When it comes to Amazon fulfillment for your e-commerce store, the most obvious question is which fulfillment option you should choose: FBA or FBM.
While Fulfillment by Amazon offers sellers convenience at a higher cost, Fulfillment by Merchant (FBM) lets sellers personalize fulfillment through a unique set of advantages that can help your Australian business scale.
We’ll explore the benefits of managing your own fulfillment, the advantages of partnering with a 3PL (Third-Party Logistics) provider, and key strategies to optimize your FBM journey on Amazon Australia. Let’s jump in!
Amazon for Australian Sellers
Since its launch in Australia in 2017, Amazon has undoubtedly reshaped the Australian e-commerce landscape. While the exact percentage of total Australian online sales remains under wraps (estimates suggest around 8% in 2023), Amazon’s influence is undeniable and continues to inch towards market domintion.
- Explosive Growth: The number of Australian sellers on Amazon has skyrocketed, creating a vast online marketplace teeming with diverse products. This translates to a wider audience and significant sales potential for Australian businesses. (ADD STAT)
- Convenience for Consumers: Australian shoppers have embraced the ease and familiarity of the Amazon platform. They enjoy access to a massive selection of products, competitive pricing, and the convenience of Prime membership benefits like fast and free shipping.
Fulfillment for Amazon Stores: The Key to Success
The role of fulfillment in e-commerce success cannot be overstated. Fast, reliable delivery is crucial for customer satisfaction and repeat business. Here’s how Amazon helps merchants offer e-commerce fulfillment:
- Fulfillment by Amazon (FBA): This comprehensive service allows Australian sellers to leverage Amazon’s vast network of fulfillment centers. Amazon handles storage, picking, packing, shipping, and even customer service inquiries, freeing sellers to focus on product development and marketing.
- Fulfillment by Merchant (FBM): Australian sellers also have the option to manage fulfillment themselves or through a 3PL (Third-Party Logistics) provider. This Amazon fulfillment option offers sellers better control over inventory storage, branding, shipping methods, and the room to potentially lower costs.
Impact Of Fulfillment On Amazon Store Sales
In a highly competitive marketplace like Amazon, which attracts millions of shoppers, sellers vie for customer attention. Fulfillment goes beyond just getting products from Point A to Point B. It’s the silent force that can significantly impact your store’s success, influencing everything from converting intent into sale, increasing profit margins and amplifying brand perception.
Optimizing Business Operation Costs:
- Strategic Inventory Storage: Efficient fulfillment strategies, like leveraging Fulfillment by Merchant (FBM), allow you to distribute inventory in scalable storage infrastructure. This lets you optimize storage space, potentially reducing inventory storage costs and freeing up capital for other business investments.
- Reduced Costly Overhead: Outsourcing fulfillment to a 3PL expert can eliminate the need for in-house storage and packing infrastructure, leading to lower overhead costs and potentially increasing your profit margins.
Championing Your Brand Identity from Warehouse to Customer:
- Enhanced Packaging: With FBM (Fulfillment by Merchant), you have complete control over custom packaging. This allows you to specify the right package dimensions, the type of fillers, branding on the package. With custom packaging, inserts, or even handwritten notes, brands selling on Amazon can use fulfilled by merchants to tailor an improved fulfillment and unboxing experience, fostering customer loyalty and brand recognition.
Multiple Carriers for Diverse Customer Needs:
- Faster Delivery Options: Amazon sellers can offer shoppers a wider range of faster shipping options by utilizing multiple carriers through FBM or partnering with a 3PL (third-party logistics) provider. This helps sellers convert more high-intent shoppers, especially during peak sales periods or time-sensitive promotions.
- Reduced Shipping Costs: Negotiating with multiple carriers can unlock competitive shipping rates, helping sellers create great value deals for shoppers, increasing sales possibilities and reducing abandoned carts.
Storage Infrastructure for Multi-channel Selling:
- Streamlined Inventory Management: Fulfillment solutions like FBM offer centralized infrastructure to help them sell on multiple platforms like Shopify, eBay, WooCommerce, TikTok Shop and custom website while monitoring sales, and stock from one powerful dashboard.
Scalable Inventory for Growth-Minded Amazon Sellers:
- Adaptable Storage: When a 3PL powers FBM, sellers get warehouses that provide scalable storage solutions. This helps sellers adapt to demand fluctuation, strengthen the supply chain, and manage changing inventory needs. It eliminates the need to constantly invest in additional storage space as your business grows, ensuring you’re always prepared to meet customer demand.
- Reduced Stockouts, Increased Sales: Effective fulfillment minimizes the risk of stockouts, ensuring you never miss a potential sale due to low inventory. Receiving timely alerts through round the clock stock monitoring helps you serve your Amazon customers with products to sell everytime they visit your online store.
FBM vs. FBA: The Difference
| Feature | Fulfillment by Merchant (FBM) | Fulfillment by Amazon (FBA) |
| Storage & Inventory Management | Seller is responsible for storage, packaging, and shipping | Seller sends inventory to Amazon warehouses. Amazon handles storage, picking, packing, and shipping. |
| Fulfillment Costs | Potentially lower overall costs, especially for smaller or bulkier items. Requires negotiation with carriers and potential investment in storage space. | Fixed FBA fees per item stored and shipped. Potentially higher overall costs for some sellers. |
| Branding & Customization | Seller has complete control over packaging and branding. | Generic Amazon packaging used. |
| Shipping Options | Seller can choose from a variety of carriers and offer a wider range of shipping options. | Limited shipping options based on Amazon’s network. |
| Scalability | Flexible storage solutions. Seller scales storage space up or down as needed. | Storage space depends on Amazon contracts. |
| Control | Seller has greater control over all aspects of fulfillment. | Seller relinquishes control over storage, picking, packing, and shipping. |
| Ideal for | Sellers who prioritize brand control, cost-effectiveness, and a wider range of shipping options. | Sellers who value convenience, fast and reliable delivery through Prime, and a large fulfillment network. |
Benefits Of FBM For Australian Sellers
While Fulfillment by Amazon (FBA) offers convenience, Fulfillment by Merchant (FBM) empowers Australian sellers with a unique set of advantages, granting them greater control and the potential for significant cost savings. Here’s how FBM can unlock the full potential of your Australian Amazon store:
1. Craft a Memorable Brand Experience: With FBM, you have complete control over packaging. Opt for using branded boxes for packaging, fillers of your choice, and even include handwritten notes. This personal touch creates a lasting impression on Australian customers, fostering brand loyalty and setting you apart from competitors reliant on generic FBA packaging.
2. Greater Control Over Inventory Management: Managing your own inventory allows for tighter control over inbounding and put-away. You can optimize inventory storage within your chosen warehouse or utilize a 3PL partner who caters to Australian sellers’ needs. This level of control ensures your products are stored efficiently, organized by batch and sellable treshold for efficient retrival and dispatch. Avoid potential delays and make sure that products with stable shelf life reach your customers while fulfilling orders received via your Amazon online store..
3. Faster Delivery Options: As an Australian seller with FBM, you’re not limited to Amazon’s fulfillment network. Storing inventory across different warehouse location and partnering with a local 3PL provider that gives you access to a variety of top Australian last-mile carriers lets you offer your Amazon store customers faster shipping options. This caters to Australian customers who might prioritize speedy delivery, potentially increasing conversions and customer satisfaction.
4. Cost-Effective Approach for Australian Businesses: FBM can be a significantly cheaper option compared to FBA, especially for Australian sellers with lower storage needs or bulkier items. You avoid Amazon’s storage fees, potentially leading to higher profit margins. Additionally, negotiating shipping rates with multiple carriers can unlock competitive deals compared to FBA’s standardized fees.
5. Flexibility for Sellers of All Sizes: For Amazon Sellers who do not meet Amazon’s average sales or inventory requirements, fulfilled by merchant is a better Amazon fulfillment alternative. FBM allows you to start selling on Amazon Australia regardless of sales volume with inventory storage and fulfillment solutions. This is ideal for new businesses or those with seasonal products, allowing you to test the waters and scale up as the demand for the product you sell consistently picks up.
6. Seamless Multi-Channel Integration: Selling on multiple platforms? Partner with a 3PL provider experienced in the Australian market. They can manage inventory across all your sales channels, like Shopify, eBay, WooCommerce, your own website, and other top Australian marketplaces. This eliminates the need for multiple storage infrastruction for inventory and simplifies operations, allowing you to focus on growing your brand across multiple channels.
The Better Choice: Amazon FBM With A 3PL
While FBA offers convenience, its limitations can stifle growth. Generic packaging limits branding, FBA fees can eat into profits, and restricted shipping options hinder your ability to meet customer needs. FBM with a 3PL provider offers a powerful alternative.
You gain control and flexibility of in-house fulfillment, allowing for custom packaging and can offer fast, reliable and low-cost shipping through a 3PL.. Faster delivery options become possible through a strategically located 3PL network. Scalable storage adapts to your growth, and multi-channel integration simplifies inventory management across all your sales channels.
Ditching the in-house hassle of fulfillment frees you to focus on core business activities while the 3PL leverages their expertise and infrastructure to ensure efficient and accurate order fulfillment. FBM with a 3PL empowers you to take control, optimize costs, personalize your brand, and achieve efficient growth on Amazon Australia.
FBM With Locad
Choosing the right 3PL partner is crucial for unlocking the true potential of FBM on Amazon Australia. Look no further than Locad – your one-stop solution for streamlined fulfillment and exceptional customer experiences.
Locad: Your Australian 3PL Partner
With Locad, your Amazon online store gets best in class storage and shipping. Here’s how Locad elevates your FBM experience:
Locad lets Amazon sellers utilize a network of strategically located warehouses across Melbourne, Sydney, Perth and Brisbane to cater to local and internationl Amazon orders.. This distributed inventory model ensures faster fulfillment through warehouses located closer to major urban cities, cuttiong down shipping zones, reducing shipping costs and delighting shoppers, within and outside Australia.
Our cloud-powered Locad Logistics Engine is your secret weapon. It offers complete visibility into all the orders, and offers real-time inventory monitoring,, ensuring you never miss an orderor an opportunity for sale. Additionally, the engine identifies the most cost-effective carrier option for each order, potentially leading to significant savings on shipping costs.
Moreover, though automation is powerful, sometimes, a personal touch goes a long way. Locad offers manual handling services for customized bundling, kitting (assembling product sets), and seasonal promotions. This allows you to create unique customer experiences that enhance your brand image and set you apart from the competition.
Additionally, Locad powering your FBM operation helps you to craft a unique brand identity through custom packaging. Locad understands the power of branding and helps you personalize the fulfillment journey from the warehouse all the way to customer’s porch.
Conclusion
The choice between FBA and FBM for the best Amazon Fulfillment Option, ultimately depends on your specific needs and goals. However, for Australian sellers seeking a fulfilled by Amazon alternative, fulfilled by merchant gives sellers greater control, brand identity, and cost-efficiency, FBM with a strategic 3PL partnership can be a game-changer, by helping Amazon sellers outsource the entire fulfillment process to an Australian 3PL company that offers great nation wide coverage to speed up fulfillment and optimize shipping costs.
Partner with Locad today and scale your Australian business to newer heights! Sign up now.
