FBA? FBM?

You want to do e-commerce on Amazon. You started researching how to do it. If, while watching YouTube videos, you came across terms such as “doing FBA” or “doing FBM” in many places, don’t worry at all.

In this article, I will explain the FBA and FBM concepts, which are very commonly used in Amazon terminology. This way, you will also become familiar with this language. Let’s get started!

By checking out our tools that will help you at https://mysys.com/ , you can also achieve easy and comfortable gains in this sector.

1. What Is FBM?

You have opened a store on Amazon and want to sell products. If you say that you can handle storage, shipping, and customer support yourself, this is called the FBM business model on Amazon. FBM is an abbreviation formed from the initials of the English phrase Fulfilled By Merchant.

As you can see here, you handle all sales processes yourself. In FBA, which I will explain shortly, if you want to sell more than 40 items per month, Amazon states that it can handle these processes itself in exchange for a monthly fee of 39.95 USD.

In other words, you can either pay Amazon a monthly fee of 39.95 USD to get rid of storage, shipping, customer support, and return processes, or you can choose FBM by saying you want to keep your money and handle everything yourself.

2. How Does FBM Work?

Do not worry about the processes mentioned above. Thousands of people use the FBM model on this marketplace. Amazon does not question why you are doing FBM. It already earns a commission from every product sold.

Of course, there are points you need to pay attention to when doing business with the FBM model. Most importantly, you deal directly with the customer. From delivering your customers’ orders on time and without damage to storage processes;

From packaging and shipping the products to handling product returns, you must manage a series of activities smoothly. If product returns or refunds are required, deciding how to handle them and managing customer relations in the best possible way while doing all this is very important.

Now you might ask yourself, “In which situations should I choose the FBM model, and in which situations should I choose the FBA model?” To give the clearest answer to this question, we conducted a study. Now let’s take a look at the most suitable conditions for FBM. If;

If you want to sell a small number of products,
If you have large or heavy products to ship,
If you have sufficient storage space to store products,
If your inventory quantity is low,
If you have enough time to dedicate to all processes,
If you think you can manage customer relations smoothly,
If you can operate a logistics system that is already running smoothly, then we can say that the FBM model is more profitable for you.

The advantages of the FBM model are that if an issue arises with the products you are selling, since you keep the products in your own warehouse, you can react quickly and find a solution to the problem.

Unfortunately, this is not possible for products that have been sent to FBA warehouses. If faulty products are sent to the warehouses, you have two options: either request that these products be sent back to you (Ship-to Address) or choose to have them destroyed by Amazon (Dispose).

Of course, returning products to your own warehouse, fixing the issues, and resending them to the FBA warehouse is quite costly. Amazon’s disposal service also requires an additional fee calculated based on the number of products.

After all this, you may wonder how to do the FBM model. With the modules it has, MySYS allows you to analyze products and identify profitable ones. It then enables you to market the product or products you have identified and decided to sell in the business model of your choice.

For both business models, you must first create an Amazon seller account. For this, you can read our article titled 5 Rules You Need to Know to Sell on Amazon .

Then, list the products you have analyzed and decided to sell on your Amazon page and create product pages. Pay special attention to product images here. At this point, our article titled Tips for Taking High-Quality Product Images will guide you.

In addition, the keywords you use in product promotion are very important. Otherwise, you may appear on the 20th or 30th page, which brings you no benefit. Remember, the vast majority of customers shop on the first page and then leave. Therefore, product descriptions are crucial.

After listing your products on the page, the next stage for FBM is storage and order management. When an order arrives, that notification sound on your phone will surely increase your motivation.

If you want those notification sounds to increase, you should strive to deliver orders on time and without damage. Also, pay special attention to packaging. In this regard, be sure to read our article Things to Consider When Packaging Products . The tips will make your life easier.

Finally, unfortunately, even if you don’t want them, there will be product returns or customer complaints. I recommend handling this process in the most polite way possible. If possible, send a replacement product instead of processing a return.

Think of this not as a loss but as an investment. If your customers report unresolved problems to Amazon, sellers are generally found at fault. This is the company’s policy. Amazon has a “the customer is always right” mindset—just so you know.

3. What Is FBA?

In FBA, which stands for Fulfilled By Amazon, you send your products to Amazon’s logistics centers. Amazon handles customer service and returns for these products, packages them, and delivers them to the buyer. As you can see, you are only responsible for sending products to the warehouses and managing your inventory.

I can hear you asking, “I can handle these myself. Why should I do FBA?” You’re right—why throw away about 40 dollars a month? There must be something it gives you in return for paying this fee.

We researched the answer to this question for you and identified several situations in which doing FBA is more appropriate. If;

You have a large number of products and fast sales turnover,
You do not have sufficient storage capacity,
You want faster order deliveries,
You have limited resources for handling customer service and returns, then we can say that the FBA model is more suitable for you.

The advantages of this business model are;

You can obtain the Amazon Prime label. This label is especially advantageous for fast delivery. Products are delivered the same day or within 2 days at the latest.
You can be ahead in Buy Box competition. If you plan to sell a product that can also be sold by other sellers, it is beneficial to be competitive in the Buy Box. One of the criteria considered for winning the Buy Box is whether the sale is under FBA.
Logistics convenience. Once products are sent to Amazon warehouses, it doesn’t matter whether you receive 10 or 1,000 orders per day. Amazon handles all packaging, shipping, and return operations.
Customer relationship management in the local language. Amazon uses the local language of the customer in return processes and other customer service operations, which provides great ease of communication and a major advantage in e-commerce.

4. What Are the MySYS Conveniences in FBA and FBM?

The MySYS Wholesale Analysis module calculates purchase prices, purchase/sales tax rates, and FBA/FBM shipping costs for the analyzed products. It also includes Amazon commission amounts for each product by retrieving them directly from Amazon.

With MySYS, you can make your business easier and more effective to manage with advanced product discovery, listing, sales analysis, and competitor analysis capabilities for these business models, as well as stock synchronization between your other marketplaces and stores. We explained this in more detail visually in our introductory video titled Sending Products to FBA .

With MySYS, you can find products online from “Amazon” in the United States and Europe, and from “N11, Trendyol, Hepsiburada, Boyner, and Morhipo” in Turkey. You can also easily identify profitable products using product lists obtained from wholesalers in any country or lists you have compiled personally.

You can list thousands of these products on Amazon or eBay with just a few clicks.

You can track and manage orders from Amazon, eBay, Etsy, and Shopify on a single screen, bulk-purchase shipping labels for your Amazon FBM and other marketplace orders, and close these orders on the marketplace side.

You can also track how much of which product you sell from which store on a single screen and easily synchronize stock and prices between your stores.

MySYS Warehouse Management module provides great convenience in storage. Thanks to our warehouses located in Turkey, the USA, the UK, and Germany, you can deliver your products easily and quickly.

Remember, the FBM and FBA business models apply to Amazon. For Etsy, eBay, and Shopify, you must manage all operations yourself. In other words, only FBM is used on these three marketplaces.

CONCLUSION

In this article, we thoroughly examined the FBM and FBA Amazon business models. We tried to present how they work, their fees, and their advantages in a concise format. You are not required to choose only one of these models. You can choose both on a product-by-product basis and determine your strategies accordingly.

MySYS provides great convenience for you in both FBA and FBM business models. I recommend reviewing our modules for product discovery, sales analysis, competitor analysis, and warehousing. Moreover, the first month is free. You can benefit from the conveniences of this system free of charge for up to 1,000 products.

You can follow our important content and the new features we add to MySYS every day.

Don’t forget to subscribe to our newsletter and follow our social media accounts. Wishing you profitable days…

If you wish, you can try the MySYS Analysis Free package, which consists of Arbitrage Analysis and the Chrome Extension, free of charge and test product discovery and listing capabilities (No credit card required).