When the Amazon FBM distribution program pays off
Are you wondering whether to rely on the FBM distribution program to sell on Amazon? Review all its advantages and disadvantages. It's easy to decide if Amazon FBM will pay off.
Amazon is one of the most competitive markets in the world. When you sell on Amazon, you have to look for ways to deal with hundreds of thousands of other retailers.
Therefore, it is very important to think well about what distribution program you will use. On the blog, you can also meet Amazon FBA and Pan-European FBA. Now let's review Amazon FBA, Fulfillment by Merchant.
Amazon FBM: Delivering products to customers on your own
Fulfilled by Merchant is a program where, as a dealer, you deliver products on Amazon to each buyer yourself. You are therefore fully responsible for fulfilling your orders.
Although FBM is a relatively advantageous method primarily for products with lower margins, it is often neglected due to premium FBA services.
The need to find a reliable and efficient carrier
While the Amazon FBM distribution program is relatively less expensive, you have to take into account its other aspects: It is up to you what carrier you will find, how you pack your shipments, and how much shipping will cost you.
Imagine having to ship several products daily across Europe. Who will take care of the packaging? Can one carrier handle it all?
Consider all the circumstances and calculate to what extent Amazon FBM is more advantageous than FBA.
Amazon FBM is advantageous for exclusive products and small sales volumes
If you do not know how to choose a distribution program, I have a necessary simple tool for you. Amazon is suitable for:
Exclusive products: Products that sell less but have a high added value.
Lower sales volume: If you sell fewer products, it's not worth investing in FBA.Lower margin: If you make low margin products and try to compete on price, Amazon FBM will save you money.
The main advantages of Amazon FBM
Business control: When you manage distribution, you manage Amazon completely and have complete visibility into your operations.
Freer Business: With Amazon FBM, you get better control over your products, inventory. Whenever you want to expand sales, it's easy and fast for you.
More profit from margin with low-cost products: Lower costs contribute to increased profitability. You do not pay distribution fees (if you can store and ship products cheaply).
Building an authentic brand: Communicate directly with customers and make trading more personal. You will get more useful feedback very often and convey the value of the goods better.
Expected costs: Amazon often changes FBA policies and prices. When you "drive" on your own, you have everything under control.
Less paperwork: Amazon FBA-based trading involves a lot of red tapes. Taxation, fulfillment, paperwork, settlement.
Fees await you at Amazon FBM
Get ready for the Amazon FBM distribution program. Charges vary from sales to sales depending on volume and shipping options.
However, some fees are fixed:
"Pro plan": $ 39.99 per month.
Individual Selling Plan: No Charges.
Fee for selling products
"Pro plan": No fees.
Individual Sales: $ 0.99 for each unit of product sold
Referral fee FBM & FBA
Usually 15% for most product categories. 6 to 45% in some categories.
When deciding between Amazon FBM and FBA, or considering switching from FBM to FBA, beware of any fees that may apply to you: Advertising costs, shipping, Amazon fees, and more.
The only way to find out if Amazon sales will be profitable and what kind of logistics to choose. The "How to Amazon" workshops, which we organize at least once a month and starting in January 2020 in Brighton.