Amazon FBM (Fulfilled by Merchant) is a fulfillment option where the seller manages their products’ storage, packing, and shipping directly to customers instead of using Amazon’s FBA (Fulfilled by Amazon) service.

With FBM, sellers are responsible for:

1. Managing inventory – Storing products in their warehouses or facilities.
2. Fulfillment of orders – Picking, packing, and shipping items directly to customers when an order is placed.
3. Customer service – Handling returns and responding to customer inquiries.

FBM is a good choice for sellers who prefer more control over their inventory and shipping processes or have products that aren’t well-suited for Amazon’s FBA system.

Selling on Amazon is one of the easiest ways to generate extra income or grow your business. Whether you’re an aspiring entrepreneur or a seasoned pro, getting started on Amazon is something you can do today!

Did you know?

• 64% of Amazon sellers become profitable within their first year.
• 14% of Amazon sellers earn over $100,000 in lifetime profits.
• 64% of sellers spend fewer than 20 hours weekly on their Amazon business.

Selling on Amazon is unique to every seller, and your first step is deciding the kind of business you want to build. Let’s walk you through the main decisions you’ll make and introduce you to how selling on Amazon works.

Step 1: Pick Your Marketplace

Amazon operates across 20 global marketplaces, from the U.S. to Japan and Brazil to Saudi Arabia. While you can sell on any marketplace, here’s our advice:

• US-based sellers? Stick with the US Marketplace. It’s the largest and easiest to get started with.
• Living in the EU or the UK? Sell in the EU Marketplace—it’s the second largest, though a bit trickier with taxes and language barriers.
• Living anywhere else? Go for the US Marketplace, as other global marketplaces have less traffic or sales potential.

Step 2: Choose Your Business Model

Amazon is great for all sorts of business models. Whether you’re a newbie or a pro, the model you pick will depend on whether you know what you want to sell.

Here are the most popular business models on Amazon:

• Private Label: Create your brand from bulk products (59% of sellers do this).
• Wholesale: Buy branded products in bulk and sell them (26% of sellers do this).
• Reselling (Arbitrage): Buy discounted products at stores or online and resell them at a profit (26% retail, 23% online).
• Dropshipping: Sell products you don’t physically own by ordering from suppliers when you make a sale (10% of sellers do this).
• Handmade: Sell your creations like jewelry or gifts on Amazon Handmade (8% of sellers).

You can also dive into digital products or niche models like Kindle Direct Publishing or Amazon Merch.

Step 3: Select Your Fulfillment Method

Now, let’s talk about how you’ll fulfill your orders. There are two methods:

1. Fulfillment by Amazon (FBA): You send your products to Amazon’s warehouse, and they handle storage, shipping, and customer support. 89% of sellers use FBA.
2. Fulfillment by Merchant (FBM): You independently handle the storage, shipping, and customer service. 32% of sellers use FBM, and 11% use FBM exclusively.

Many sellers use both methods to get the best of both worlds!

Step 4: Set Up Your Amazon Seller Account

Creating your Amazon Seller account is a breeze! Here’s what you’ll need:

• Business name (pick something flexible in case you pivot later)
• Email address
• Credit card details
• Tax ID (Federal and State)
• Contact details

Once your info is ready, head to Amazon Seller Central to register. You’ll decide if you want to be a professional or individual seller (based on your sales volume).

Step 5: List Your Products

Once you’re approved as a seller, it’s time to list your products. You’ve got two options:

1. Sell on an existing product listing: If your product is already listed on Amazon, just click “Sell on Amazon” and enter your details.
2. Create a new product listing: If your product isn’t on Amazon, you’ll create a fresh listing with details like price, quantity, and fulfillment method.

Step 6: Fulfill Your Orders

Once you make a sale, it’s time to fulfill the order! If you’re using FBA, Amazon takes care of it. But if you’re using FBM, you must handle shipping and customer service yourself (or through a third party).

Selling on Amazon is thrilling, but it’s not all about putting products on the platform and waiting for sales to roll in. If you’re considering using Fulfillment by Merchant (FBM), weighing both the upsides and challenges before diving in is essential. Let’s look at what makes FBM a fantastic option—and where it might trip you up.

The Pros of Selling on Amazon FBM

1. Higher Revenue Potential: FBM sellers tend to rake in more revenue. 33% of FBM sellers earn over $25,000 per month, compared to 26% of FBA sellers. Plus, 53% of FBM sellers have lifetime sales of over $100,000, versus 46% of FBA sellers. Who doesn’t want those more significant profits?
2. Low Startup Costs: If you want to start small, FBM is an excellent option. 37% of FBM sellers kick off their business with less than $1,000, while only 27% of FBA sellers do the same. So, if you’re on a budget, FBM allows you to dip your toes into the e-commerce world without spending a ton upfront.
3. Speedy Startup: FBM sellers are fast on the draw! A whopping 51% of FBM sellers get started in less than six weeks, compared to just 34% of FBA sellers. Plus, 47% of FBM sellers are making a profit in less than three months, while only 38% of FBA sellers are reaching profitability that quickly. Who doesn’t want to start seeing returns fast?
4. Flexibility During Crunch Time: The holidays can be a headache for FBA sellers when Amazon’s warehouses get bogged down with inventory and delays. But FBM sellers? They’re not tied to Amazon’s fulfillment system so they can fulfill orders even during high-demand periods. This is also handy in emergencies—for example, when Amazon stopped shipping certain products during the COVID-19 pandemic, FBM sellers kept rolling.

The Cons of Selling on Amazon FBM

1. More Time Spent on the Business: If you like having more control, FBM might be your thing—but it does come with a catch. 20% of FBM sellers spend over 40 hours weekly on their business, compared to 16% of FBA sellers. The hustle is real, folks!
2. Increased Competition: FBM sellers face more competition, with 72% worrying about price wars eating into profits, compared to 70% of FBA sellers. On top of that, 57% of FBM sellers are concerned about Amazon itself selling competing products, while only 51% of FBA sellers feel the same. It’s a crowded marketplace and everyone’s fighting for the top spot!
3. Customer Service Headaches: One of the most significant differences between FBM and FBA is customer service. With FBA, Amazon handles most customer service, but with FBM, it’s all on you. You’ll need to manage returns, handle customer complaints, and keep track of feedback. It’s a lot more work but gives you direct control over your customer relationships.
4. Higher Costs for Some Sellers: It might sound like FBM would save you money since you’re handling everything yourself, but in reality, FBM costs can be higher than FBA costs when you factor in shipping fees, packaging, and handling. Want to know which option is cheaper? Use Amazon’s FBA calculator to compare costs and profits.

Listing a product on Amazon FBM is similar to listing it with any other fulfillment method. Just follow these steps:

1. Create your product listing in Amazon Seller Central.
2. When you get to the “Fulfillment Channel” section, select the option that says, “I will ship the item myself (Merchant Fulfilled).”
3. Once your product is live, head to Inventory > Manage Inventory to find your FBM products.

Make sure your FBM listings are set to “Active,” and the “Fulfilled by” section is marked as “Merchant.”

Shipping can get tricky depending on the method you choose. Here’s a basic rundown of what you’ll need:

• Boxes & Envelopes: These are for packaging your products.
• Packing Material: Think air bags, bubble wrap, and brown paper to keep items safe.
• Mailing Labels: Peel-and-stick labels for easy shipping.
• Printer: For printing out shipping labels.
• Tape: Make sure your packages are secure!

Pro Tip: If you’re using USPS Flat Rate, you can grab free boxes from your local post office or have them delivered to your door. For other shipping methods, you’ll need to supply your materials.

There are plenty of places to snag your shipping materials, but here are a few go-to sources for bulk buying:

• Uline: A big name in packaging supplies.
• Fastpack.net: Another great option for bulk shipping materials.
• Amazon.com: Of course, Amazon sells packing supplies and even offers fast delivery!

Amazon does not explicitly require a business license to sell using FBM, but local regulations may mandate one depending on your location, business structure, or the type of products you sell. Certain items, such as food or cosmetics, might require special permits. You may also need a sales tax permit to collect and remit taxes and an EIN for tax reporting or forming a business entity. While not always necessary, compliance with local laws is crucial to avoid legal issues. Consult a local advisor to confirm requirements for your area and business type.

Selling on Amazon using FBM involves fees such as a $0.99 per-item fee for the Individual Plan or a $39.99 monthly fee for the Professional Plan. Amazon also charges a referral fee, typically 6-15% of the total sales price, and a $1.80 closing fee for media items like books. As the seller, you’re responsible for shipping costs, which depend on the carrier, package size, and weight. Additional costs may include optional advertising fees, a refund administration fee, and category-specific charges. Properly managing these fees is essential to maintain profitability.

FBM sellers on Amazon must align their return policy with Amazon’s standard 30-day return window, which is extended during holidays. Sellers are responsible for handling returns and processing refunds within two business days of receiving the item. If the return is due to seller error, a prepaid return shipping label must be provided, while buyers may cover shipping costs for discretionary returns. Exceptions include perishable goods and customized items, which are non-returnable unless defective. Restocking fees can be applied for non-seller errors if stated in the return policy. To maintain compliance and customer satisfaction, sellers should ensure their policy meets Amazon’s guidelines.

Which one is better ? Amazon FBA or FBM?

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