The Ultimate Guide to Amazon FBM
Amazon stands as the world’s largest e-commerce platform, presenting sellers with a vast audience. Sellers on Amazon have the flexibility to choose from several fulfillment methods, each with unique benefits and challenges:
- Fulfilled by Merchant (FBM) — also known as Merchant Fulfilled Network (MFN)
- Fulfilled by Amazon (FBA)
- Multi-Channel Fulfillment (MCF)
- Seller Fulfilled Prime (SFP)
- Amazon Direct Fulfillment
Understanding the distinctions between these methods is crucial for optimizing your fulfillment strategy and achieving e-commerce success.
1. What is Amazon Fulfilled by Merchant (FBM)?
Amazon Fulfilled by Merchant (FBM), also known as Merchant Fulfilled Network (MFN), allows sellers to manage the storage, packing, and shipping of their products directly. Sellers can handle FBM themselves or partner with a third-party logistics (3PL) provider to manage these tasks.
Instead of leveraging Amazon’s fulfillment centers and services, FBM sellers maintain control over their inventory, order fulfillment, returns, and customer service.
2. Why is Amazon FBM Popular?
Although using Amazon FBM means your products won’t have Prime status, there are several reasons why this fulfillment method can be advantageous:
a) Greater Control Over Inventory and Branding
Sellers manage their own warehousing and fulfillment, allowing for customized packaging and direct inventory visibility.
b) Cost Savings
FBM can be more cost-effective as it eliminates many of the fees associated with Fulfillment by Amazon (FBA), such as storage and handling fees.
c) Reliability
Sellers are not at the mercy of Amazon’s policies or fulfillment capacity, which can sometimes lead to delays or other issues with FBA.
3. How Amazon FBM Works
FBM involves the seller fulfilling orders directly when products are sold on Amazon. This method is often the only option available to new merchants who lack the volume or approval to use FBA. Here are the steps to implement Amazon FBM:
a) List Your Products on Amazon
Set up an account on Amazon Seller Central and list your products. Ensure that your listings are optimized with high-quality images, videos, and detailed descriptions to improve conversion rates.
b) Warehouse Products
Depending on your business size, you can store products in your own warehouse, a storage center, or even your home. Distributing products strategically can reduce shipping costs and delivery times.
c) Timely Shipping
Once an order is received, ship the product within the specified delivery timeframe. Provide order tracking and ensure your account has valid return instructions.
4. Amazon FBM Fees
Amazon FBM operates on a fee-based structure, including referral fees, a monthly subscription fee, and per-item selling fees.
a) Referral Fees
These depend on the product category and range from 6% to 45% of the product’s selling price.
| Fee Category | Referral Fee Percentage | Applicable Minimum Referral Fee |
| Amazon Device Accessories | 45% | $0.30 |
| Amazon Explore | 30% for Experiences | $2.00 |
| Automotive and Powersports | 12% | $0.30 |
| Baby Products | 8% for sales price ≤ $10, 15% for sales price > $10 | $0.30 |
| Backpacks, Handbags, and Luggage | 15% | $0.30 |
| Beauty, Health, and Personal Care | 8% for sales price ≤ $10, 15% for sales price > $10 | $0.30 |
| Business, Industrial, and Scientific | 12% | $0.30 |
| Clothing and Accessories | 17% | $0.30 |
| Compact Appliances | 15% for portion ≤ $300, 8% for portion > $300 | $0.30 |
| Computers | 8% | $0.30 |
| Consumer Electronics | 8% | $0.30 |
| Electronics Accessories | 15% for portion ≤ $100, 8% for portion > $100 | $0.30 |
| Everything Else | 15% | $0.30 |
| Eyewear | 15% | $0.30 |
| Fine Art | 20% for portion ≤ $100, 15% for portion $100-$1000, 10% for $1000-$5000, 5% for >$5000 | — |
| Footwear | 15% | $0.30 |
| Full-Size Appliances | 8% | $0.30 |
| Furniture | 15% for portion ≤ $200, 10% for portion > $200 | $0.30 |
| Gift Cards | 20% | — |
| Grocery and Gourmet | 8% for sales price ≤ $15, 15% for sales price > $15 | — |
| Home and Kitchen | 15% | $0.30 |
| Jewelry | 20% for portion ≤ $250, 5% for portion > $250 | $0.30 |
| Lawn and Garden | 15% | $0.30 |
| Lawn Mowers and Snow Throwers | 15% for sales price ≤ $500, 8% for sales price > $500 | $0.30 |
| Mattresses | 15% | $0.30 |
| Media – Books, DVD, Music, Software, Video | 15% | — |
| Musical Instruments and AV Production | 15% | $0.30 |
| Office Products | 15% | $0.30 |
| Pet Products | 15%, 22% for veterinary diets | $0.30 |
| Sports and Outdoors | 15% | $0.30 |
| Tires | 10% | $0.30 |
| Tools and Home Improvement | 15% | $0.30 |
| Toys and Games | 15% | $0.30 |
| Video Game Consoles | 8% | — |
| Video Games and Gaming Accessories | 15% | — |
| Watches | 16% for portion ≤ $1500, 3% for portion > $1500 | $0.30 |
b) Monthly Subscription Fee
Amazon offers a subscription fee for the Pro FBM service at $39.99 per month. This plan waives additional per-item fees when a product is sold.
c) Per-Item Selling Fee
The per-item selling fee is $0.99 for each item sold, waived if you subscribe to the Pro FBM plan.
d) Other Fees
If you partner with a 3PL to handle Amazon FBM, you may encounter additional storage and fulfillment costs. Self-fulfillment might seem cost-effective, but consider the opportunity costs of time spent on packing and shipping.
5. Save Time, Cut Shipping Costs, and Speed Up Deliveries with ShipSage
Amazon FBM can be an excellent option for sellers, especially with the right fulfillment partner. Working with a fulfillment platform like ShipSage allows you to leverage the benefits of FBM without handling logistics yourself. ShipSage can fulfill your Amazon FBM orders and offer a Prime-like experience for your direct-to-consumer (DTC) website orders as well. Below are some of the advantages of partnering with ShipSage.
a) Multiple Fulfillment Centers
ShipSage has numerous centers across the USA, enabling you to split inventory across locations. Orders are fulfilled from the center closest to the customer, reducing shipping costs and delivery times.
b) Exceptional Support
ShipSage acts as an extension of your brand, providing personalized support. Unlike Amazon, you can easily reach dedicated representatives who understand your business.
c) Advanced Technology
ShipSage seamlessly integrates with Amazon FBM, offering a dashboard for inventory management, performance metrics, and analytics. Set reorder points to ensure inventory availability and access critical data.
d) Scalable Sales Channels
While Amazon is a significant channel, diversifying through your own store is essential. FBM allows you to build and remarket to your customer base, avoiding the limitations of Amazon’s data policies.
6. Conclusion
Amazon FBM offers greater control and cost savings compared to FBA, making it a strategic choice for many sellers. Partnering with a 3PL like ShipSage can optimize your fulfillment process, providing a Prime-like experience without the high costs of FBA.
Request Fulfillment Pricing from ShipSage to learn how we can support your Amazon FBM fulfillment and help your business thrive.
