FBA vs. FBM is probably a debate you haven’t considered since you first started selling on Amazon. However, with COVID-19 causing severe FBA restrictions and increasing customer demand, it’s time to reconsider your Amazon fulfillment method and think about FBM.
To help you make the right decision in the current environment, here are 8 reasons why Amazon merchants should use FBM.
What is FBM?
FBM stands for Fulfillment By Merchant and involves handling the fulfillment of your Amazon orders yourself, including:
- Storing inventory
- Picking and packaging items
- Shipping orders quickly
- Handling customer service queries, returns, and exchanges
This is in contrast to Amazon FBA, who normally handles all of this for you. However, FBM doesn’t have to involve any extra storage space, work, or employees if you decide to outsource.
There are two methods of running FBM: In-house and outsourced.
1. In-house FBM
In-house FBM is when you fulfill customer orders yourself, using your own space, staff, materials, and shipping carrier.
2. Outsourced FBM
Outsourced FBM is when you use an outsourced fulfillment partner to handle fulfillment for you – much like Amazon FBA.
8 Reasons You Should Try FBM
Regardless of which FBM method you prefer, stepping away from Amazon FBA is a big decision and commitment. To make it a little easier, let’s look at the top 8 reasons why Amazon merchants should use FBM right now.
1. Faster shipping
Amazon FBA is usually known for offering the quickest shipping speeds around, but not today. During COVID-19, Amazon is operating a restricted Prime delivery service, with most shipping estimates extended to one month.
This means that FBM outsourced fulfillment providers and shipping carriers not reliant on Amazon’s fulfillment network, can maintain 2-day delivery speeds, and deliver items quicker than FBA can.
2. Product expansion
FBM may be the only way you can restock inventory or introduce new product lines to meet changing customer needs during the COVID-19 outbreak.
Currently, Amazon FBA is restricting inbound shipments of non-essential items falling outside of the following categories:
- Baby products
- Health and household (including personal-care appliances)
- Beauty and personal care
- Industrial and scientific
- Pet supplies
Shipments of such items are either temporarily halted or accepted on a case-by-case basis, with consideration being given to:
- High-demand products that customers need now;
- Current inventory levels and inventory in transit;
- Fulfillment center capacity; and
- Amazon’s ability to adhere to the latest health guidelines.
This is an essential consideration for any Amazon seller running low on stock or experiencing a reduction in orders during the pandemic. By sticking with FBA, your products may fall out of stock, and you may be unable to sell new items to counteract any decline in sales.
FBM gives you more control over your fulfillment practices, including where you store inventory, what shipping speeds to offer, and which carriers you use to fulfill new orders.
This control also makes it easier to source products for Amazon. With no high fees for large items, heavy items, or long-term storage fees, you can source the products you want to sell, rather than the products best suited to FBA.
4. Customer service
FBM puts you in charge of your Amazon customer service. This is a great opportunity to improve the customer journey and resolve complaints quickly and sufficiently – especially when Amazon is clearly feeling the pressure of the times.
5. Multichannel selling
Fulfilling orders on multiple sales channels through FBM is not only possible, but it can be easier and cheaper than multichannel FBA.
FBM fulfillment providers and shipping carriers don’t have the same high multichannel fulfillment fees that Amazon FBA has. In fact, by unifying your ecommerce fulfillment, you can save both time and money for the benefit of your business and customers.
Also, with FBA’s current delivery delays, FBM may be the only way to maintain fast shipping speeds for your multichannel selling strategy.
Speaking of money, FBM gives you more scope to reduce your fulfillment costs, especially when sales are low, and money is tight.
If you’re leaning towards in-house FBM, you can source warehousing space, packaging materials, inventory management software, and shipping carriers to suit your budget.
If you’re considering an outsourced FBM provider, you can partner with a solution that offers all-inclusive fulfillment fees, with no added costs, long-term contracts, or hidden fees.
If merchants were already approved for Seller Fulfilled Prime, they can maintain their Prime badging while fulfilling themselves.
All you need to do is meet the fast shipping criteria yourself or use an Amazon third-party fulfillment provider. Once you have achieved the metrics for Amazon Prime, you can expand to additional fast shipping programs and capture any customers looking for an Amazon alternative.
8. Hands-on or off
Finally, FBM is as hands-on or hands-off as you want it to be.
If you’d like to take this as an opportunity to build your own fulfillment operation and understand the logistics of delivering items at speed, you can do so.
If you’re eager to step away from Amazon FBA, but you’re not ready or keen to do it all yourself, you can use an outsourced fulfillment partner to help.
And, if FBM isn’t quite right for you, you can always go back to FBA once the pandemic is over and the restrictions are relaxed.
The COVID-19 pandemic and FBA restrictions have turned Fulfillment By Merchant from a popular choice into a necessity for many Amazon sellers.
If you want to retain delivery speeds and customers over the next few months, FBM should be a serious consideration for your business. It doesn’t have to be scary, it doesn’t have to be long-term, and it doesn’t even have to be in-house.
About the Author: This is a guest post from Michael Krakaris. Michael is one of Forbes’ 30 Under 30 and the co-founder of Deliverr. Deliverr provides fast and affordable fulfillment for your Shopify, Walmart, Amazon, eBay, and Wish stores,helping to boost sales through programs like 2-day delivery for Shopify, Walmart 2-day delivery, eBay Fast ‘N’ Free, and Wish Express.