Amazon: dual fulfillment (FBA and FBM)

Learn how to implement a dual-fulfillment workflow on Amazon by combining Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) in a single agencomatic dashboard. This guide explains how to manage both fulfillment methods efficiently, streamline order processing, and optimize your Amazon selling operations.

If you are selling products on Amazon, you might be wondering whether you have to choose between using Fulfillment by Amazon and Fulfillment by Merchant.The good news is that you don't have to pick just one.Amazon allows sellers to use both methods at the same time, which is referred to as a hybrid fulfillment strategy.

By combining Fulfillment by Amazon and Fulfillment by Merchant, you can manage your inventory more effectively, reduce your fulfillment costs, avoid running out of stock, and continue serving customers even when your Amazon inventory is low.
In this guide, we'll explain how using these two methods together works, the benefits and drawbacks of each, and the best practices to make this approach work for you.

Fulfillment by Amazon refers to a service where you send your products to Amazon's fulfillment centers.
Amazon stores your items, picks and packages orders, ships them to customers, handles customer service, and processes returns for eligible items.

Some advantages of using Fulfillment by Amazon include:

- Your products are eligible for Prime shipping, which is faster.
- Amazon handles storage and fulfillment of your orders.
- Amazon manages customer service and returns.
- It's easier to grow your business.
- Customers trust and are satisfied with Amazon.

However, there are also some disadvantages:

- You must pay storage and fulfillment fees.
- You may pay extra for products that don't sell quickly.
- You have less control over how your inventory is managed.
- You need to prepare and label your products according to Amazon's requirements.

Fulfillment by Merchant means you are responsible for storing your inventory, packing orders, shipping products, and handling customer service.
You can manage this on your own or use a third-party logistics provider.

Some advantages of Fulfillment by Merchant include:

- You have more control over your inventory.
- It can be cheaper to store your products.
- It is better suited for large or heavy items.
- You have more flexibility in how you package and ship your products.
There are no fixed limits on the amount of inventory you can store.

However, there are also some drawbacks:

- You must handle shipping and customer support yourself.
- It can be difficult during busy times.
- It requires more effort to fulfill orders.
- You may not have access to customers unless you use Seller Fulfilled Prime.

You can use both Fulfillment by Amazon and Fulfillment by Merchant together.
Amazon allows sellers to list products using both methods.Many experienced sellers use this approach to ensure product availability and reduce business risks.

For example, you may keep most of your products in Amazon's fulfillment centers and some in your own warehouse.
If your inventory in Amazon's centers runs out, you can still sell from your warehouse.This strategy helps prevent lost sales when inventory is low.

Using both Fulfillment by Amazon and Fulfillment by Merchant offers several benefits:

• You can avoid running out of stock. Combining both methods allows you to continue selling even when your Amazon inventory is low.
• You can reduce fulfillment costs. Some products may be cheaper to fulfill with Fulfillment by Merchant, especially if they are large or heavy. A hybrid approach lets you choose the best method for each product.
• You can manage seasonal demand. During holidays or busy sales periods, Fulfillment by Amazon offers fast shipping and customer confidence. You can move more inventory to Fulfillment by Merchant to cut storage fees during off-peak times.
• You can be more flexible with your inventory. Splitting your inventory between both methods reduces your reliance on one system and allows you to quickly respond to unexpected demand.
• You can reach more customers. Fulfillment by Amazon gives you access to Prime shipping, while Fulfillment by Merchant lets you keep selling your products even when your Amazon inventory is low.

Let's say you sell stainless steel water bottles.
You send 400 bottles to Amazon using Fulfillment by Amazon.You keep 150 bottles in your warehouse for Fulfillment by Merchant.When your Amazon inventory runs low or runs out, your warehouse inventory keeps the product listing active until Amazon receives more stock.Customers can still buy your product, which helps you avoid losing sales.

Some of the best ways to use Fulfillment by Amazon and Fulfillment by Merchant together include:

• Monitoring your inventory regularly.
• Using inventory management software.
• Calculating all fulfillment costs to decide the most cost-effective method for each product.
• Shipping products quickly and providing good customer service for Fulfillment by Merchant orders.
• Reviewing Amazon's fees regularly to determine which method is more profitable.

Use Fulfillment by Amazon if:

• You sell popular, fast-selling products.
• You want your products to qualify for Amazon Prime shipping.
• You need to grow your business quickly.
• You sell lightweight, popular products.

Use Fulfillment by Merchant if:

• sell large or heavy items.
• have your own warehouse.
• prefer to manage every step of order fulfillment yourself.
• You already use a third-party logistics provider.

Is a hybrid strategy right for your business?

A hybrid strategy works well if:

• You want to reduce the risk of running out of stock.
• You sell products that are popular during certain times of the year.
• You sell products that come in different sizes or have varying profit margins.
• You need to be more flexible with your inventory.
• You want to cut fulfillment costs while keeping your customers happy.

Many successful Amazon businesses use this approach.

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