To thrive in the ever-changing landscape of e-commerce, it’s crucial to outshine competitors and deliver a seamless and stress-free customer journey. To accomplish key milestones, you need to take your Amazon FBA business to the next level. If you’ve exhausted your opportunities as an Amazon merchant, it’s time to explore alternative fulfillment methods. Don’t worry; you don’t have to completely give up your Amazon seller account just yet. If FBA just isn’t doing the trick, it’s time to investigate Amazon FBM fulfillment. In this blog post, we’ll delve into the benefits of using Amazon FBM and how it will revolutionize your e-commerce enterprise.
Understanding Amazon Fulfillment by Merchant (FBM)
Before delving into the benefits, let’s first understand what Amazon Fulfillment by Merchant entails (and before you ask… Yes. You can keep your Prime badge if you do it right). Unlike Amazon’s Fulfillment by Amazon (FBA) program, where Amazon handles storage, packing, and shipping, FBM puts the responsibility for these processes on the seller. As an FBM seller, you have direct control over your inventory and shipping operations, giving you greater flexibility and freedom in managing your business.
Key Distinctions from FBA:
- Inventory Storage: FBA sellers send their products to Amazon fulfillment centers, and Amazon stores and manages the inventory. In contrast, FBM sellers are responsible for storing their inventory, either in their own warehouse or using third-party storage facilities.
- Packing and Shipping: In the FBA model, Amazon takes care of packing and fulfilling customer orders. In contrast, FBM sellers handle the packing and shipping process themselves, choosing their preferred carriers and shipping methods. An ecommerce seller that uses FBM must track shipments from their own fulfillment centers.
- Shipping Fees: With FBA, sellers pay Amazon for storage and fulfillment services, including shipping fees. FBM sellers, on the other hand, are only responsible for the shipping fees they incur with their chosen carriers.
The Advantages of Amazon Fulfillment by Merchant (FBM)
Reduced Shipping Costs and Overhead
E-commerce merchants benefit greatly from using Amazon Fulfillment by Merchant (FBM), as it offers cost-effectiveness and reduces overhead expenses. Let’s delve deeper into these advantages:
Avoiding Storage and Fulfillment Fees
One of the primary cost-saving benefits of Amazon FBM is the ability to bypass storage and fulfillment fees charged by Amazon for their Fulfillment by Amazon (FBA) service. With FBA, sellers must send their inventory to Amazon’s fulfillment centers, and Amazon takes care of storage, picking, packing, and shipping. However, this convenience comes with associated fees, including storage fees based on the volume of inventory stored and FBA fees for each order handled by Amazon.
By choosing FBM, online retailers maintain more control of their inventory and handle fulfillment themselves, eliminating the need to pay Amazon’s storage and fulfillment fees. This results in significant cost savings, especially for sellers with lower order volumes or unique products that may not be well-suited for FBA (think cosmetics and electronics).
Scaling Fulfillment Operations at Your Own Pace
Amazon FBM also allows sellers to scale their fulfillment operations at a pace that aligns with their business growth. Unlike FBA, where sellers may need to invest in larger quantities of inventory to meet Amazon’s storage requirements, FBM sellers have the flexibility to manage their inventory levels based on demand.
For smaller or seasonal sellers, FBM offers the advantage of avoiding the need to maintain high inventory levels throughout the year. This approach helps reduce carrying costs and prevent excess inventory that leads to write-offs or obsolescence.
Control Over Packaging and Shipping Costs
With FBM, sellers have direct control over the packaging and shipping process. This control enables them to negotiate shipping rates with carriers, choose the most cost-effective shipping methods, and explore packaging options that align with their budget and brand identity.
Amazon sellers that use FBM leverage their shipping volume to negotiate better shipping rates with carriers, reducing shipping costs per order. Additionally, customizing packaging materials to suit the specific needs of their products allows sellers to optimize packaging costs, all while enhancing the unboxing experience for customers.
Competitive Pricing and Improved Profit Margins
By reducing fulfillment costs, FBM enables sellers to price their products more competitively in the marketplace. Lower pricing attracts price-conscious customers, driving sales and increasing market share.
Improved profit margins resulting from reduced fulfillment expenses can be reinvested in marketing, product development, or customer service, contributing to overall business growth and sustainability.
Faster Shipping and Enhanced Customer Experience
With FBM, you have the opportunity to leverage local fulfillment centers, reducing shipping times and enhancing the overall customer experience. Quicker deliveries lead to positive customer reviews and increased chances of repeat business. Here are just a few key aspects and benefits of switching to FBM when it comes to speed of delivery and increasing customer satisfaction:
Leveraging Local Fulfillment Centers for Quicker Deliveries
With Amazon FBM, sellers have the flexibility to strategically position their inventory in various locations, allowing them to tap into Amazon’s vast network of local fulfillment centers. This strategic placement enables sellers to reduce shipping distances and transit times, resulting in faster deliveries to customers.
By shipping products from fulfillment centers that are geographically closer to the customers, FBM sellers offer expedited shipping options and even provide same-day or next-day delivery for eligible orders. Quicker deliveries enhance the overall shopping experience, meet customer expectations for fast shipping, and lead to higher customer satisfaction and positive reviews.
Real-Time Order Processing
With FBM, sellers manage their own order processing, giving them real-time visibility into incoming orders. This direct control enables sellers to process orders promptly without relying on third-party logistics. By promptly acknowledging and processing orders, sellers provide accurate shipping estimates to customers, enhancing transparency and setting clear expectations regarding delivery timelines.
Meeting Peak Season Demands
During peak seasons, such as holidays or promotional events, e-commerce businesses often experience a surge in orders. With FBM, sellers have the flexibility to adapt to peak demands by efficiently managing their inventory and fulfillment processes.
By leveraging FBM’s real-time order processing and direct control over inventory, sellers scale their operations in response to increased order volumes. This adaptability allows them to meet customer demands, fulfill orders quickly, and maintain high customer satisfaction during peak seasons.
Building Trust and Loyalty
Faster shipping and reliable order fulfillment contribute to building trust and fostering customer loyalty. Customers appreciate timely deliveries, as it demonstrates the seller’s commitment to providing an excellent shopping experience.
Positive experiences with quick deliveries lead to repeat purchases and word-of-mouth referrals, expanding the seller’s customer base. Satisfied customers are more likely to leave positive reviews and recommendations, further enhancing the seller’s reputation on the Amazon marketplace.
How to Ensure Your Fulfillment Process is Ready to Cope with Supply Chain Disruptions
The global supply chain is prone to disruptions, as seen in recent times. FBM offers sellers the advantage of diversifying their fulfillment strategies. By not relying solely on Amazon’s fulfillment centers, you can explore alternative shipping methods and channels to ensure that your customers receive their orders on time, even during unforeseen challenges.
Coping with supply chain disruptions is a critical aspect of e-commerce success, and Amazon Fulfillment by Merchant (FBM) provides e-commerce merchants with valuable tools and strategies to navigate these challenges. Here’s a closer look at how FBM helps sellers manage supply chain disruptions effectively:
Diversifying Fulfillment Strategies
One of the most significant advantages of Amazon FBM is the ability to diversify fulfillment strategies. Unlike relying solely on Amazon’s Fulfillment by Amazon (FBA) service, FBM sellers can explore alternative fulfillment options. For example, sellers may maintain inventory in multiple locations, utilize third-party logistics providers, or even fulfill orders from their own warehouses.
By diversifying fulfillment strategies, sellers mitigate the impact of supply chain disruptions caused by factors such as natural disasters, shipping delays, or inventory shortages. If one fulfillment method encounters challenges, sellers can quickly switch to an alternative method to ensure continuity in order processing and delivery.
Ensuring Seamless Customer Service
During supply chain disruptions, maintaining excellent customer service is crucial for preserving customer satisfaction and loyalty. With Amazon FBM, sellers retain direct control over customer interactions and support. This hands-on approach allows sellers to provide timely updates to customers about potential delays, offer alternative shipping options, or address any concerns proactively.
Open and transparent communication with customers builds trust and reassures them that their orders are being managed efficiently. By promptly addressing any issues that arise during supply chain disruptions, sellers minimize the negative impact on customer experience and maintain positive seller ratings.
Implementing Contingency Plans
FBM sellers have the flexibility to develop and implement contingency plans in preparation for potential supply chain disruptions. These plans might include securing additional inventory from different suppliers, establishing backup fulfillment centers, or collaborating with multiple carriers to ensure continued order deliveries.
Having contingency plans in place allows sellers to respond quickly to unexpected disruptions, reducing downtime and minimizing the risk of order cancellations. Being proactive in planning for potential challenges helps sellers to navigate supply chain disruptions with greater resilience.
Tips for Embracing Amazon Fulfillment by Merchant (FBM)
Evaluate Readiness for Amazon FBM Adoption
Assess your business’s capability to handle fulfillment independently. This includes considering your inventory management, shipping processes, and customer support capabilities. Here are key factors to consider when evaluating your readiness for FBM adoption:
- Inventory Management Capabilities:
Evaluate your current inventory management practices. FBM requires sellers to handle their inventory and fulfillment processes independently. Ensure that you have robust inventory tracking systems in place to monitor stock levels accurately. Assess your ability to maintain adequate inventory levels to meet customer demand. Efficient inventory management is essential to avoid stockouts, backorders, and potential delays in order fulfillment.
- Shipping and Fulfillment Efficiency:
Review your shipping and fulfillment processes to gauge efficiency. Assess how quickly you process and ship orders once they are received. Timely order processing is vital to meeting customer expectations for fast delivery. Consider your ability to handle increased order volumes during peak seasons without compromising on shipping times. Efficient fulfillment operations are crucial to ensuring a positive customer experience.
- Customer Support Capacity:
Examine your customer support capabilities. FBM requires direct customer interaction, as sellers handle customer inquiries, order updates, and returns themselves. Ensure you have the resources and infrastructure to provide timely and effective customer support. Adequate customer service is essential for maintaining high customer satisfaction and positive seller feedback, which are critical for success on the Amazon marketplace.
- Financial Preparedness:
Assess your financial position to determine whether you have the necessary resources to support FBM adoption. While FBM offers cost-saving advantages over FBA, it may require upfront investments in areas such as packaging, shipping materials, and customer support. Review your financial projections to understand how FBM will impact your bottom line and cash flow. Ensure that you have a clear understanding of potential costs and savings associated with FBM.
- Compliance with Amazon Policies:
Review Amazon’s FBM policies and guidelines to ensure that your business complies with the platform’s requirements. Familiarize yourself with FBM-specific rules and regulations to avoid any potential violations that could lead to account suspension or other penalties.
How Amazon Sellers Win with FBM
- Optimize Your Inventory Management
Efficient inventory management is a fundamental pillar of success when adopting Amazon Fulfillment by Merchant (FBM). By implementing the inventory management strategies, you ensure seamless inventory flow and enhance your customers’ overall shopping experience.
To start, invest in robust inventory tracking systems that provide real-time visibility into your stock levels. These systems enable you to monitor your inventory accurately, identify trends, and make data-driven decisions. With a clear view of your inventory, you avoid stockouts, where popular items are unavailable, and prevent overselling, where you sell more products than you have in stock.
Moreover, leverage forecasting tools to predict future demand based on historical sales data and market trends. Accurate demand forecasting empowers you to proactively plan inventory replenishment and avoid being caught off-guard during peak seasons or unexpected sales spikes.
- Focus on Packaging and Branding
One of the advantages of Amazon FBM is the freedom to create a unique and memorable unboxing experience for your customers. Paying attention to packaging and branding leaves a lasting impression and fosters brand loyalty.
Choose packaging materials that reflect the quality and value of your products. Sturdy and well-designed packaging not only protects your items during transit but also gives customers a sense of receiving a premium product. Use your packaging as a canvas to showcase your brand’s logo, colors, and messaging. Including branding elements on the packaging adds a personal touch and helps customers remember your brand long after they receive their orders.
- Streamline Order Processing
Fast and accurate order processing is vital for meeting customer expectations and ensuring customer satisfaction. By streamlining your order processing, you improve efficiency and reduce the likelihood of errors, leading to a smoother fulfillment process.
Implement automation tools to manage incoming orders swiftly and accurately. Automation reduces manual tasks and minimizes the risk of human errors during order handling. Integrate your inventory management system with your e-commerce platform to ensure your product availability is updated in real-time. This integration prevents overselling and ensures that customers only purchase items in stock.
Amazon Fulfillment by Merchant (FBM) presents e-commerce merchants with a powerful opportunity to take control of their fulfillment processes and provide an exceptional customer experience. By embracing FBM, businesses optimize costs, offer faster shipping, and build resilience in the face of supply chain disruptions. As the e-commerce landscape continues to evolve, leveraging Amazon FBM is the key to unlocking your business’s full potential and achieving e-commerce success.
Empowering Amazon FBA Sellers with Standvast: Unleash Your E-commerce Potential
For Amazon FBA sellers seeking to elevate their e-commerce success, Standvast offers a game-changing choice that opens up new avenues of growth and efficiency. Let us now discuss how Standvast can enhance your current Amazon FBM fulfillment strategy and help you succeed in the highly competitive e-commerce industry, as we have already analyzed the benefits of Amazon Fulfillment by Merchant (FBM).
Simplify and Maintain Control of New Channels to Market
Expanding your reach beyond Amazon’s platform presents a daunting task. However, with Standvast as your fulfillment partner, you gain access to a comprehensive suite of fulfillment services that simplify the process of tapping into new channels and selling platforms. Beyond the initial exploration process, Standvast empowers you to maintain full control over your sales and channels. Whether you’re selling on Amazon, your website, or other marketplaces, Standvast enables you to manage all your channels from a centralized platform. This level of control ensures consistency and exceptional customer experiences across all touchpoints.
Adapt in Real-Time to Changing Conditions
E-commerce is ever-evolving, and selling conditions fluctuate rapidly. With Standvast, you no longer have to conform to rigid fulfillment structures. Whether you face changes in inventory levels, variations in Amazon FBM policies, or shifting market demands, our flexible fulfillment center network and cutting-edge technology services enable you to adapt in near real-time. Stay agile, respond swiftly, and thrive in a dynamic marketplace.
Empower Growth and Value Creation
By partnering with Standvast, you break free from complete dependency on a single fulfillment provider. This liberation empowers you to pursue further growth and value creation while still leveraging Amazon’s services where they add value. Use Amazon strategically and capitalize on Standvast’s capabilities to achieve cost savings, unlock new revenue sources, and optimize your fulfillment operations.
Create a Best-in-Class Supply Chain
Standvast helps you build a best-in-class supply chain that works seamlessly with Amazon FBM and other service providers. Our end-to-end fulfillment services, combined with innovative technology and industry expertise, elevate your fulfillment capabilities to exceptional levels. Unleash the true potential of your organization by delivering on customer expectations and providing an unparalleled shopping experience.
Take Charge of Your E-commerce Destiny
We at Standvast strongly believe in empowering you to make strategic decisions that shape the future of your e-commerce business. Our solutions are highly flexible and customizable, giving you complete control over how, where, and when you fulfill orders. With Standvast, you have the freedom to optimize your fulfillment processes and unlock the true value of your organization.
By partnering with Amazon FBA, Standvast offers you a powerful combination that can elevate your e-commerce potential. With this choice, you can seize new opportunities and delight your customers across all channels. By leveraging the strengths of both services, you can confidently steer your e-commerce business towards unparalleled success in the dynamic world of online retail