What Is Amazon FBM? A Beginner’s Guide to fulfillment by the merchant

What Does Fulfillment by Merchant (FBM) Mean on Amazon?

Fulfillment by Merchant, or FBM, is Amazon’s way of saying, “You’re in charge.” Unlike FBA, where Amazon handles storage and shipping, FBM puts you at the helm of your inventory, packing, and delivery. You list your products on Amazon, store them whenever suits you, your garage, a rented warehouse, or a third-party logistics (3PL) facility—and ship orders directly to customers when they buy. It’s also known as “seller-fulfilled” because you, the seller, take care of fulfillment.

For third-party sellers, FBM is a hands-on approach. When a customer orders, you pick, pack, and ship the product, plus handle returns and customer questions. This differs from Amazon-fulfilled orders (FBA), where Amazon manages these tasks for a fee. FBM shines for sellers who want to avoid Amazon’s storage costs or keep a tight grip on their operations, offering a flexible way to sell on the world’s biggest marketplace.

How Amazon FBM Works: Step-by-Step Process

Jumping into FBM is simpler than it sounds, but it takes some planning to get it right. Here’s how the process unfolds.

Listing Products with FBM

Head to Amazon’s Seller Central to create your product listings. Set your prices, upload photos, and write descriptions, just like with FBA. Be sure to choose “Merchant Fulfilled” as your fulfillment method during setup.

Managing Inventory and Warehousing

Store your products wherever makes sense in your home, a warehouse, or a 3PL provider. Keep a close eye on stock levels to avoid overselling, which can ding your seller metrics and hurt your account health.

Order Processing, Shipping, and Customer Service

When an order pops up in Seller Central, it’s go-time. Pick and pack the item, print a shipping label, and send it off via a carrier like USPS, UPS, or FedEx. After shipping, stay on top of customer inquiries and process returns promptly to keep buyers happy.

FBM puts you in the driver’s seat, but that means juggling multiple tasks. Staying organized and efficient is key to delivering a great customer experience and keeping your business humming.

Amazon Fulfilled by Merchant vs. Fulfilled by Amazon (FBA)

Choosing between Amazon FBM and FBA is like picking between cooking at home or ordering takeout both get the job done, but the effort and cost differ. Let’s break down the key differences to help you decide.

Key Differences

• Fulfillment: FBM means you handle storage, packing, and shipping. FBA hands those tasks to Amazon’s fulfillment centers.
• Costs: FBM skips Amazon’s storage and fulfillment fees, but you cover shipping and warehousing. FBA charges for storage, picking, packing, and shipping, which can pile up for slow-moving or oversized items. 
• Storage: FBM gives you the freedom to store products anywhere. FBA requires sending inventory to Amazon’s warehouses, where storage limits and fees apply.
• Shipping: FBM delivery times depend on your setup, while FBA offers fast, Prime-eligible shipping that can boost sales.

Pros and Cons

FBM Pros:

• Lower fees for low-margin or bulky products.
• Full control over branding, packaging, and customer interactions.
• Perfect for selling on multiple platforms like eBay or Shopify.
• No Amazon storage caps or long-term fees.

FBM Cons:

• More hands-on work for sellers.
• No automatic Prime eligibility (unless you join Seller Fulfilled Prime).
• Higher responsibility for customer service and returns.

FBA Pros:

• Prime eligibility drives more sales.
• Amazon handles logistics and support, saving time.
• Scalable for high-volume sellers.
• Less daily management.

FBA Cons:

• Higher fees, especially for long-term storage.
• Less control over inventory and branding.
• Strict prep rules for Amazon’s warehouses.

Which Model Suits Which Seller?

• FBM: Ideal for sellers with existing logistics, low-cost or unique products (like handmade or oversized items), or those selling across multiple platforms.
• FBA: Best for beginners, high-volume sellers, or those who want hands-off logistics and Prime visibility.

Many sellers mix both models, using FBA for fast-moving items and FBM for niche products. Your choice hinges on your budget, product type, and how much time you can commit.

Pros of Using Amazon FBM

FBM isn’t for everyone, but it’s a powerhouse for sellers who value control and cost savings. Here’s why it shines.

More Control Over Shipping and Customer Service

Customize packaging with branded inserts or eco-friendly materials. Handle customer inquiries yourself to build loyalty and create a personal touch.

Lower Fees in Certain Categories 

Skip FBA’s storage and fulfillment fees, which can eat into profits for low-margin or bulky items. This keeps costs down for predictable sales.

Flexibility for Multi-Channel Selling

Selling on eBay, Shopify, or your own website? FBM lets you manage inventory from one location, streamlining operations across platforms.

No Dependency on Amazon Storage Limitations 

FBA’s storage caps and long-term fees can be a headache. FBM gives you the freedom to store as much stock as you need, wherever you want.

Cons of Using Amazon FBM

FBM’s flexibility comes with trade-offs. Here’s what to keep in mind.

More Responsibility on the Seller 

You’re on the hook for inventory, shipping, returns, and customer service. Slip-ups can lead to negative feedback or account penalties.

Higher Time and Resource Commitment 

FBM demands hands-on management, which can overwhelm solo sellers or those with large catalogs.

Less Visibility in Prime Listings

FBM products aren’t automatically Prime-eligible, which can hurt sales since many shoppers filter for Prime. Seller Fulfilled Prime (SFP) is an option, but it requires meeting strict two-day shipping standards.

Who Should Use Amazon FBM?

FBM is a perfect match for certain sellers. Here’s who stands to gain the most.

Small Businesses with Unique Shipping Needs

Selling handmade or custom products? FBM lets you maintain quality control and add a personal touch, like custom packaging.

Brands with Existing Logistics Infrastructure 

Companies with warehouses or 3PL partnerships can save big by skipping FBA’s fees.

Sellers with Bulky, Seasonal, or Custom Products

Large items like furniture or seasonal goods (e.g., holiday decor) are often cheaper to fulfill yourself due to FBA’s high storage costs.

Multi-Platform Sellers

Juggling Amazon, eBay, and Shopify? FBM centralizes your inventory, avoiding the hassle of splitting stock across Amazon’s warehouses.

Tools and Best Practices for Managing Fulfillment by Merchant

Running a smooth FBM operation takes the right tools and strategies. Here’s how to nail it.

Inventory and Order Management Software

Tools like ShipStation, EasyShip, and Inventory Lab streamline shipping, track stock, and sync orders across platforms. They cut down on errors and save hours.

Best Practices for Packaging

Use sturdy, branded packaging to protect products and impress customers. Toss in thank-you notes or discount codes to encourage repeat buys.

Returns and Customer Support

Set clear return policies and reply to inquiries within 24 hours. Tools like Zendesk or Amazon’s Buyer-Seller Messaging keep communication organized.

Streamlined Workflow

Batch tasks like label printing or packing to boost efficiency. Monitor your seller metrics (e.g., order defect rate) in Seller Central to stay compliant with Amazon’s standards.

Case Studies: Sellers Succeeding with Amazon FBM

Real-world stories show FBM’s potential. Here are two sellers crushing it.

Niche Handmade Products

Emma, a Portland-based crafter, sells custom leather journals on Amazon using FBM. By fulfilling orders herself, she includes handwritten notes and eco-friendly packaging, earning rave reviews. FBM’s lower fees keep her prices competitive, and she’s hit $8,000 in monthly sales without FBA.

Large Item Sellers with In-House Logistics

A Colorado furniture brand sells sofas and tables via FBM. FBA’s storage fees for oversized items were a profit-killer, so they switched to FBM and partnered with a 3PL for shipping. They’ve cut fulfillment costs by 25% and maintain full brand control.

Key Lessons

Emma leveraged FBM’s flexibility for custom branding, while the furniture brand saved big on costs. Success comes from aligning FBM with your strengths and optimizing logistics.

How to Switch from Amazon FBA to FBM (or Combine Both)

Thinking of switching from FBA to FBM or blending both? Here’s how to make it happen.

When and Why to Switch

Go for FBM if FBA fees are too high, you want more branding control, or you’re selling on multiple platforms. For example, if long-term storage fees are eating profits, FBM can save cash.

Hybrid Model Strategy

Use FBA for fast-moving, Prime-eligible items and FBM for niche or bulky products. A toy seller might use FBA for hot action figures and FBM for oversized playsets, balancing cost and visibility.

Managing Inventory Across Both

Tools like RestockPro or Skubana track stock across FBA and FBM. Reconcile inventory regularly to avoid overselling, and analyze sales to decide which products go where.
Switching takes planning, but it can unlock new efficiencies for your business.

Final Thoughts: Is Amazon FBM Right for Your Business?

Amazon FBM is a powerful choice for sellers who want control, flexibility, and cost savings. It’s a dream for small businesses, multi-platform sellers, or those with unique products, but it demands more hands-on effort than FBA. Weigh the pros (lower fees, branding freedom) against the cons (time commitment, no automatic Prime) to see if FBM fits your goals. With tools like ShipStation and smart workflows, you can make FBM work like a charm. Ready to take charge of your Amazon adventure? Jump into FBM and build a business that’s all your own.

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