FBM Amazon Canada or Amazon Canada fulfillment by merchant, is a method that places the responsibility of product distribution directly on you as the seller. This encompasses the control, handling, and shipping of products to your customers without Amazon’s involvement in the physical distribution process. What does FBM entail?
Advantages of Using FBM on Amazon Canada
- More Control: FBM Amazon Canada sellers maintain full control over their fulfillment process, such as storage, shipping, and customer service. This control proves advantageous for sellers seeking to provide distinctive or personalized fulfillment choices and for those aiming to establish and nurture stronger customer relationships.
- Lower costs: FBM Amazon Canada sellers usually enjoy reduced costs as they handle their fulfillment expenses independently, resulting in lower fees compared to FBA sellers. This proves advantageous, particularly for sellers dealing with high-value or heavy products.
- No Long-Term Storage Fees: FBM Amazon Canada sellers won’t be charged long-term storage fees that FBA incurs.
Challenges of FBM Amazon Canada
- Higher Workload: FBM Amazon Canada sellers require more hands-on effort, including packing and shipping orders, which can be time-consuming.
- Limited Amazon Prime Eligibility: FBM Amazon Canada may not make your products eligible for Amazon Prime, potentially impacting sales.
- Customer service: Customer service falls under the responsibility of FBM Amazon Canada sellers for their orders. This task can be demanding, particularly for sellers dealing with a substantial volume of products.
- Shipping delays: FBM Amazon Canada sellers are at a higher risk of encountering shipping delays compared to FBA sellers, given that they handle their own shipping processes. These delays can have consequences for their seller rating and customer satisfaction.
How to Set Up FBM on Amazon Canada
To set up FBM on Amazon Canada, follow these steps:
- Register as a Seller: If you’re not already a seller on Amazon Canada, register for a seller account.
- Listing Products: List your products on the Amazon Canada marketplace.
Note: What you can sell on Amazon depends on factors like the product type, category, and brand. Amazon’s categories vary, with some open to all sellers, others requiring a Pro account or approval, and some having restrictions. To sell trademarked, copyrighted, or patented brands, you must own the brand or be an authorized reseller. Check your Seller Central account for Amazon’s intellectual property policies.
- Set Fulfillment Method: Choose “Fulfillment by Merchant” as your fulfillment method when listing products.
- Storing your products: As an FBM Amazon Canada seller, you can initially store products at home if you have a small inventory, but as your business expands, you might opt for external storage facilities to lower shipping expenses for your customers. A valuable method for reducing shipping costs involves partnering with a 3PL (Third-Party Logistics provider).
- Set up your shipping templates: Utilize shipping templates to configure shipping rates and handling times for your products. You have the flexibility to create multiple templates tailored to different products or regions.
- Procure shipping labels: FBM sellers on Amazon Canada benefit from reduced shipping rates, making it simple to obtain shipping labels directly through Seller Central.
- Handle Orders: When orders come in, you’re responsible for packing and shipping them.
FBM vs. FBA: Which is Better for Canadian Sellers?
Level of Control Over the Customer Experience:
FBM provides greater freedom and a stronger connection to your customer base, allowing you to control customer service and the overall customer experience. You won’t be tied down to the Amazon ecosystem, and you can leverage excellent customer service partnerships and software beyond Amazon. In contrast, FBA sellers have minimal to no direct interactions with customers, as all interactions are managed by Amazon Canada. The choice between FBM and FBA depends on how hands-on you want to be in customer interactions.
Statistics indicate that 33% of FBM sellers generate higher monthly revenue, compared to 26% of FBA sellers. FBM sellers tend to receive more orders, while FBA sellers can list products at higher prices and target larger markets. However, since FBM sellers do not incur FBA fees, they typically enjoy slightly higher profit margins, which can vary by product.
Predictability in Costs:
Selling through FBM, whether independently or with a 3PL, offers the advantage of predictable business costs without unexpected fees associated with Amazon’s FBA service. In contrast, policy changes made by Amazon may lead to unforeseen expenses for FBA sellers.
FBM sellers can directly engage with their customers, allowing them to deliver authentic customer service and build their brand. While Amazon serves as the transaction facilitator, FBM sellers have the responsibility of fostering further interactions with their customer base, creating a sense of community and brand loyalty over time.
Degree of Business Freedom:
Opting for FBM allows you to operate your business on your own terms, free from the strict requirements and policies imposed by Amazon on FBA sellers. Your choice should align with your business priorities. If your focus is on efficient order fulfillment, FBA may be the better option. However, if you aim to build your brand for the long term, FBM provides greater flexibility.
Tips for Success with FBM on Amazon Canada
- Offer competitive shipping rates and handling times.
- Provide excellent customer service.
- Respond to customer inquiries promptly and resolve any issues quickly and efficiently.
- Keep your inventory levels up-to-date to avoid stockouts.
- Use Amazon’s Seller Central tools to track your sales and performance.
Marketing Your Products with FBM
As an FBM seller on Amazon Canada, the responsibility for marketing and promotion falls on your shoulders. Fortunately, there are several strategies you can employ to enhance your visibility and increase sales. Here are some valuable tips:
- Optimize Product Listings: Your product listings are the first point of contact for potential customers, so make them as compelling as possible. Craft clear, concise titles, employ high-quality images, and provide informative descriptions. Incorporate relevant keywords to ensure your products rank well in search results.
- Run Amazon PPC Campaigns: Utilize Amazon PPC (pay-per-click) advertising to effectively promote your products. These campaigns position your products at the top of search results for pertinent keywords. You only pay when someone clicks on your ad, making it a cost-effective way to market your products.
- Harness the Power of Social Media: Leverage social media platforms to engage with potential customers and showcase your products. Regularly post about your products and special offers, interact with your followers, and consider running targeted social media ads to reach specific audiences.
- Prioritize Outstanding Customer Service: Exceptional customer service is a cornerstone of success on Amazon. Responsiveness to customer inquiries and efficient issue resolution are key to building a positive reputation.
- Participate in Amazon Promotions: Amazon frequently hosts promotions like Prime Day and Black Friday. Active participation in these events can significantly boost your sales.
In the realm of FBM Amazon Canada, (Fulfillment by Merchant) offers sellers a flexible alternative to FBA. It allows for greater control and potentially lower costs. However, it comes with added responsibilities. Sellers must excel in customer service, shipping, and inventory management to thrive with FBM. Whether FBM or FBA is the better choice depends on the unique needs of your business.