the potential for significantly lower storage costs. Sellers can store inventory for free in their own homes or work with companies that offer better pricing compared to Amazon's storage fees. This can lead to substantial savings, especially for products with slower turnover rates or during off-peak seasons.

Greater Inventory Control

Unlike Amazon's FBA program, which may impose restrictions on inventory levels and charge long-term storage fees, FBM allows sellers to store as much or as little inventory as they need. This flexibility can be particularly beneficial for businesses with fluctuating inventory needs or those dealing with seasonal products.

Custom Packaging Options

FBM sellers have the freedom to ship orders in their own custom-branded packaging. This opportunity to create a unique unboxing experience can help businesses stand out from competitors and foster a stronger brand connection with customers.

Multi-Channel Fulfillment

With FBM, sellers can easily set up multi-channel fulfillment, allowing them to ship orders to customers regardless of whether they're buying from Amazon, Walmart, eBay, or even the seller's own Shopify store. This versatility can help businesses expand their reach and increase sales across multiple platforms.

Creating FBM Listings

There are three main ways to create FBM listings on Amazon:

1. Add a brand new product and set it to FBM
2. Change an existing FBA listing to FBM only
3. Create a new FBM offer alongside an existing FBA listing

Adding a New FBM Product

To add a new FBM product:

1. Log in to Seller Central
2. Go to the "Catalog" menu and select "Add Products"
3. Search for your product or select "I'm adding a product not sold on Amazon"
4. Choose your category
5. In the listing creation process, change the fulfillment channel to "I will ship this item myself"
6. Fill out all required information and click "Save and finish"

Converting an FBA Listing to FBM

To change an existing FBA listing to FBM:

1. Go to the "Inventory" menu and select "Manage Inventory"
2. Locate your product and click the "Edit" dropdown menu
3. Select "Change to Merchant Fulfilled"
4. Update any necessary information and save your changes

Creating a Dual FBA/FBM Listing

To create an FBM offer alongside an existing FBA listing:

1. Go to the "Inventory" menu and select "Manage Inventory"
2. Find your FBA product and click the "Edit" dropdown menu
3. Select "Add another condition"
4. Enter a unique SKU number, set your price, and choose the condition
5. Change the fulfillment channel to "Merchant Fulfilled"
6. Enter your available inventory and save the new offer

Setting Up Shipping for FBM Orders

Proper shipping setup is crucial for success as an FBM seller. Here's how to configure your shipping settings:

Update Shipping Settings

1. Navigate to the Settings icon and click "Shipping Settings"
2. Click "General Shipping Settings"
3. Update your address if necessary
4. Edit your order fulfillment settings
5. Set order cutoff times and handling time
6. Configure weekend options if desired

Create a Shipping Template

1. In Shipping Settings, click "Create a new shipping template"
2. Select your address and fulfillment type
3. Choose your shipping services
4. Set up transit times by region
5. Configure shipping rates for different regions and service levels
6. Save your template

Assign Products to Shipping Template

1. Go to "Manage Inventory"
2. Find your product and click the "Edit" dropdown menu
3. Select "Change shipping template"
4. Choose your newly created template and click "Continue"

Fulfilling FBM Orders

When you receive an FBM order, you have two main options for fulfillment:

1. Use Amazon's Buy Shipping feature
2. Ship through your local postal service

Using Amazon's Buy Shipping

Amazon's Buy Shipping feature offers competitive rates and automatically generates tracking numbers. Here's how to use it:

1. Go to the "Orders" menu and select "Manage Orders"
2. Find the unshipped order and click "Buy shipping"
3. Confirm shipping details, including address and ship date
4. Enter package dimensions and weight
5. Choose a shipping service from the available options
6. Select label orientation and declare product value if necessary
7. Click "Buy shipping" to generate and print the shipping label

Shipping Through Local Postal Service

If you prefer to use your local postal service, ensure that you:

1. Pack the order securely
2. Create a shipping label with the correct address
3. Purchase appropriate postage
4. Drop off the package at your local post office or schedule a pickup
5. Enter the tracking number in your Amazon seller account

Handling FBM Returns

As an FBM seller, you're responsible for managing your own returns. Here's what you need to know:

Return Policies

1. Adhere to Amazon's minimum 30-day return window
2. Accept returns within this window
3. Provide buyers with prepaid return labels

Setting Up Return Preferences

1. Go to the "Orders" menu and select "Manage Returns"
2. Click "Edit Return Settings"
3. Enable email notifications for return requests
4. Set up free returns if desired
5. Configure return program settings, including return window and eligible reasons
6. Confirm your return address

Processing Returns

When you receive a return request:

1. Review the request details
2. Choose to either contact the buyer or issue a refund
3. If issuing a refund, decide whether to include shipping costs or charge a restocking fee
4. Submit the refund and provide return instructions to the customer

Managing FBM Inventory

Effective inventory management is crucial for FBM sellers. Consider the following strategies:

Storage Solutions

1. Use spare rooms in your home, such as an office or garage
2. Rent a small local storage unit for additional space
3. Organize inventory systematically for easy access and tracking

Inventory Tracking

Invest in an inventory management tool to help you:

1. Track available inventory levels
2. Monitor product costs and profitability
3. Set reorder points to avoid stockouts
4. Forecast inventory needs based on sales trends

One recommended tool is the Jungle Scout Inventory Manager, which integrates directly with your Amazon seller account and provides valuable insights into your inventory status and profitability.

Conclusion

Amazon's Fulfilled by Merchant program offers sellers greater control over their operations and the potential for increased profitability. By mastering the processes of listing creation, shipping setup, order fulfillment, returns management, and inventory control, FBM sellers can build successful businesses on the Amazon platform while maintaining flexibility and reducing costs.

While FBM requires more hands-on management than FBA, the benefits of lower storage costs, custom branding opportunities, and multi-channel fulfillment capabilities make it an attractive option for many sellers. By following the guidelines outlined in this comprehensive guide, you'll be well-equipped to navigate the world of Amazon FBM and grow your e-commerce business.

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