Amazon FBA & FBM

Amazon FBA (Fulfillment by Amazon) and FBM (Fulfilled by Merchant) are the two fulfillment methods available to every Amazon seller. The difference is who handles storage, packing, and shipping.

With FBA, you ship your inventory to Amazon’s warehouses. Amazon stores your products, fulfills each order, and handles returns. With FBM, you or a third-party logistics provider handles all of that yourself. You can assign different fulfillment methods to different products and switch between them at any time.

FBA in Detail

With FBA, your listings automatically earn the Prime badge, giving access to Amazon’s fastest-converting buyer pool. Prime-eligible listings tend to convert at higher rates than non-Prime offers and win the Buy Box more often when pricing is competitive.

The tradeoff is cost. FBA fees include:

Fulfillment fees. Charged per unit, based on size and weight. Lightweight products under 2 lbs are generally cheaper to fulfill through FBA because Amazon’s bulk carrier rates are difficult to match individually.
Monthly storage fees. Charged for inventory held in Amazon’s warehouses. Slow-moving products accumulate these costs quickly.
Inbound placement fees. Added when shipping inventory to a single Amazon location. Splitting shipments across multiple locations can reduce or eliminate this fee.
Aged inventory surcharges. Products that sit in Amazon’s warehouse beyond 181 days trigger additional fees. Slow sellers face penalty costs sooner than many new sellers expect.

These fees mean FBA works best for lightweight, fast-moving products with strong margins. For heavy, bulky, or slow-moving items, fees can erode profitability quickly.

FBM in Detail

With FBM, Amazon’s fulfillment and storage fees are eliminated. Sellers control packaging, shipping speed, and the customer experience. Custom inserts and branded packaging are possible with FBM but not with FBA.

The tradeoffs include:

No automatic Prime badge, unless a seller qualifies for Seller Fulfilled Prime (SFP), which requires meeting strict on-time delivery standards.
Amazon’s delivery service level agreements must be met, requiring consistent on-time shipping.
Customer service and returns for FBM orders are the seller’s responsibility.

FBM is the stronger choice for heavy or oversized products, slow-moving items, and sellers who already have warehouse infrastructure or a third-party logistics (3PL) relationship in place.

FBA vs. FBM: Which Is Right for You?

The decision depends on three variables for each product: weight, sales velocity, and margin.

FBA tends to win for lightweight products (under 2 lbs) that sell quickly and carry margins above 25% after all fees. The Prime badge and Amazon’s logistics network provide a conversion advantage that is hard to replicate through FBM for these products.

Instead, FBM might be better for heavy or oversized products, items with thin margins, and slow sellers that would accumulate storage and aged inventory fees in Amazon’s warehouses.

Many experienced sellers use a hybrid approach: FBA for fast-moving lightweight products and FBM (or a 3PL) for everything else. Amazon’s official Revenue Calculator can model the exact cost comparison for any specific product before committing.

Why Are FBA and FBM Important for eCommerce Sellers?

Choosing the wrong fulfillment method directly cuts into profit margins. A product that looks profitable at face value can lose money once storage fees, placement fees, and aged inventory surcharges are factored in.

For sellers expanding from a Shopify store to Amazon, understanding which products suit FBA and which suit FBM prevents costly surprises after inventory is already committed to Amazon’s warehouses.

Frequently Asked Questions

Which is better for beginners, FBA or FBM?

FBA is generally better for beginners because FBA means Amazon handles storage, shipping, and returns, removing the need to build logistics infrastructure from scratch. That said, FBA only makes sense when the product is lightweight and fast-moving enough for the fee structure to work in the seller’s favor.

Can you use FBA and FBM at the same time?

Yes, you can use FBA and FBM simultaneously. Many sellers assign different fulfillment methods to different products in their catalog, using FBA for fast-moving, lightweight items and FBM for heavier or slower products. Switching a product’s fulfillment method at any time is possible through Amazon Seller Central.

What is Seller Fulfilled Prime?

Seller Fulfilled Prime (SFP) is a program that allows FBM sellers to display the Prime badge on their listings by meeting Amazon’s strict delivery and performance requirements, including guaranteed 1 to 2-day delivery with high on-time rates. SFP combines the cost savings of FBM with the conversion benefit of Prime eligibility, but the performance requirements are demanding and not suitable for all sellers.