Pre-FBA Warehousing and Prep
Fulfilled by Merchant (FBM)
Amazon FBM is where the merchant (Amazon seller) is responsible for fulfilling their own orders placed through Amazon. This fulfillment method allows sellers to utilize the Amazon marketplace while the fulfillment is handled by either the seller directly or through their third-party logistics provider. Partnering with a 3PL to fulfill Amazon orders provides many benefits including:
FBM fees are lower than FBA. With FBM, Amazon sellers are typically billed a monthly subscription fee, a small per-order fee, and a per-order referral fee. Fulfilling orders using FBM means that the seller will acquire other costs associated with outsourcing fulfillment to a 3PL. However, storage and fulfillment costs through a 3PL are often lower compared to Amazon’s pricing, which leaves businesses with a higher profit margin on their sales.
Partnering with a 3PL for FBM provides businesses a great opportunity to expand their business with a coordinated omni-channel strategy. When it comes to 3PL partnerships, one of the most beneficial features is scalability as their business partners grow. Services can be expanded or added as businesses grow their distribution channels beyond Amazon’s online marketplace, such as their own online store or other retailers (Walmart, Target, etc.). Companies with a current omni-channel strategy can have their entire inventory managed efficiently under one logistics provider.
Some sellers prefer to have more control over their branding, packaging, and inventory management. 3PLs can offer more customization than Amazon when it comes to their client’s inventory. Amazon inventory must comply with FBA requirements and there is little that a seller can change about the management of inventory once it enters an Amazon fulfillment center.
Amazon has requirements that inventory must meet to be accepted into their fulfillment centers without incurring penalties. There are requirements for the products themselves in addition to the labeling, packaging, and shipping of the inventory. FBM has fewer requirements and a 3PL can guarantee that any and all requirements for orders will be met.
Sellers who are looking for an alternative option for FBA can get overwhelmed looking at the complexity behind fulfillment processes. A 3PL partnership eliminates the hassle of trying to fulfill your own orders and leaves the complex processes to the logistics professionals. 3PLs already have the necessary equipment, labor, space, technology, and proven processes for fast and efficient fulfillment.