March 11th, 2025

FBA vs FBM: Which fulfillment method is right for your amazon business?

When selling on Amazon, one of the most critical decisions you’ll make is how to handle the fulfillment of your products. For many sellers, the choice comes down to two main options: Fulfilled by Amazon (FBA) or Fulfilled by Merchant (FBM). Each of these methods has its advantages and disadvantages, and the best choice for your business depends on factors such as your product type, business model, and goals.

In this article, we’ll explore the key differences between FBA and FBM, their pros and cons, and how to decide which option is best for you.

Read on to learn more.

What is FBA (Fulfilled by Amazon)?

FBA is Amazon’s fulfillment service, where sellers send their inventory to Amazon’s warehouses. When an order is placed, Amazon picks, packs, and ships the product to the customer. Additionally, Amazon handles customer service and returns for FBA orders.

What is FBM (Fulfilled by Merchant)?

FBM, on the other hand, means that you, the seller, are responsible for storing, packing, and shipping your products. You also handle customer service and returns. Essentially, you control every aspect of the order fulfillment process.

Pros and Cons of FBA

Pros of FBA:

Prime eligibility: FBA sellers automatically qualify for Amazon Prime, which means your products are eligible for free two-day shipping. This can significantly increase your visibility and sales, as Prime customers tend to favor Prime-eligible products.
Amazon handles logistics: By using FBA, you can offload the complexities of storage, packing, and shipping to Amazon. This can save you time and reduce the need for warehousing space or logistics management.
Customer service: Amazon’s customer service is renowned for its efficiency. With FBA, Amazon handles all aspects of customer service, including returns and refunds. This ensures your customers receive a high level of support, which can result in better seller ratings and reviews.
Scalability: With FBA, you can scale your business without having to worry about the logistics of handling increased order volume. Amazon’s warehouses and shipping systems are built to accommodate large-scale operations, which is especially useful during peak times like Black Friday and the holiday season.
Multi-channel fulfillment: Amazon allows FBA sellers to use their fulfillment network for orders from other platforms, such as eBay or your own website. This enables you to manage all your orders from a single location.
Fees: FBA offers significant convenience by managing storage, picking, packing, and shipping on your behalf. While there are associated costs—such as storage fees for keeping your products in Amazon’s warehouses and fulfillment fees for order processing—these expenses are often outweighed by the efficiency and scalability FBA provides. Moreover, the cost is generally more advantageous, as Amazon’s FBA fees are typically much lower than the shipping costs you would incur using a carrier with its own negotiated rates.

Cons of FBA:

Loss of control: When you use FBA, you relinquish some control over the fulfillment process. Amazon handles everything, which means you have less flexibility in terms of packaging, shipping speed, or customizations. Additionally, you may have to deal with Amazon’s stringent requirements for product labeling and packaging.
Inventory management: You need to carefully monitor your inventory levels to avoid running out of stock or overstocking. If your product is out of stock, it can hurt your sales ranking and affect your Amazon listing visibility.
Returns: FBA allows sellers to request that returns be sent back to them for inspection. However, Amazon often refunds customers first, which can lead to higher return rates.

Pros and Cons of FBM

Pros of FBM:

More control over shipping: with FBM, you’re in charge of how and when your products are shipped. This allows you to have more flexibility in terms of packaging, shipping speed, and shipping providers. If you have unique packaging or shipping requirements, fbm gives you full control.
Fees: with FBM, you may have a significant advantage as a seller of large or bulky items, as well as for products that Amazon doesn’t accept due to restrictions or allowances. Those may be: Hazardous materials (Hazmat) or perishable goods (fresh food, supplements with short shelf lives, and temperature-sensitive products), as some examples.
Flexibility in inventory management: FBM sellers have the freedom to store their products wherever they like, whether in a warehouse, home office, or rented space. This provides more flexibility.
Better handling of customization: if you sell custom or made-to-order products, FBM allows you to manage every aspect of the fulfillment process. This is especially beneficial if your products need to be tailored or packaged in a unique way.

Cons of FBM:

No prime eligibility: products fulfilled through FBM are not eligible for amazon prime. This can be a significant disadvantage if you’re competing with other sellers offering similar products that are prime-eligible.
Logistics and shipping responsibility: with FBM, you’re responsible for managing your own logistics. This means you’ll need to handle packing, labeling, and shipping your products. If you don’t have a reliable fulfillment system, this can quickly become overwhelming.
Customer service and returns: as an FBM seller, you’re responsible for customer service and returns. This means you need to have a system in place for handling inquiries, addressing complaints, and processing returns. Poor customer service can negatively impact your seller reputation on amazon.

Summary table - pros & cons of each model

Factor	FBA	FBM
Shipping & fulfillment	Amazon handles it	Seller handles it
Prime eligibility	Yes, automatically	Only via seller-fulfilled prime (sfp)
Fees	It tends to be higher (storage + fulfillment), unless, for example, its inventory level is too high compared to its sales. That lowers the storage cost.	Tends to be lower, but depends on shipping costs
Buy box advantage	Higher	Lower
Inventory control	Less control	Full control
Customer service & returns	Amazon handles it	Seller handles it

Key factors to consider when choosing between FBA and FBM

Product type:

If you sell small, lightweight items that are easy to store and ship, FBA may be a good option because Amazon’s fulfillment fees are lower for these types of products, and Prime eligibility can boost sales.

On the other hand, if you sell bulky or complex products that require specialized packaging or handling, FBM might be the better choice since FBA storage and fulfillment fees can be expensive for large or oversized items. FBM also gives you more control over packaging and shipping.

Business goals:

If your goal is to scale quickly and reach a broad audience, FBA may be a better fit due to its prime eligibility and the ability to handle large order volumes. However, if you prefer a more hands-on approach and want to maintain control over every aspect of your business, FBM may be a better match.

Costs:

In most cases, FBA is the more cost-effective option, as it streamlines logistics, reduces shipping costs, and provides access to Prime customers, which can boost sales. It’s particularly beneficial for high-turnover products that fit within Amazon’s storage and fulfillment guidelines. On the other hand, FBM is best suited for specific cases, such as large, bulky, or restricted items that incur high FBA fees or are not eligible for Amazon’s fulfillment network. Sellers should carefully evaluate their product type, sales volume, and storage needs to determine the most profitable fulfillment method.

Control vs. Convenience:

FBM gives you more control over every aspect of your business, but it also requires more time and effort to manage. FBA, on the other hand, offers convenience and scalability but at the cost of giving up some control over the fulfillment process.

How to make the right decision for your business

The choice between FBA and FBM depends on several factors, including your product type, logistics capabilities, budget, and long-term goals.

If you want to focus on growing your business without managing fulfillment logistics, FBA is a great choice. It offers convenience, scalability, and Prime eligibility, which can help products rank better and convert at a higher rate.
If you prefer more control over your fulfillment process, have the resources to handle shipping and customer service, and want to avoid high FBA fees, then FBM might be the better option.
Many successful sellers use a hybrid approach, leveraging FBA for fast-moving or lightweight items and FBM for large, slow-moving, or custom products. This strategy maximizes the benefits of both models while minimizing their drawbacks.

Conclusion

Both FBA and FBM have their advantages and disadvantages, and the right choice depends on your business model, goals, and resources. By carefully considering your product type, costs, and fulfillment needs, you can make an informed decision that will help you succeed on amazon. Whether you choose FBA, FBM, or a combination of both, the most important thing is to stay flexible and adapt to the changing demands of your business.