FBA/FBM Failover Strategy for Amazon Sellers

Created by Greg Airel, Modified on Fri, 02 Feb 2024 at 01:45 PM by Greg Airel



## FBA and FBM Strategy for Amazon Sellers


### Introduction

The FBA and FBM strategy, employed by the speaker on various brands over the years, is regarded as a smart approach to navigating the Amazon marketplace.


### Acknowledgment

While the strategy may not universally suit every brand, its efficacy in addressing issues associated with Fulfillment by Amazon (FBA) is noteworthy.


### Inventory Issues with FBA

Selling through FBA inevitably leads to inventory challenges. This strategy aims to provide a solution for such situations.


### Failover to FBM

To ensure a continuous sales flow, the speaker advocates for the setup of a failover mechanism to Fulfillment by Merchant (FBM).


### Illustration with Products

The strategy is exemplified using identical products distinguished by different Stock Keeping Units (SKUs), with an emphasis on clear labeling for internal communication.


### Failover Mechanism

In the event of an FBA product running out of stock, an automatic failover to FBM is triggered, leveraging a shipping pallet warehouse.


### Algorithmic and Ranking Benefits

Beyond just addressing inventory issues, the strategy contributes to maintaining algorithmic standing, preventing a loss in sales rank during disruptions.


### Inventory Management

The approach involves keeping inventory at zero for both FBA and FBM products during periods of inactivity.


### Setting Up FBM

Copying the FBA product, adding a prefix, changing it to "fulfilled by the manufacturer" (FBM), and maintaining the same price are key steps in implementing the strategy.


### Shipping Template and Buy Box

Application of a shipping template with a small order fee for the FBM product ensures competition for the buy box only when the FBA product is unavailable.


### A/B Testing and Pricing Strategy

To optimize the order fee, A/B testing is recommended, taking into consideration the product's value to avoid friction during the checkout process.


### Shipping Template Options

The flexibility of the strategy extends to shipping template options, including domestic, regional, expedited, and international (if enabled).


### Buy Box Dynamics

The FBM product secures the buy box exclusively when the FBA product is out of stock, providing a seamless customer experience.


### Dual Benefits and Conclusion

The strategy not only offers algorithmic support but also keeps the brand consistently in stock, ensuring continuity and customer satisfaction.

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