When I first started selling on Amazon, it took me a while to get the hang of it — how it works, how to boost sales, and how to sell more print on demand products.
One thing that I quickly realized is that the way to sell products on Amazon is quite different from selling on other marketplaces such as Etsy.
This was one change that I had to get accustomed to.
When getting started, making sales on Amazon might be slower than making sales on Etsy. But when you have many FBA products, you will make a lot more sales.
In fact, when you begin to make some products FBA, you can make much more sales than you would on Etsy.
One of the most popular ways to earn income online is through Amazon FBA.
When it comes to making sales on Amazon, there are two primary methods that sellers make use of on the platform. They are Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM).
In this article, we’d analyze both strategies by highlighting their pros and cons. This way, you would understand both methods in-depth and determine which of them would be more profitable for a print on demand business.
FBM vs FBA
So, let’s start with both concepts’ basics, then we’d build up to discussing the bone and the bane of using each method.
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FBM – Fulfilled by Merchant
The Fulfilled by Merchant model involves Amazon sellers storing and shipping items on their own or outsourcing fulfillment to a 3rd-party that is not Amazon.
You, as the seller, would be responsible for meeting Amazon’s service levels about shipping and orders. Also, sellers using the FBM method must provide customer service and returns processing for all FBM orders.
In other words, sellers would have to produce and ship a product by themselves to their customers.
Anyway, as a print on demand seller, we use a supplier to make and ship a product. These suppliers can be considered as 3rd party agents that would be used for the fulfillment of product orders.
The Good Things about FBM
1. No upfront cost incurred
As a POD seller, you only get to pay for the production when you get an order.
So, you don’t have to spend money from your pocket making products beforehand in the hope that you’d get orders.
You only get to pay the supplier when orders come in. This way, you wouldn’t incur any upfront cost.
2. More control and flexibility
Sellers have more control over inventory. This means that they can access and update inventory anytime.
Let’s say you want to ship 1,000 coffee mugs to your customers. With the FBM, Gearbubble or Printful is your best bet. You can sell as many units as you like because the product would be made by orders received.
The Bad Things about FBM
1. Lower ranking than FBA products
Simply put, there are fewer SEO Perks for FBM. This is because FBA enjoys a slight boost in search results compared to FBM products.
Don’t get me wrong, FBA isn’t a magic formula that will make keyword ranking and SEO ridiculously effortless, but it does help gain a slight edge.
More visibility means traction too. So, if the FBM lists are not ranking well, the traction would be lesser too.
2. Amazon Prime Members prefer products with the Prime Badge
Most Amazon Prime members would rather go for products with the prime badge than those without it. This means that FBM products would get a bias disinterest from this chunk of buyers.
3. Customer service and returns responsibilities
FBM means that you get to handle everything about the Fulfillment, including follow up, customer service, and returns. This might take a lot of time.
It’s not always a bad thing, though. Because it can get you better accustomed to your customers’ needs and demands, this can give you valuable insights that can guide your business process moving forward.
FBA – Fulfilled by Amazon
This is statistically the most used method for sale by most Amazon sellers. By FBA, we mean Fulfilled by Amazon.
In simple terms, “you sell it, and Amazon ships it.”
As a seller, your job is to send bulk products to Amazon’s fulfillment centers. Then, Amazon would pick, pack, and ship products once it is sold.
You would create your product lists while Amazon everything on storage and all aspects of order fulfillment.
Enrolling in the FBA program means that you’re taking advantage of Amazon’s innovative technology and automation system.
Enjoy the benefits of Amazon’s advanced shipping and fulfillment services and earn more sales from their coveted Prime customers.
But before we look at whether the FBA will be a profitable method for your POD business, you need to understand how it works.
- STEP 1
It all begins with booking a ticket to Mars on a commercial space ship.
Just kidding!
It starts with you ordering your products from cheap sources. Most POD sellers often buy products such as mugs or travel mugs from Alibaba or AliExpress at a cheaper cost. Then let them make and ship your products to Amazon Fulfillment Center.
You have to create a shipment on Amazon. Currently, there are around 100 warehouses in the U.S. Once you create the shipment in Amazon, they will tell you where to send your items according to the type of products you’re selling.
- STEP 2
As soon as your goods arrive at the designated Amazon warehouse, the warehouse employees will sort your merchandise and store it with a code. Thereof been reports of Amazon making use of robot assistants for tracking their inventories. Cool!
Although incidents of loss or broken goods are quite rare, Amazon will reimburse you if something does happen to your products.
- STEP 3
Once a customer places an order for one of your items, Amazon will locate it and pack it. Automatically, your inventory will update as one down. Amazon would then ship the desired good(s) to the customer using whatever method the customer has chosen.
During the process of the shipment, both you and the customer will be able to track the product.
- STEP 4
Amazon would handle other important aspects of the business, such as customer support and returns.
Amazon would send in the payment for all the sales made through the Amazon FBA method once every two weeks.
Amazon FBA is not only restricted to the fulfillment of goods from Amazon alone. You can also use the FBA to fulfill orders from other e-commerce platforms, like eBay and Etsy, and even for your own website.
The Good Things about FBA
1. Easy logistics and shipping process
Have you ever tried to manage your own fulfillment? It can be very time-consuming, especially when you have to make a ton of orders.
Now, the holidays are here! As POD sellers, holidays are the gold mine of print on demand sales. Now, if you play your cards right, you would be making many orders, and the suppliers will receive many orders from other sellers.
This might cause some delay in the production as well in the shipment of the products.
But this is not the case with Amazon. Regardless of the holiday rush-hour mode, you can still send the products in bulk to Amazon, and Amazon has the best logistics in the world, and they can ship the item fast, even within a day.
2. Discounted shipping rates.
Amazon has contracts with major shipping carriers. This gives them huge discounts on shipping costs. In turn, Amazon returns the favor by passing these discounts to FBA sellers in the form of reduced shipping prices. FBA customers also enjoy free shipping benefits.
Additionally, Prime members get to enjoy free two-day shipping on all FBA products. This serves as a huge incentive which often translate in higher sales rate.
3. Seamless Management of returns.
Honestly, processing returns can be a pain in the ass! As if getting a negative review is not bad enough, you still get to deal with upset customers, inspect returns, and handle all administrative aspects.
But that’s if you’re an FBM seller. Amazon takes care of all of that for FBA sellers.
Amazon is responsible for managing customer inquiries, returning shipping labels, and reverse logistics. Although they charge a returns-processing fee, I would say it’s worth it for the amount of work they take off your shoulders.
4. Customer service management
If there’s one thing Amazon is known for, it’s their excellent customer service. With 24/7 support via phone, chat, and email, what could go wrong!
Not only does this put your customers in good hands, but it also takes a huge load off your plate. Wouldn’t you like that?
5. Quick delivery
There are hundreds of fulfillment centers all over the world owned by Amazon. So, wherever your customers are, you can be rest assured that they would get what they ordered within a couple of days.
Once a customer places an order, Amazon automatically figures out which fulfillment center is closest to the customer. From there, they ship the order in no time. This makes product shipping much faster.
6. Amazon prime members love FBA
Today, Amazon has over 300 million active customers. Out of this staggering figure, 90 million of them are Prime subscribers in the U.S. alone.
And yes, the brands available specifically to Prime buyers are majorly those who use FBA. Prime customers spend much more money with Amazon than regular customers.
For instance, the average customer spends about $700 per year on Amazon. However, Prime customers can spend as high as $1,300 per year. So, if you use Amazon FBA, then you make more money from prime buyers.
Amazon offers several benefits to Prime customers, such as a discount, lower or no shipping fee, etc. So, Amazon Prime members get special benefits with products with the Amazon Prime Badge.
And to avoid any doubt, FBA products have the Amazon Prime Badge. The best part about this is that you can even charge more. I sold many mugs at $24.95 each in the last Q4. They sold out fast!
7. SEO Perks
For some reason, FBA products often enjoy a higher ranking on search results. This boosts sellers’ visibility and makes sales easier.
Now, here’s how it works. FBA products are the ones controlled by Amazon itself. Hence, Amazon would add the SEO score to these FBA listings.
On the other hand, Amazon Prime Products sometimes come with some shipping perks like free shipping or shorter shipping time. This often attracts a lot of customers to it. And more customers mean more sales!
The better your listing performs, the better it ranks.
You can’t get this using FBM!😅
The Bad Things about FBA
Before you get all jumpy, all of Amazon’s stellar 24/7 customer service, the cost of shipping goods to customers, and access to one of the largest and most advanced fulfillment networks in the world comes at a cost. A big one at that.
1. FBA costs money
Let nobody tell you otherwise! Amazon collects fees for both storage fees and fulfillment fees. If you want to minimize your storage fees, then you must ensure that your inventory moves quickly.
You would also need to pay the money upfront for ordering the products in bulk before sending them over to the fulfillment center. If you don’t sell enough, it’s your loss!
2. Over-extended storage fees
I know, the storage fees aren’t that bad. Well, wait until your items sit for over six months, and you have to keep paying.
Amazon is not in the business of storing products. So, if you don’t sell, they’d make sure that you still pay storage fees.
Not all FBA products can be sold so you might have to handle the high storage fees.
3. Starting out might be more difficult than you think
You see, when it comes to working the FBA process, Amazon has several strict guidelines on how it should go.
From product preparation to shipping, everything must be done correctly.
Before sending products to Fulfillment centers, all details must be correctly entered into Amazon’s database, properly labeled, and then shipped to the right warehouses.
It might some time before you get the hang of all the details.
4. Not every product can be sold…even if you make it FBA
It’s a fact! You won’t sell all the products in your inventory. This is why you need to carefully select the products that you want to send to the Amazon Warehouse for FBA.
The way to sell the POD products on Amazon in 2020-2021
Now that you have a working understanding of both processes, I’d give you practical tips to boost your sales of print on demand products on Amazon.
- Use both FBA and FBM. You can leverage the advantages of both methods to build an Amazon POD business empire. Although Amazon FBA has many perks, we cannot totally turn a blind eye towards the use of supplier based shipping system such as Gearbubble and Printful.
- List as many products in many niches as you can using Amazon the FBM method. This way, you will only have to pay for just the design cost. There is no listing fee on Amazon, so you can upload products as many as you want! Put your best foot forward!
- Then wait for the products to be visible on Amazon. Actually, don’t wait, add more products! Keep adding products! Better more than less.
- Pay close attention to your sales metrics. When you begin to get like 2-3 orders from one product, check the traffic (page visit) stats. If many people visit the product page and the orders keep coming in, then order the products in bulk and make it FBA.
- This is a strategy that has made me a lot of money from Amazon. I don’t start selling a product on FBA straight away. I start by listing it on FBM first, then studying how it performs in the POD market.
- If it gains much traction and sales, then it is FBA worthy. You can then order in bulk and shipping to an Amazon Fulfillment center. But, if it doesn’t, then it stays there. This way, you won’t get to spend extra cost on a product that is not selling well by listing it on FBA. This leads to the next point – avoiding accidental sales.
- There are some sales we call “Accidental sales”. This occurs when you get orders from extremely low page views. For instance, getting 5 views and 2 sales. That conversion rate is too high and risky. When a product performs like this in your listing, don’t order it in bulk yet. What you should look out for are the products that are visible to many people. A stat of 50 views+ and 2-3 sales is a good benchmark.
- Most of my sales on Amazon are from FBA products. I have over 100,000 products in my Amazon account, yet most of my sales from the around 50+ FBA products I have. Although I still sell FBM products, the sales are much lower comparing to FBA.
- The more ‘good’ FBA products you have, the more and consistent sales you will be able to make. FBA is a great process that guarantees high-quality fulfillment service.
Conclusion
I have tried to bring this home as much as possible so that you can understand the key features of both methods and how they can influence your business.
Amazon product listing is free, so you still need to list many products. Once you do that, keep your eyes peeled for the ones that sell well and make them FBA. Most people prefer buying FBA products because they get better benefits when they order.
Try to leverage the benefits of both FBA and FBM. With time, you would make great progress and money too.
—Bank K.
