If you're an online business owner, you've probably heard of FBM – or 'Fulfilled by Merchant' as it's formally known. It's a way of fulfilling Amazon's orders that can save you time and money, but is it right for your business? In this post, we'll take a look at the pros and cons of FBM so you can make an informed decision about whether or not to use it.
What is FBM?
Fulfillment By Merchant (FBM) is a fulfillment method offered by Amazon that allows you to ship your products directly to Amazon's customers. When an order is placed on Amazon, they will contact you, and you will be responsible for shipping the product to the customer.
There are two different ways that you can fulfill orders with FBM:
- You can ship the products yourself from your warehouse.
- You can use Amazon's network of fulfillment centers.
According to the research, approximately 9.5 million Amazon sellers globally, and 73% of Amazon Sellers use the FBA method to sell.
Why Is FBM Important?
FBM is essential because it offers many advantages over other fulfillment methods, such as Amazon FBA.
So, should you use FBM? The answer is that it depends on your business and what you're selling. If you have a lot of products or want complete control over your inventory, then FBM might be a good option for you. However, if you're selling a few products and enjoy the convenience of Amazon taking care of fulfillment, then FBA might be a better choice.
One crucial factor to consider when deciding whether or not to use FBM is your product mix. If you have a lot of products or want complete control over your inventory, then FBM might be a good option for you. However, if you're selling a few products and enjoy the convenience of Amazon taking care of fulfillment, then FBA might be a better choice.
Related: Amazon FBA Pros And Cons: 2021 Guide
Pros & Cons of Amazon FBM
Pros of FBM
There are several advantages to using FBM over other fulfillment methods:
Control over Packaging and Shipping
When using FBM, you can control how your products are packaged and shipped. You can choose the packaging that best suits your products and budget. You also can use different shipping methods, such as priority or overnight shipping, to get your products to customers as quickly as possible.
Another advantage of using FBM is saving you money on storage and shipping costs. If you ship your products yourself, you'll only have to pay for shipping the product to Amazon. And if you use Amazon's fulfillment centers, they will handle all of the packaging and shipping. There are no monthly fees associated with using FBM, so that you can save money each month.
Inventory Track Becomes Easier
When you use FBM, you can take advantage of Amazon's inventory management system. This system makes it easy to track your inventory levels and ensure that you always have the products your customers want in stock.
Can Compete for Buy Box
When you use FBM, you can compete for the Buy Box on Amazon. The Buy Box is the box on a product's detail page where customers can add the item to their cart. Only one seller can win the Buy Box at any time, and it's typically the seller with the lowest price and best customer service. However, if you're using FBM, you can win the Buy Box by offering lower prices or faster shipping times than your competition.
Superior Margin Opportunities
Finally, FBM offers superior margin opportunities when compared to other fulfillment methods. Because you're not paying any monthly fees and have complete control over your inventory, you can keep more profits from each sale. It can be a significant advantage for businesses that are just starting or are looking to increase their margins.
Cons of FBM
Even though there are many advantages to using FBM, there are also some disadvantages that you should be aware of before deciding to use this fulfillment method.
Manage Your Own Inventory
One of the most significant disadvantages of using FBM is that you have to manage your own inventory. You'll need to keep track of what products you have in stock and what needs to be reordered. Additionally, if you offer a large number of products, it can be challenging to keep track of all of your inventory levels.
Responsible for Shipping Products to Customers
Another disadvantage of FBM is that you are responsible for shipping products to customers. This can take up a lot of time, especially if you offer many products. And if you use Amazon's fulfillment centers, you'll need to pay for the cost of shipping each product to them.
More Time Consuming
One of the most significant disadvantages of using FBM is that it can take up time. You'll need to manage your own inventory and ship products to customers independently. This can be time-consuming, especially if you have many orders.
Risk of Damaged Products
Another disadvantage of using FBM is that there is a risk of products being damaged during shipping. If you're not careful, products can get lost or damaged in transit. This can lead to unhappy customers and costly returns.
Other Overhead Costs
In addition to the disadvantages that we've already mentioned, there are also some overhead costs associated with using FBM. For example, you'll need to pay for packaging materials and shipping labels. Additionally, you'll need to have a way to track your inventory levels and manage customer orders.
Finally, if you're using FBM to sell on Amazon, you'll need to be aware of the stiff competition. Many other sellers are also using this fulfillment method, so you'll need to ensure that your prices are competitive and that your customer service is top-notch.
So, is FBM right for your business? The answer to that question depends on a few factors, but overall it's a great way to save time and money – especially if you're already selling on Amazon. If you're not sure whether or not FBM is the right choice for you, be sure to get in touch with our team of experts. Simpl are happy to help you make the most of this powerful fulfillment option!
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