Selling on Amazon requires a well-planned fulfillment strategy, and one of the most important decisions sellers need to make is choosing between Amazon FBA vs FBM.

These two fulfillment methods define how products are stored, packed, and shipped to customers, impacting profitability, customer experience, and operational efficiency. 

Understanding the difference between FBA and FBM is important to choosing the most profitable option for your business. Some sellers prefer the convenience of Amazon FBA, while others opt for merchant fulfilled network MFN to have more control over their operations. 

What is Amazon FBA vs FBM?

Amazon provides two primary fulfillment options for sellers: Amazon FBA and Amazon FBM. In terms of Amazon FBA Fulfillment by Amazon, Amazon stores the seller’s inventory in its fulfillment centers and takes care of order fulfillment, customer service, and returns. 

Amazon FBM Fulfillment by Merchant, sellers store pack, and ship products directly to customers, handling all logistics and customer service independently. 

Each fulfillment method has unique advantages and drawbacks, making it important for sellers to assess their business model before choosing between FBA vs FBM Amazon. 

FBA Order Fulfillment 

Advantages 

Amazon FBA offers a hands-off approach to order fulfillment, allowing sellers to focus on business growth rather than logistics. One of the biggest advantages of Amazon FBA is the ability to access Amazon Prime, which significantly increases visibility and conversion rates. 

Since Amazon manages shipping, sellers benefit from fast and reliable delivery. 

Another advantage is customer service and returns handling. Amazon takes care of inquiries, complaints, and return requests, reducing the workload on sellers. FBA sellers also gain access to Amazon’s vast logistics infrastructure, improving efficiency and customer satisfaction. 

FBA can also enhance product ranking and increase Buy Box eligibility, leading to more sales. Amazon fulfillment sellers enjoy improved storage management, as Amazon’s fulfillment network automatically adjusts stock across multiple locations for faster deliveries. 

Disadvantages

Despite its benefits, FBA comes with significant costs, including storage fees, fulfillment charges, and Amazon FBA FBM costs. Long-term storage fees can add up, especially for slow-moving products. 

Sellers also lose some control over inventory, as Amazon handles warehouse management. This means that customized packaging and inserts are not possible, limiting branding opportunities. 

Additionally, sellers need to adhere to Amazon’s strict FBA compliance rules, which can lead to penalties if not followed. 

FBM Order Fulfillment

Advantages 

For sellers who want full control over their inventory and shipping processes, FBM stands for a more flexible and cost-effective option. 

With fulfillment by merchants, sellers do not have to pay Amazon’s storage fees, making it ideal for low-margin products. 

FBM meaning also extends to brand control, as sellers can customize packaging including inserts, and manage shipping carriers, which can enhance customer experience and build brand loyalty over time. 

FBM is also advantageous for large or bulky products that are expensive to store in Amazon warehouses. Additionally, Amazon merchant fulfilled shipping rates can be lower than FBA fees for certain products, depending on shipping agreements with third-party carriers.

Disadvantages 

The downside of FBM on Amazon is that sellers need to handle everything including order fulfillment, customer service, and returns, which can be time-consuming, especially for high-volume sellers. 

Since FBM does not come with automatic Prime eligibility, sellers may struggle to compete with FBA sellers who offer fast, free shipping. Achieving the Amazon Buy Box is also more difficult for FBM sellers, as Amazon prioritizes products with Prime shipping. 

Key Considerations: Selecting the Right Fulfillment Method

Product Types 

FBA is better for small, fast-moving items that benefit from Amazon’s fulfillment network, while FBM is suitable for large, oversized, or custom-made products that require specialized shipping. 

Personalization and Time Savings

FBM vs FBA allows sellers to personalize packaging, while FBA saves time by outsourcing logistics to Amazon. The choice depends on whether branding or convenience is more important. 

Inventory Management

FBA handles inventory storage and distribution, reducing seller workload. FBM requires in-house inventory management, which can be challenging but offers more flexibility. 

Customer Service and Returns

FBA provides Amazon-handled customer service and returns, reducing seller workload. FBM requires sellers to manage these processes, increasing operational complexity. 

Seller Feedback 

FBA sellers benefit from Amazon’s automated customer service, which can protect them from negative feedback related to fulfillment issues. 

FBM sellers need to resolve complaints directly, impacting feedback ratings. 

Sales Volume and Velocity 

FBA is ideal for high-volume sales, as Amazon optimizes fulfillment processes for rapid order completion. 

FBM suits sellers who prefer slower, more controlled growth with fewer operational costs. 

Fees

FBM sellers save on Amazon FBA vs. FBM fees but must factor in warehouse costs, labor, and shipping expenses. FBA charges fulfillment fees, storage fees, and returns processing fees, making it more expensive for low-margin products. 

Prime Badge 

FBA automatically qualifies for Amazon Prime, increasing sales potential. 

FBM does not include Prime eligibility unless sellers join Seller Fulfilled Prime SFP which has stringent requirements. 

Amazon FBA vs FBM Costs

Understanding Amazon FBA vs FBM costs is important, FBA Sellers need to account for Fulfillment fees, storage fees, and return processing costs, while FBM sellers need to calculate warehouse expenses, shipping costs, and packaging fees. 

Amazon FBA vs FBM Calculator

To determine the most profitable fulfilment method, sellers should use an FBA vs FBM calculator to compare storage, shipping, and fulfillment costs. 

This tool helps sellers estimate profit margins and decide which model is more cost-effective for their products. 

Can Amazon Sellers Use Both Amazon FBA vs FBM Fulfillment Methods?

Many sellers use a hybrid approach, using both Amazon FBA and FBM based on their product categories. 

Sellers may use FBA for high-volume, fast-moving items and FBM for oversized, customized, or low-margin products. 

This strategy maximizes efficiency and cost savings while maintaining flexibility.