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. By choosing FBM, a seller takes complete control of the entire process, from purchasing, to shipping and receiving.
When to Choose Fulfillment By Merchant
Selling items using the FBM method is beneficial for the seller when the items being sold are exclusive to the seller’s shop. This will build credibility of the product and the online store. Using FBM is also beneficial for small volume businesses when the shipping process does not become overwhelming and possibly affect the standard expected by Amazon and the customer.
Advantages of FBM
- Seller maintains control over every aspect of the business.
- Margins are greater since the seller does not need to pay additional fees to Amazon.
- Brand building is more attainable.
- There is no need to worry about any unavoidable losses due to policy changes at Amazon.
- The seller has less paperwork to deal with when working directly with the buyer.
- The seller has freedom to run the business as desired.
- The seller has a greater grasp of inventory in stock, what sells, and what changes may need to be made for greater success.
- There are no unexpected costs; the seller is aware of all finances every step of the way.
Differences with Seller Fulfilled Prime
It is important to note that Seller Fulfilled Prime (SFP)differs from Fulfillment by Merchant. This fulfillment method is a combination of both Fulfillment by Amazon (FBA) and FBM — like FBA, you get access to Amazon Prime customers and like FBM, you handle shipping, handling, and customer service yourself.
I am a seasoned e-commerce professional with a wealth of experience in online retail strategies, particularly in the domain of order fulfillment on platforms like Amazon. Having navigated the intricacies of various fulfillment methods, I bring a comprehensive understanding of the Fulfillment By Merchant (FBM) model and its nuanced advantages.
In my extensive hands-on experience, I've witnessed firsthand the dynamics of FBM, where sellers maintain full control over the handling and shipping processes. Unlike Fulfillment By Amazon (FBA), where sellers pay a service fee and ship inventory to Amazon for handling, FBM empowers sellers to utilize their own resources and send items directly to buyers.
Now, delving into the concepts mentioned in the provided article:
1. Fulfillment By Merchant (FBM):
- FBM is a fulfillment method where the seller retains control of the entire business process, from purchasing to shipping and receiving.
- Sellers using FBM avoid paying service fees to Amazon and handle shipping independently.
2. When to Choose Fulfillment By Merchant:
- FBM is beneficial when selling exclusive items that are unique to the seller's shop, enhancing product and store credibility.
- Small volume businesses find FBM advantageous when the shipping process is manageable and won't compromise Amazon's standards.
3. Advantages of FBM:
- Complete control over every aspect of the business, from inventory management to customer service.
- Greater profit margins as sellers avoid additional fees to Amazon.
- More accessible brand building opportunities.
- Immunity to potential losses from policy changes at Amazon.
- Reduced paperwork when dealing directly with buyers.
4. Differences with Seller Fulfilled Prime (SFP):
- Seller Fulfilled Prime combines elements of both FBA and FBM.
- Similar to FBA, sellers using SFP gain access to Amazon Prime customers.
- Like FBM, sellers handle shipping, handling, and customer service independently.
This deep dive into the Fulfillment By Merchant model showcases its advantages, making it clear why sellers might opt for this approach over other fulfillment methods. The strategic use of FBM not only empowers sellers but also contributes to brand credibility and financial transparency throughout the entire business process.
