Amazon FBA (Fulfilled by Amazon):
1. You create product listings and ship inventory to Amazon fulfilment centres
2. Amazon stores your inventory in their warehouse network
3. When a customer orders, Amazon picks, packs, and ships the order
4. Amazon handles customer service for delivery issues and processes returns
5. Amazon charges you monthly storage fees + per-order fulfilment fees
Amazon FBM (Fulfilled by Merchant):
1. You create product listings
2. You store inventory at your own location (home, warehouse, or 3PL)
3. When a customer orders, you (or your 3PL) pick, pack, and ship
4. You handle customer service for shipping issues
5. You pay for shipping and packaging yourself
The core tradeoff: FBA outsources fulfilment complexity to Amazon in exchange for Amazon's fees. FBM keeps fulfilment in-house or with your 3PL, preserving control and potentially better margins on products where FBA fees are disproportionately high.
FBA automatically qualifies products for Prime. Prime products display the Prime badge, qualify for free 2-day shipping for Prime members, and are prioritised in Buy Box calculation. Prime buyers represent a disproportionate share of Amazon's purchasing power — many Prime members filter search results to show only Prime-eligible items.
FBM products are NOT Prime-eligible by default. However, Amazon's Seller Fulfilled Prime (SFP) programme allows FBM sellers to earn the Prime badge by meeting Amazon's strict shipping performance requirements (2-day delivery to Prime customers, >99% on-time shipping, low cancellation rates). SFP is difficult to achieve and maintain for most sellers.
The Prime eligibility gap is the most consequential difference between FBA and FBM for most sellers.
FBA fees (example — standard size product, 1 lb, ~12"×9"×2"):
- Fulfilment fee: ~$3.00–4.00 per unit
- Monthly storage: ~$0.75–2.40 per cubic foot (varies by season)
- Removal fee (if sending back to you): ~$0.60–1.00 per unit
- Estimated FBA total: $3.75–6.00 per unit per month of storage + fulfilment
FBM costs (same product, self-fulfilled):
- USPS First Class or Ground Advantage: $4.00–8.00 per shipment
- Packaging materials: $0.50–2.00 per unit
- Labour time: varies widely
- Estimated FBM total: $4.50–10.00 per unit shipped
For standard-size products, FBA and FBM total costs are often comparable when you account for packaging and labour in FBM. FBA becomes cheaper at scale where fulfilment efficiency matters. FBM can be significantly cheaper for oversized items where FBA adds size-based surcharges.
Use FBA when:
- Products are standard size (under 18" per side) and light
- Turn rate is good (inventory won't sit for months, accumulating storage fees)
- Prime eligibility is important for category conversion
- You don't have warehouse space or want to scale without building fulfilment capacity
Use FBM when:
- Products are oversized (furniture, large home goods) where FBA fees are very high
- Inventory turns slowly (seasonal products where storage fees accumulate)
- You have negotiated better carrier rates than Amazon can offer
- Products are dangerous goods or restricted from FBA
- You want a backup fulfilment method when FBA inventory runs out
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Try Sellable free →FBA as primary fulfilment for most new Amazon sellers selling standard-size consumer goods. The Prime eligibility and operational simplicity justify the fees until you're at a scale to optimise.
FBM as a backup for all FBA sellers. When FBA inventory runs out or a listing loses Prime status, an active FBM listing keeps the ASIN selling. Having FBM always-on is a best practice for continuity.
Hybrid for experienced sellers with diverse catalogues: FBA for fast-moving SKUs where Prime matters; FBM for slow-moving, oversized, or margin-constrained products.
Products with high monthly storage needs relative to their fulfilment fee benefit: oversized products, hazmat/dangerous goods (many are FBA-ineligible), very heavy items, seasonal products that sit in warehouse for months, and ultra-low-price products where FBA fees eat most of the margin. For a $5 product with a $3.50 FBA fee plus storage, FBA economics are often poor.
SFP is valuable for sellers with large, fast-moving FBM operations who can consistently meet Amazon's strict performance requirements. The requirements are demanding: 99%+ on-time delivery, 2-day delivery to most US zip codes, and low cancellation rates. Most small-medium sellers find the operational requirements too challenging to maintain consistently. SFP is more viable for sellers with established fulfilment operations.
Amazon charges higher storage fees from October through December (Q4 holiday season) — storage rates are roughly 3–4x the January-September rates. FBA sellers should plan inventory carefully to avoid holding excess stock in Amazon warehouses during Q4. Most experienced sellers send Q4 inventory in September and aim for inventory to be mostly sold by late December.
Yes. You can have the same product listed on both FBA (from Amazon warehouse) and FBM (from your warehouse) simultaneously. Amazon typically shows the FBA listing to buyers first if stock is available. Many sellers maintain FBM listings as a backup specifically for when FBA stock runs low — the FBM listing prevents the ASIN from showing as "temporarily unavailable."
No. Reviews are tied to the product ASIN, not the fulfilment method. Switching from FBM to FBA does not affect existing product reviews. Positive customer experience from FBA's fast, reliable shipping may increase review rates and ratings going forward, but there's no negative impact on existing reviews when switching fulfilment methods.
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