Amazon FBM Fees: A Comprehensive Guide for Sellers

As the world's largest e-commerce platform, Amazon offers sellers unparalleled access to a vast customer base. One critical decision sellers face is choosing the right fulfillment method. While Fulfilled by Amazon (FBA) is popular, Amazon Fulfilled by Merchant (FBM) presents a viable alternative that can offer more control and potentially lower costs.

In this guide, we'll delve into everything you need to know about Amazon FBM fees, how FBM works, and whether it's the right choice for your business.

What is Amazon Fulfilled by Merchant (FBM)?

Amazon FBM is a fulfillment method where the seller is responsible for storing inventory, processing orders, and handling shipping, customer service, and returns. Instead of relying on Amazon's fulfillment centers, sellers either manage these tasks themselves or partner with a third-party logistics provider (3PL). Learn more about 1P vs 3P here.

Why is Amazon FBM Popular Among Sellers?

• Control Over Operations: Sellers maintain control over inventory management, packaging, and shipping.

• Branding Opportunities: Use custom packaging to enhance brand recognition.

• Cost Management: Potentially lower fees compared to FBA, especially for large or heavy items.

• Flexibility: Fewer restrictions and more adaptability to business changes.

Understanding Amazon FBM Fees

Referral Fees

• What Are They? A percentage of the total sales price, varying by product category.

• Ranges: Typically from 6% to 45%.

• Example: For electronics accessories, the referral fee is 15% for the portion up to $100 and 8% for any amount above.

Monthly Subscription Fee

• Professional Selling Plan: $39.99 per month.

• Benefits: Waives the per-item selling fee and provides access to advanced selling tools.

Per-Item Selling Fee

• Amount: $0.99 per item sold.

• Note: This fee is waived if you're on the Professional Selling Plan.

Additional Costs to Consider

• Warehousing and Storage: Costs for storing inventory if not using your own space.

• Shipping Expenses: Including packaging materials and carrier fees.

• Opportunity Costs: Time spent on fulfillment could be used for other business activities.

Benefits of Choosing Amazon FBM

• Lower Fees: Reduce costs by avoiding FBA's storage and fulfillment fees.

• Brand Enhancement: Customize packaging to reinforce brand identity.

• Operational Control: Flexibility in managing inventory and fulfillment processes.

• Better Support: Direct handling of customer service can lead to improved customer satisfaction.

Potential Drawbacks of Amazon FBM

• No Automatic Prime Badge: May affect visibility and sales.

• Increased Responsibility: Handling logistics and customer service requires time and resources.

• Learning Curve: Requires understanding of Amazon's policies and efficient fulfillment practices.

Getting Started with Amazon FBM

1. List Your Products: Create detailed and optimized listings on Amazon Seller Central.

2. Manage Inventory: Decide whether to store products yourself or use a 3PL.

3. Process Orders Promptly: Ship orders within the expected timeframes.

4. Handle Customer Service: Be prepared to manage inquiries, returns, and feedback.

Strategies to Manage and Reduce FBM Fees

• Optimize Shipping: Use cost-effective carriers and negotiate rates.

• Efficient Inventory Management: Avoid overstocking to reduce storage costs.

• Automate Processes: Utilize software to streamline order processing and inventory tracking.

Leveraging Fulfillment Partners like ShipBob

Partnering with a 3PL like ShipBob can alleviate many challenges associated with FBM:

• Multiple Fulfillment Centers: Store inventory closer to customers to reduce shipping times and costs.

• Scalability: Easily handle order volume fluctuations.

• Expertise: Benefit from logistics professionals to optimize your fulfillment process.

Conclusion

Understanding Amazon FBM fees and how the fulfillment method works is crucial for sellers aiming to optimize costs and maintain control over their operations. While FBM requires more hands-on management, it offers significant benefits that can enhance your brand and bottom line.

If you need personalized guidance or help fine-tuning your strategies, Superfuel AI can assist. Our AI-powered assistant analyzes 36+ key Amazon metrics to identify and address the root causes of sales fluctuations, helping you optimize your storefront and boost sales. Reach out to us at [email protected].

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Ben Mathew, Amazon Expert

Ben Mathew is a co-founder at Superfuel, a sales assistant for Amazon sellers. In the past, Ben and his team of e-commerce specialists and software engineers have launched 40+ new brands on Amazon, taking them from zero to bestsellers. In his free time, he is either learning from other top sellers or encouraging his 3 daughters in their love for reading. He is reachable at ben [at] superfuel.io.

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FAQs

What are the main fees associated with Amazon FBM?

The primary fees are referral fees (a percentage of the sales price), a monthly subscription fee ($39.99 for the Professional Selling Plan), and a per-item selling fee ($0.99 per item, waived with the Professional plan).

How do referral fees work for different product categories?

Referral fees vary by category, ranging from 6% to 45%. Each category has specific rates, so it's essential to check Amazon's fee schedule for accurate information.

Can I use both FBA and FBM for my Amazon products?

Yes, sellers can use a combination of FBA and FBM, allowing flexibility based on the product's needs and cost considerations.

How can I minimize costs when using Amazon FBM?

Consider partnering with a 3PL to optimize shipping, negotiate carrier rates, and streamline operations to reduce overhead costs.

Do FBM sellers qualify for the Amazon Prime badge?

Not by default. However, sellers can enroll in programs like Seller Fulfilled Prime to gain the Prime badge while handling their own fulfillment.