How Amazon FBM Model works: Selling and Shipment Process

Selling on Amazon is incredibly profitable, flexible, and a major source of income for Amazon’s 2.5 million sellers. No one’s stopping you from selling on Amazon if you have the right resources and time

Amazon sellers have two options available when it comes to selling. The first one is Fulfillment by Amazon (FBA) in which the inventory is stored in Amazon’s warehouses and shipped from there. The one is called Fulfillment by Merchant (FBM) in which you have to take care of inventory and also it’s your responsibility to ship your products on your own.

Sellers have been doing Fulfillment by Merchant (FBM) after the COVID-19 pandemic. Due to the pandemic, sellers have been trying to handle all the processes on their own.

How to sell on Amazon:

Step 1. Select your marketplace:

Amazon has 18 global marketplaces in total. This includes Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Netherlands, Saudi Arabia, Singapore, Spain, Sweden, Turkey, United Arab Emirates, United Kingdom, and the United States.

We recommend the following guidelines:

Sell in the US marketplace if you are a US seller: The US is the largest Amazon marketplace and it is also the easiest place to get started.

Sell in the EU marketplace if you are a seller living in the EU or the United Kingdom: EU marketplace is the second-largest Amazon marketplace in the world. It includes countries i.e. United Kingdom, Germany, Spain, France, Netherlands, and Italy.

Step 2 – Select your business model:

Amazon lends itself well to different business models that are suitable to all different budgets, time investments, and seller personalities. But, the business model you select depends on whether you know what you want to sell on Amazon or not.

These are the top business models for Amazon sellers:

Private Label: Private label is the process of making bulk products to sell under one’s own brand or label.

Wholesale: Wholesale is the process of buying another company’s branded products in bulk to resell on Amazon.

Reselling (Arbitrage): Reselling is the process of purchasing discount products at retail outlets, big box stores, or even online on discount sites like eBay for selling at a higher price on Amazon.

Dropshipping: Dropshipping is the process of marketing and selling products to another manufacturer or supplier. When a sale is made, the drop shipper buys the product from the supplier and then ships the product to the buyer.

Handmade: In Handmade, Amazon sellers create their products to sell on Amazon, like clothing, jewelry, or gifts.

Step 3 – Select your fulfillment method:

Amazon offers two methods for fulfilling products:

Fulfillment by Amazon (FBA): Fulfillment by Amazon (FBA) is a method of selling in which a seller sends their products directly to Amazon’s warehouses.

Fulfillment by Merchant (FBM): Fulfillment by Merchant (FBM) is a method of selling in which a seller lists their products on Amazon and does all the things by himself i.e. storage, shipping, and customer support.

Step 4 – Creating an Amazon seller account:

After that, you’ll need to get your business set up.

First of all, you must choose a name for your business. The name of your business can be anything, but it is recommended that you keep it relatively generic in case you want to move your focus in the future.

However, it is not necessary that you need to file your business as a corporation or LLC when you’re starting. You can sell on Amazon as a sole proprietorship/trader, meaning that you use your tax ID.

Once you have all your business information, it’s time that you can create an account in Amazon Seller Central.

1. The following information must be prepared while creating an Amazon Seller Central Account:
2. Business information (your business name, contact information, and address)
3. Email address
4. Credit card
5. Phone number
6. Tax ID (Federal and State)

• Go to Amazon Seller Central (sellercentral.amazon.com) and Register.

• You can choose between professional or individual sellers.

• Enter your information into Amazon.

Step 5 – List a product:

After Amazon approves you for selling on the platform, you can start listing products.

There are two ways to list a product:

1. Sell on an existing product listing:

If you are selling a product that is already present in Amazon’s catalog, all you need to do is go to the existing listing and click the ‘Sell on Amazon’ button.

From there, add the information for your offer:

• Your price
• Condition (new or used)
• Quantity
• Fulfillment channel (FBM or FBA)

2. Create a new product listing:

If the product is not present in Amazon’s catalog, you will need to create a new product listing. To do this, you must:

1. Log in to Seller Central
2. Click Inventory > Add a product
3. Click ‘I’m adding a product not sold on Amazon’
4. Enter all the details of the product

After you have created your listing, it may take a few minutes to an hour for your listing to appear in Amazon’s catalog.

Step 6 – Fulfill your orders:

When an order arrives at you on Amazon, you will need to fulfill the order.

If your products are sold via Amazon FBA, then it’s Amazon’s responsibility to handle the whole process. However, if you are selling your product via Amazon FBM, then it’s your responsibility to handle and ship your order.

To learn more about Amazon FBM and How to Sell and Ship your products on Amazon, Join our Amazon Training Program.