3 Reasons to Merchant Fulfill an Item on Amazon Instead of Using FBA

Ever wonder why someone would decide to merchant fulfill an order on Amazon instead of using Fulfillment by Amazon?

For the majority of the items we sell, using FBA allows us to maximize sales and increase profits. But there are certain situations where the opposite is true and fulfilling our own orders will get us more sales. Don’t commit yourself to only using one option – use the one that will help you generate the most profit.

We sell millions of dollars worth of products on Amazon each year. Based on this experience, we have three main situations where we’ll merchant fulfill instead of using FBA. This post will walk you through all four, in order of how often they occur in our business.

What is “Merchant Fulfilling”?

If you aren’t familiar with the term “merchant fulfillment”, it just refers to third-party sellers who are shipping directly to the buyer. In other words, anyone who isn’t using FBA is merchant fulfilling.

You may also hear this referred to as Fulfillment by Merchant or Seller Fulfilled.

Here is a complete guide on merchant fulfilling and how to manage your merchant fulfilled orders.

Reason to Merchant Fulfill #1: Q4 & Other “Demand Deadlines”

The vast majority of the merchant fulfilling that we do in my business comes in Q4. 

At a certain point, demand for holiday gifts is still sky-high but there isn’t time to send more inventory to FBA warehouses and still have it processed in time to ship before the holidays.

December is the month where we do the majority of our merchant fulfillment.
December is the month where we do the majority of our merchant fulfillment.

You can think of this as a “demand deadline”. While you could ship the item into FBA, it’s not going to be available to buy until after the period of heavy demand is over.

The peak example of this is the last few weeks before Christmas, but we’ve found that there are many other examples throughout the year. 

For example, if you get good inventory right before the Black Friday and Cyber Monday shopping spree, it may be worthwhile to put it up as merchant fulfilled so that it’s available during that surge in demand.

The same is true for other major holidays. It can even be true for seasonal items that are about to go out of season.

Some things that will fit in those categories will be better sold locally. This is especially true if the deadline is so close that you won’t be able to get it delivered before the deadline. We’ve found the Facebook Marketplace is the optimal place for local sales now. 

If you are interested, here is a guide to selling via Facebook Marketplace.

Reason #2: No FBA Stock

The second reason we’ll decide to merchant fulfill an item we’re selling on Amazon is when we look at the listing and see that there is no FBA stock.

This is another situation that seems to happen more often in Q4 than other times of the year, but it can happen any time where the normal FBA sellers run out of inventory.

Even better is when there is no stock at all!

Screenshot of Out of Stock Crocs on Amazon
Here is an example: Amazon is currently out of stock of many Croc colors for the size “11 Women / 10 Men”.

Assuming you are targeting items with a good sales rank, it is unlikely that an item will stay out of stock for FBA for long. By offering some of your units for sale merchant fulfilled, you can take advantage of the gap between when you have your inventory and when FBA units are available again.

If you have multiples of a unit, a good strategy is to offer some via merchant fulfilled while sending the rest in for FBA. That way you get the best of both worlds. If your FBA units get available before you sell through the units you held for merchant fulfilled, you can send the rest in a later shipment.

Reason #3: You’re not allowed to sell the item via FBA.

The third reason we’ll decide to merchant fulfill an item is because using FBA just isn’t an option.

This is rarely the case, but it does happen.

One of the most common examples of this is when an item will “expire” within 90 days of arriving at a fulfillment center. Amazon is very strict about this, and trying to get around this policy will not work.

Check expiration dates closely when sourcing for the same reason!

Here’s what Amazon says about expiration dates:

“At the time of check-in at the fulfillment center, all products must have a remaining shelf life that allows sufficient time for the product to be consumed in full plus an additional 90 days. For example, a bottle of supplements with 240 daily servings must have a remaining shelf life of 240 days plus an additional 90 days at the time of check-in at the fulfillment center.”

You can read more about Amazon’s expiration date policy on Seller Central.

Another situation of not being allowed to sell an item on Amazon is meltable items during the warmer months. According to Amazon, they’ll only accept meltable products for FBA between October 16 and April 14.

Yes another reason we may merchant fulfill an item is if it’s considered a hazardous material by Amazon. Some items Amazon won’t accept at FBA warehouses, but are just fine to merchant fulfill.

You can read more about their FBA restrictions here.

We don’t sell a lot of items that aren’t eligible for FBA. When we do, we’re more likely to use a different marketplace than try to sell via Amazon. 

The same is true for oversized items that are too expensive to use FBA for. If it’s too expensive to ship via FBA, there’s a good chance shipping direct will be very expensive too and you can probably get more profit by selling locally.

Why Do You Merchant Fulfill?

If you have any questions about merchant fulfilling or would like to share the reasons why you choose to ship direct to your customers, let us know in the comments below. Your thoughts and comments help others, so let’s hear them!

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