Fulfillment by Merchant (FBM) involves managing all aspects of order fulfillment independently, providing greater control over operations while requiring more hands-on management than Amazon's FBA service. How FBM Works: The FBM process begins when customers place orders on Amazon. You receive order notifications through Seller Central and are responsible for processing, packaging, and shipping orders within your stated handling time, typically 1-2 business days. Order management involves confirming orders, updating inventory levels, and preparing products for shipment. You must maintain accurate inventory levels and provide tracking information to Amazon and customers promptly. Fulfillment operations include picking products from your inventory, packaging them appropriately, generating shipping labels, and arranging pickup or drop-off with shipping carriers. Customer service responsibilities include handling inquiries, managing returns, and resolving any issues that arise. You maintain direct control over the customer experience throughout the entire process. Key Advantages of FBM: Higher profit margins result from avoiding FBA fees, which can range from $3-15+ per item depending on size and weight. FBM sellers typically achieve 10-20% higher profit margins than FBA sellers. Greater control over operations allows you to customize packaging, include marketing materials, control shipping methods, and provide personalized customer service that builds brand loyalty. Flexibility in inventory management enables you to store inventory anywhere, adjust stock levels quickly, and avoid Amazon's storage limitations and long-term storage fees. Reduced dependence on Amazon's systems protects your business from FBA capacity limitations, policy changes, and service disruptions that can affect FBA sellers. Understanding the Challenges: Operational complexity requires managing inventory, fulfillment, shipping, and customer service systems. FBM demands more hands-on management and operational expertise. Shipping cost management becomes crucial as you're responsible for negotiating rates and optimizing shipping methods. Poor shipping cost management can eliminate profit advantages. Customer service requirements include handling all inquiries and issues directly. You must maintain high service standards to compete with Amazon's customer service reputation. Performance standards must be maintained across metrics like order defect rate, late shipment rate, and customer service response times. Poor performance can impact Buy Box eligibility and account health.