One of the most important decisions for any online retailer working with Amazon, is to choose one of the logistics models that Amazon offers. A well-thought-out choice guarantees better sales results and more efficient business development.
The Amazon platform has two logistics options to choose from: Fulfillment by Merchant and Fulfillment by Amazon.
Today we will focus a bit more about the first one, i.e. FBM Fulfillment by Merchant. Let’s start by explaining what this sales model is all about.
What is Amazon FBM?
It is a sales model in which the seller is fully responsible for the entire sales process on the platform.
What do sales look like in the FBM model- what are the seller’s responsibilities?
- Storage – organizing own storage space/warehouse
- Finding a shipment partner- the seller needs to establish cooperation with shipping companies on their own
- Sales of products – order fulfillment and handling, including customer service and shipping is on the seller
- Complaints and returns handling – seller is fully responsible for the entire complaint process and returns handling
This option is most likely to be chosen by new sellers who are not yet convinced of the FBA logistics model, where Amazon is responsible for the entire logistics.
Freedom is the main strength of the FBM model.
Main advantages of this sales model include:
- Full control over the sales process,
- Building an independent brand,
- Less formalities,
- Less losses due to changes in Amazon’s rules,
- Control over your shipping rates,
- More control over the inventory of your goods, e.g. best-before dates.
What are the costs of the FBM model?
There are two subscription plans available – the Professional plan is a fixed monthly fee at 165.91 PLN (excluding VAT), regardless of how many goods you sell. The other payment system is the seller is charged separately for each product purchased from them on Amazon. Additionally, you will also come across a referral and shipping fees.
FBM is a perfect solution for:
- Entrepreneurs operating on a smaller scale, with a rather narrow offer,
- Companies that sell luxury, exclusive or unique goods,
- Those who wish to use or are already using the Seller Fulfilled Prime (SFP) model.
Seller Fulfilled Prime – what is it?
SFP allows third-party sellers to ship Amazon Prime purchases to their customers under a 2-day SLA agreement from their own warehouse. However, before this option becomes available for a seller, they need to meet relatively high requirements imposed by Amazon.
What does the choice of FBM give you?
The biggest perks of choosing FBM are independence and autonomy to run your own business on Amazon. You, as a seller, decide about how your sales develop on the platform, and you can build your brand in accordance with your own vision.
If you sell unique and luxurious products, you have the resources to run the logistics process, customer service and returns handlings, and you also have an available storage space, then the FMB model is what you’re looking for.
If you are still not entirely convinced which sales model will work best for you, our job is to help you make that decision.
