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How to start selling on Amazon without FBA

With self-isolation and lockdowns giving everyone a little more time at home this year, now is the perfect opportunity for budding entrepreneurs to begin that Amazon business they’ve always dreamed of.

From March to April, Amazon FBA restricted inbound deliveries of non-essential items. Depending on what you want to start selling, you may have to start without FBA in the meantime. Here’s how to do it.

What is Fulfillment by Amazon (FBA)?

FBA (Fulfillment by Amazon) is a service for Amazon sellers, whereby sellers send their inventory to FBA warehouses across the country, for Amazon to fulfill incoming orders from your store.

The FBA service includes storing, picking, packing, shipping, tracking, and handling returns. For someone starting to sell on Amazon, this is ideal. You don’t have to worry about acquiring storage space, learning about logistics, or breaking the bank to get orders out quickly.

Although FBA is slowly recovering, it is not what it was. If you’re starting an Amazon business, some restrictions could prevent you from fully utilizing FBA and affect your ability to generate new sales by offering fast shipping.

Use Fulfillment by Merchant (FBM) to start selling on Amazon without FBA

Fulfillment By Merchant (FBM) is when you handle the storage, picking, packing, shipping, and return of your Amazon orders, as opposed to outsourcing it to Amazon FBA.

This method of fulfillment has many benefits, both now and long-term.

1) Overcoming current FBA restrictions

FBM immediately overcomes the current FBA restrictions, which means that you can ship new products immediately, replenish stock, and offer customers fast shipping speeds.

2) More control

While FBA is undoubtedly an easy option for new Amazon sellers, it involves relinquishing a lot of control to Amazon straight away. FBM allows you to test out different fulfillment methods and practices first, before deciding who to hand them over to.

3) Reduced costs for some products

FBM allows you to find a fulfillment solution that best suits your products and budgets without worrying about Amazon’s high fees for heavy, bulky, slow-moving, or multi-channel products.

4) Flexible growth

FBM is perfect for new Amazon sellers who, especially now, have the time and space to fulfill orders themselves. As your business grows, your fulfillment methods can grow with them, or you can later use FBA or outsource FBM.

5) Increasing sales

FBM sellers currently have a greater chance of winning the buy box and can still qualify for Prime tags with Seller Fulfilled Prime, providing more opportunities for increasing sales.

How does FBM work?

There are two methods for starting selling on Amazon with FBM: In-house or outsourced.

1. In-house FBM

In-house FBM involves handling the entire fulfillment process yourself, using your own facilities, software, man (or woman) power, and chosen shipping carrier.

In-house FBM has the benefits of keeping your costs low by using your garage, your family, and budget shipping carriers to deliver items, and teaching you the basics of Amazon fulfillment while you’re still small.

However, in-house FBM isn’t for everyone. Issues such as a lack of space, limited cash flow, and inexperience can result in poor shipping standards, slow delivery speeds, and a drain on time that’s better invested in growing your business.

2. Outsourced FBM

Outsourced FBM involves using an outsourced fulfillment partner to handle your entire fulfillment process for you, much like Amazon FBA.

Outsourced FBM has the advantage of existing space, tools, staff, locations, and expertise for delivering items more quickly, efficiently, and satisfactorily than you can in-house.

There are reasons why new sellers are cautious about using outsourced FBM, especially if they’re small and have limited product lines and cash.

However, with the right fulfillment partner, no one is too small to get started with outsourced fulfillment.  Plus, by opting for a provider with all-inclusive pricing and no added costs, long-term contracts, or hidden fees, no one should be too cash-strapped to use outsourced fulfillment either.

How to set up FBM

Getting your FBM operation in place before you start selling on Amazon is good practice – this is not something you want to be worrying about after receiving your first order.

Setting up in-house FBM

Setting up in-house FBM requires:

  • Storage space for your inventory;
  • Packing space for packaging orders;
  • A method or tool for syncing inventory levels on Amazon;
  • A reliable shipping carrier who can achieve 2-day shipping speeds; and
  • An efficient process for taking orders from receipt through to your shipping carrier in the quickest time possible.

Setting up outsourced FBM

Consider the folloing when selecting your fulfillment partner:

  • Shipping speeds – how quickly can they fulfill orders?
  • Warehouse locations – which parts of the country do they cover?
  • Adaptability – can they respond to peaks and troughs in demand?
  • Pricing – is their pricing model clear and affordable?
  • Coronavirus – are their warehouses operational during COVID-19?

How to start selling on Amazon with FBM

Starting selling on Amazon with FBM is largely similar to starting with FBA.

1. Choose a selling plan

There are two Amazon selling plans:

Individual – $0.99 every time you sell an item

Professional – $39.99 per month

Both plans are also subject to a percentage referral fee for each sale.

2. Create an Amazon seller account

Head to sell.amazon.com, click Sign Up, and enter an email address and password.

You’ll be prompted to complete information, including:

  • Your business name
  • Your business address, telephone number, and website (if applicable)
  • Chargeable credit card
  • Government ID
  • Tax information
  • A bank account for sale proceeds

3. Add your products

After conducting your Amazon product research and sourcing the best products to sell on the platform, you can add them to your Amazon store.

COVID-19 has changed purchasing behavior, leading to different product trends. This may require re-thinking your product lines.

Use Seller Central’s Add Product tool to create a product listing, including a title, description, photographs, and keywords. You must also create an SKU for each product – a unique product ID that allows you or your FBM fulfillment provider to track inventory and fulfill orders.

Note: Don’t forget to mark your products as FBM on Amazon.

4. Attract customers

Once your products are live on Amazon, you can start attracting customers to your listings using the flywheel effect.

This includes using tactics such as:

  • Fast Delivery – Delivering items in 2-days or fewer to qualify for Seller Fulfilled Prime.
  • Marketplace Ads – Increasing impressions with sponsored products and sponsored brand advertisements.
  • Competitive Pricing – Using an Amazon repricer to maintain competitive prices and put you in a good position for winning the buy box.

5. Fulfill orders

Depending on the FBM method chosen, you’ll need to fulfill Amazon orders as follows:

In-house

Download the relevant order information and then pick, pack, and ship the order using your internal fulfillment processes and chosen shipping carrier. Don’t forget to update the order with tracking details.

Outsourced

If using an Amazon FBM outsourced fulfillment expert, work with them to get inventory to their network and set up order tracking. Outsourcing fulfillment means orders will be sent to customers for you – all you need to do is handle any returns or exchanges that arise.

The current FBA restrictions might not be ideal for new Amazon sellers, but the additional time, sales, and opportunities generated by the pandemic mean that FBM can help you to start selling on Amazon in no time and, if you choose, with little extra hassle.

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