Amazon FBM Model

FBM" in the Amazon context stands for "Fulfillment by Merchant." This is a model where the seller takes full responsibility for fulfilling customer orders, including storing, picking, packing, and shipping the products.

In the FBM model, sellers can list their products on Amazon, but they handle the entire order fulfillment process themselves. This means that they are responsible for maintaining inventory levels, packaging products, and shipping them to customers.

FBM can be a good option for sellers who want more control over the fulfillment process, want to maintain their own brand, or who have unique or customized products that require special handling. However, it can also be more challenging than using Amazon's fulfillment services, as sellers need to ensure that they have enough inventory on hand and are able to ship orders quickly and efficiently.

The FBM model on Amazon is one of several fulfillment options available to sellers on the platform. The other two main options are Fulfillment by Amazon (FBA) and Seller Fulfilled Prime (SFP).

With FBM, the seller is responsible for the entire fulfillment process. This includes storing their inventory in their own warehouse or other storage facility, picking and packing orders when they are received, and shipping them out to customers using their own shipping carriers. Because the seller is handling the entire process, they have more control over the customer experience, including packaging, shipping speed, and even including personalized notes or promotional materials in their packages.

However, FBM also requires a significant amount of time and resources on the part of the seller. They need to manage their inventory levels carefully to ensure that they always have enough products on hand to fulfill orders, and they need to have a reliable shipping system in place to get their products to customers quickly and efficiently. They also need to handle any customer service issues that may arise, such as returns or refunds.

One potential benefit of using the FBM model is that it can be more cost-effective for sellers than using FBA, which charges fees for storage, picking, packing, and shipping services. FBM can also be a good option for sellers who have unique or customized products that require special handling, or who want to maintain more control over their brand and customer experience.

That being said, FBM is not the best choice for all sellers. It requires a significant amount of time and effort to manage, and it can be challenging to scale a business while handling all aspects of the fulfillment process. For many sellers, using FBA or SFP may be a better option, as these services offer more support and can help streamline the fulfillment process.

Shipping: As an FBM seller, you will be responsible for shipping the products to your customers. Amazon provides a set of shipping guidelines that sellers need to follow, such as shipping within two business days and providing tracking information for every order. The shipping cost is also borne by the seller, and they have the option to choose their own shipping carrier or use Amazon's Buy Shipping service.

Inventory management: One of the main challenges of FBM is managing inventory. As an FBM seller, you will need to keep track of your inventory levels and ensure that you have enough stock to fulfill customer orders. Amazon provides tools like the Inventory Dashboard and Restock Inventory tool to help sellers manage their inventory effectively.

Customer service: FBM sellers are also responsible for handling customer service issues like returns, refunds, and exchanges. Amazon provides guidelines for handling these issues, and sellers need to ensure that they respond to customer inquiries within 24 hours. They also need to have a system in place to process returns and issue refunds promptly.

Pricing: FBM sellers have more control over their pricing than FBA sellers. They can set their own prices and adjust them as needed to stay competitive. However, they also need to factor in the cost of shipping and handling when setting their prices.

Amazon Prime: FBM sellers can also enroll in Amazon Prime, which gives their products the Prime badge and offers free two-day shipping to Prime members. However, to qualify for Prime, sellers need to meet certain performance metrics, such as having a cancellation rate of less than 1% and an on-time delivery rate of at least 97%.