While combining both FBA and FBM fulfillment strategies offers excellent benefits to businesses, it is not without its challenges. Here are a few problems that businesses need to be prepared to resolve when they consider pursuing a hybrid fulfillment strategy:

• Complicated integration: Integrating both strategies can be technologically challenging, since you need to make sure what orders get fulfilled from where and what the threshold is to switch.
• Time intensive: It takes a lot of time to monitor FBA stock levels, pursuing restocking, monitoring FBM stock levels, and making sure your supplier is manufacturing and shipping inventory to the appropriate warehouses.
• Costly mistakes: If you don’t manage using both FBM and FBA appropriately, you could end up paying far more than you need to in fees, or you could lose out on the benefits that using both systems are supposed to provide.

Combining and maintaining FBM and FBA services can be challenging, which is why so many businesses have turned to Quikful for help. We’re experts at hybrid fulfillment, whether it’s combining FBA and FBM, or even combining general China fulfillment with a local warehouse of your choice.

There are a few potential downsides to using FBM instead of FBA. However, many of those downsides can be easily navigated by partnering with a high-quality 3PL, like Quikful:

• No Prime badge: If you don’t use FBA, then you won’t have access to the Prime badge to advertise your products. Conversion rates tend to be lower for products without the Prime badge, though businesses can still find success on Amazon without it. You may eventually qualify for the Amazon Seller Fulfilled Prime badge, though this isn’t usually open to new stores on Amazon.
• Responsible for warehousing and fulfillment services: The most notable downside is that businesses using FBM are entirely responsible for warehousing and fulfillment services. However, if you partner with a knowledgeable fulfillment provider (like Quikful), you can actually end up saving money over FBA.

Yes, businesses that sell on FBM will still have to pay a referral fee when selling on Amazon.

There’s a couple of unique costs to FBM to consider:

• Monthly subscription fee: If you want FBM Pro services, you’ll need to sign up for a monthly subscription (which is $39.99 at the time of this writing). This ends up being a better deal for larger volume sellers, since without this subscription, there is a per-item selling fee.
• Per-item selling fee: If you aren’t on the pro plan, you’ll pay a $.99 per-item selling fee. If you have low sales volumes (like if you sell very expensive products), then this fee might not be an issue. If you have decent sales volume, you’ll likely want to consider the pro plan.
• Referral fee: Regardless of what plan you’re on, businesses still pay a referral fee for items sold on Amazon. The referral fee varies from product to product, so be sure you know the exact costs before you invest in selling on Amazon.

Amazon can’t guarantee the 2-day shipping for products that aren’t sold through their warehouses, which is why businesses that use FBM aren’t eligible for the Prime badge on products they sell.

In addition to the monthly subscription fee, per-item selling fee, and referral fee, businesses should also consider:

• Warehousing fees: Businesses need to consider the costs of storing and managing inventory. They may run their own warehouses, or they may partner with a warehousing partner. 
• Fulfillment fees: Businesses also need to consider the cost of fulfilling products from their warehouses, including what they charge for shipping, if anything, and if they will offer different shipping speeds.

Both warehousing and fulfillment fees are included in FBA, so it’s important to keep these fees in mind when creating an FBM strategy. Most 3PLs (including Quikful), will offer warehousing and order fulfillment services to make this process seamless for businesses.

Ideally, businesses use FBA and FBM, since that gives the most flexibility and benefit. Using FBA allows you to easily take advantage of the Prime badge and offer fast shipping, while FBM supports your store when your FBA inventory sells out. This prevents Amazon for lowering your listing and helps to keep your SEO presence strong.

Amazon Seller Fulfilled Prime is a program that offers the opportunity for businesses using FBM to have the Prime badge next to their products. In order to qualify, businesses have to prove that they can offer 1-2 day shipping to customers, just like they would expect with a typical Prime product. This program isn’t usually available for businesses new to Amazon, and we’ve seen reports that the waitlist for Amazon Seller Fulfilled Prime is extensive. While it’s a nice perk to have (and one that Quikful can help businesses obtain), it’s not something that you should count on any time soon when you start on Amazon.

Since China fulfillment is formally supported by Amazon, there’s no general risk to your account if you choose to use China fulfillment. Our clients have not experienced issues, though it’s possible for businesses to run into problems if they don’t implement and utilize China fulfillment and FBM correctly.

The following brands have shipping lines that are officially supported by Amazon FBM:

• YunExpress
• DHL eCommerce
• WANB Express
• Yanwen
• 4PX
• SFC
• CNE
• JCEX
• Amazon Z-Parcel
• SF Express
• YDH
• China Post

Not all shipping lines within these brands are compatible with Amazon FBM, but all of these brands will at least offer something businesses can use. Be sure to take your time researching the options to determine which shipping line is most ideal for your business.