What is Amazon FBM?
Fulfillment By Merchant is a method allowing Amazon sellers to manage and track their order fulfillment through products sold on Amazon and fulfilled alongside a logistics partner or through DIY.
The pandemic unveiled the high extent to which Fulfillment By Amazon is susceptible to get affected by unfavorable circumstances.
Particularly, centralizing all of your operations under one roof has become a huge risk to take. While many retailers used to opt for Fulfillment By Amazon, a shift to 3PL fulfillment is being underlined nowadays. It is true that it is kind of pain-free for Amazon to take care of your fulfillment from A to Z; yet, this doesn’t entail that you have hacked the whole process, and the COVID19 is the proof.
The 2020 Breakthrough:
Hello from Fulfillment by Amazon,
We are closely monitoring the developments of COVID-19 and its impact on our customers, selling partners, and employees.
We are seeing increased online shopping, and as a result, some products such as household staples and medical supplies are out of stock. With this in mind, we are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers.
For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors.
This will be in effect today through April 5, 2020, and we will let you know once we resume regular operations. Shipments created before today will be received at fulfillment centers.
You can learn more about this on this Help page. Please note that Selling Partner Support does not have further guidance.
We understand this is a change to your business, and we did not take this decision lightly. We are working around the clock to increase capacity and yesterday announced that we are opening 100,000 new full- and part-time positions in our fulfillment centers across the US.
We appreciate your understanding as we prioritize the above products for our customers.
Thank you for your patience, and for participating in FBA.
Amazon FBM: A Throwback to March 2020
If you had just started running your e-commerce at that time, imagine waking up on the verge of a pandemic, and to the aforementioned email. Amazon FBM has seen the light during the COVID19 outbreak, more specifically in March 2020, when Amazon announced that it is (temporarily and until further notice) no longer possible to ship “unnecessary products” to its warehouses. While prioritizing medical and household supplies shipments at the expanse of others, small merchants were the most affected. An announcement which gave birth to a revolutionary method which is Amazon FBM, a craze in the domain of e-commerce, opening horizons to many retailers all over the world. Let’s dive deeper into what lies behind it!
What are the Proven Benefits of Amazon FBM?
#1 Flexible Margins:
Did you know that 33% of FBM sellers earn more than 25,000$ monthly compared to FBA sellers? In fact, third-party fulfillment allocates landed costs with zero unexpected charges. With FBM, you don’t have to pay long-term storage fees imposed by Amazon’s distribution centers. When choosing your fulfillment partner, you have the opportunity to set the right expectations.
Some questions that you can ask your fulfillment partner are:
- What are the costs for their pick-and-pack?
- What are the costs of local and cross-board fulfillment?
- Is their warehousing system connected to Amazon and other marketplaces?
- How does their return management system work?
These guided questions can assist you throughout your journey when picking the right 3PL partner!
#2 More Ownership and Control:
Simply put, outsourcing your fulfillment is what characterizes Amazon FBM. You are the one who is going to choose whom to partner with. Ultimately, your 3PL partner will help you pick strategically allocated warehouses, and assist you to keep a close eye on your orders fulfillment. With the complexity of the whole supply chain management in which fulfillment takes a large portion, some logistics providers have been striving to develop and integrate user-friendly solutions allowing retailers to manage, track and follow up on their fulfillment in a blink of an eye.
#3 Less Dependency, More Autonomy:
In their article tackling the value of FBM during the pandemic, Forbes points out an important issue that FBM takes off your plate. (They’ve) “found that FBM has fewer administrative responsibilities, less unavoidable losses because of any policy changes Amazon might implement, and more freedom to operate as you desire. Sellers can also stay aware of any financial concerns at every stage of the selling process.” As such, you will gain more autonomy when it comes to choosing your warehouses, your pick-and-pack options, as well as payment methods.
Discover why you need to outsource your international warehousing!
#4 Real-time Listing:
Streamlining your workflow with FBM softens the burden of shipping. Indeed, FBM sellers can list their items which will appear in few minutes on Amazon catalog. In cases when products are to be fulfilled by Amazon, there are a lot of constraints and regulations set by the latter affecting not only your fulfillment process but also your order lead time.
Status Quo:
Back to our main question: Is Amazon FBM the solution you’ve been looking for? We have outlined here 3 scenarios according to which you’ll find the answer:
Scenario 1: If you’re a small merchant, still tiptoeing in e-commerce, then Amazon FBM is most likely the solution you’ve been looking for to ensure higher profit margins.
Scenario 2: A Do-It-Yourself fulfillment can be a quick fix but is far from being a long-term solution, as it requires huge amounts of time and effort from your side.
Scenario 3: If you’re dealing with light products, outsourcing your fulfillment is what you need to avoid Amazon’s high and unexpected costs.
