We are experiencing unprecedented times right now, thanks to COVID-19, and hopefully your Amazon strategy has been nimble enough to react accordingly. Amazon has been making many changes to its US and international marketplaces, often without prior notice to sellers. One of these changes was pushing back guaranteed Prime shipping dates sometimes up to 30 days out – 28 days more than Prime subscribers are used to! Amazon’s fulfillment centers are experiencing unseasonal surges in order volume and have made the commendable decision to prioritize shipping essential goods (e.g. facemasks, hand sanitizers, toilet paper, etc.)
Conversion rates have decreased due to the new delivery windows and although Amazon’s reasoning behind this delay is understandable, it still doesn’t mean you need to twiddle your thumbs while your FBA business grinds to a screeching halt. We have been working with many brands to implement a self-fulfillment, or FBM (Fulfilled by Merchant) strategy to offset the debilitating effects of 30+ day delivery windows. Before we go over how to create an additional offer, let’s quickly review how Amazon’s marketplace is structured between a product (ASIN) and an actual offer.
ASIN VS. OFFER
Every product on Amazon is assigned an ASIN (Amazon Standard Identification Number) and each ASIN can have virtually infinite “offers.” An offer is a specific price offering by a seller for one or more units of a particular ASIN. Amazon has structured their marketplace so that a single ASIN can have multiple offers – see our graphic below. Only one offer can have the buybox at a time though, and the offer with the buybox will typically receive 95%+ of all sales. For the sake of this blog, let’s say the two factors that influence buybox ownership are (1) price and (2) shipping speed.
Typically, an FBA offer with identical pricing to other FBM offers will win the buybox because it has guaranteed 2-day shipping (courtesy of Amazon). We have seen this changing recently with Amazon removing the 2-day shipping windows and have noticed a lot of FBM offers winning the buybox. Why would that happen? FBM shipping times, even if 1-2 weeks, are faster than Amazon’s guaranteed delivery!
THE SETUP PROCESS
Now that you understand how offers work and why we would even consider an FBM offer, let’s go over how to actually create one!
Step 1 – Grab the ASIN(s) you want to create self-fulfilled offers for.
Step 2 – Navigate to the “Add a Product” window in Seller Central (link here) and paste your ASIN(s) into the search bar
Step 3 – After identifying your product, select your condition on the right and click “Sell this product”
Step 4 – Create new FBM-specific SKU, enter offer price, quantity, and select “I will ship this item myself.” We recommend using your original FBA SKU and adding “-FBM” to the end so it is easily identifiable in your catalog and other reports.
Step 5 – Save and finish! Wait a couple minutes and you should see your new FBM offer in your catalog.
CONFIGURING SHIPPING SETTINGS
Since every business is unique and has different handling and shipping times, you will want to make sure you update your shipping settings according to your capabilities. By default, all new FBM offers use what is called the “Migrated Template” for shipping. You can make changes to this shipping template by going into your shipping settings on Seller Central. Some settings you may want to change are:
- Available shipping times such as standard, expedited, two-day, or one-day
- Shipping costs you want to charge to the customer, if any
- Regions you can and cannot ship to (e.g. Alaska, Hawaii, Puerto Rico, etc.)
- Any international shipping options
You can also create multiple shipping templates if you have a wide range of product sizes in your catalog; shipping a TV will demand different shipping settings than shipping an iPhone case.
IMPORTANT NOTES WHEN FULFILLING FBM OFFERS
Contrary to FBA offers, you are now in the hot seat for fulfilling and shipping FBM orders – “Duh Pitted Labs, that’s why it’s called ‘FBM.’” Well, don’t forget that you are also in charge of returns and all customer service for these orders now, in addition to being 100% responsible for any shortcomings on delivery.
Once your FBM offer appears in your catalog, make sure to add your handling time in the “Edit” section of the SKU. This is critical to make sure you have enough time to send orders.
Make sure you have an established return policy since you are now required to at least match Amazon’s return and refund policies (return policy here and refund policy here). Make sure to handle these return requests in a timely fashion as they inevitably come in from customers.
Although it may seem relatively straightforward, properly implementing an FBA/FBM strategy can quickly become complicated, especially for sellers with larger catalogs and diverse product offerings. Contact us today if you’d like to discuss your brand’s unique situation and how to implement your very own FBM offering!