Amazon has proven to be one of the most complex and competitive marketplaces in the world. Sellers navigating the marketplace have to find ways to not only compete against millions of other retailers, but also to find ways to manage their fulfillment processes. Amazon offers two different vessels for this: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).
Fulfilled By Merchant is when you list a product on Amazon and elect to ship products to each buyer by yourself.
FBM is better for exclusive products, small volume products or products with lower profit margins.
Freedom to run the business exactly as seller chooses. And more control over your inventory. You can expand your Amazon business without worrying about increase in the fulfillment fees. Since you fulfill products by yourself you’ll also have a better knowledge of the current status of your inventory stocks.
Since you store your inventory in the warehouses chosen by you, you have a complete control on the inventory and can use the same inventory stocks to run an offline retail store too.
No unexpected costs. You get a better cut from the profit margins. You can save on fulfillment fees, find the best and a cheaper choice for your warehouse, reduce on the shipment charges. Especially when it comes to products large dimensional products with lesser profit margins.
An FBM seller has to interact with his customers directly. You get a better understanding of your customer’s requirements and complaints since you are directly involved with them. Sometimes you even get valuable ideas and insights from interaction with them.
Amazon changes its fulfillment pricings and policies often. It also imposes a Long Term storage fees for products that are in the Amazon repository for a long time. An FBM seller does not these worries.
An Amazon FBA seller has two unavoidable headaches. One is the Amazon’s taxations for fulfillment and the other is loads of paperwork. An FBM seller, is free from both these issues
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