When selling on Amazon, choosing between Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) involves understanding how each fulfillment method works and avoiding common mistakes. Whether using FBA, where Amazon handles logistics, or FBM, where sellers manage their own shipping and customer service, certain pitfalls can hurt your success on the platform. Below are the common mistakes to avoid with both FBA and FBM.
Common Mistakes with FBA
1. Overstocking or Understocking
One of the most common mistakes with FBA is improper inventory management. Overstocking products can lead to high storage fees, especially for long-term storage, while understocking can result in stockouts, leading to lost sales and negatively affecting your seller ranking. Monitoring your inventory levels carefully and forecasting demand is essential to avoid these issues.
2. Ignoring FBA Fees
FBA comes with various fees, including fulfillment, storage, and removal fees. Some sellers neglect to account for these costs when pricing their products, which can eat into profits. It’s important to fully understand FBA fees and factor them into your pricing strategy to ensure profitability. Regularly review Amazon’s fee structure and adjust your product prices if necessary.
3. Poor Product Packaging and Labeling
Amazon has strict guidelines for product packaging and labeling. Failing to comply with these standards can lead to delays, additional fees, or your products being rejected by Amazon’s fulfillment centers. Make sure that all products are properly labeled with the required barcodes, and that packaging meets Amazon’s requirements to avoid problems with fulfillment.
4. Not Optimizing for Amazon Prime
While FBA makes your products eligible for Prime, simply having the Prime badge is not enough to maximize sales. Sellers often neglect to optimize product listings to take full advantage of the Prime offering. Make sure your listings are well-optimized with high-quality images, compelling product descriptions, and relevant keywords to attract Prime shoppers.
5. Ignoring Customer Feedback and Reviews
With FBA, Amazon handles customer service, but sellers should still monitor customer feedback and reviews closely. Negative reviews or poor seller ratings can harm your product’s visibility and overall ranking. Make sure to address any customer complaints promptly, and use feedback to improve your product and customer experience.
Common Mistakes with FBM
1. Inconsistent Shipping Times
FBM sellers are responsible for handling their own shipping. Inconsistent or slow shipping times can lead to poor customer satisfaction and negative feedback, which can hurt your Amazon seller ranking. It’s important to offer competitive shipping speeds and meet the shipping timelines promised in your listings to maintain a good reputation.
2. Poor Inventory Management
Just like with FBA, improper inventory management can cause stockouts or excess stock, but with FBM, the responsibility entirely rests on the seller. Stockouts can lead to penalties and loss of the Buy Box, while overstocking ties up capital and can increase storage costs. Implementing a solid inventory management system is essential for FBM sellers.
3. Inadequate Customer Service
FBM sellers are responsible for managing customer service, including handling returns and addressing customer inquiries. Slow or unprofessional customer service can result in negative reviews and ratings, which affect seller performance metrics. Ensure that you have a responsive system in place for customer service, and resolve issues quickly to maintain high ratings.
4. Not Meeting Amazon’s Performance Metrics
Amazon tracks performance metrics such as on-time shipping, order defect rate, and customer feedback. FBM sellers need to consistently meet or exceed these metrics to stay in good standing. Failure to meet Amazon’s standards can result in account suspension or a loss of the Buy Box. Regularly monitor your performance dashboard and address any issues immediately.
5. Neglecting Packaging Standards
Just because you are fulfilling orders yourself with FBM doesn’t mean you can overlook Amazon’s packaging standards. Poor packaging can result in damaged products, leading to negative reviews and returns. Make sure that your packaging is durable and protects the product during shipping, and adhere to Amazon’s guidelines for packaging and labeling.
Conclusion
Whether you choose FBA or FBM, each fulfillment method requires careful management to avoid costly mistakes. For FBA sellers, effective inventory management, understanding fees, and optimizing product listings are key. FBM sellers need to focus on consistent shipping, customer service, and meeting Amazon’s performance metrics. By avoiding these common mistakes, you can ensure smoother operations, better customer satisfaction, and greater success on Amazon’s marketplace. Get in touch with us for Prep Services FBA.
