When it comes to fulfilling orders on Amazon, you have two main options:
- FBA (Fulfillment by Amazon)
- FBM (Fulfilled by Merchant)
Each has its benefits. Each has its drawbacks.
The real question is:
Which one will help your business sell more and stay profitable?
Let’s walk through a detailed comparison — and help you choose (or combine) the right fulfillment model for 2025 and beyond.
🔍 Quick Definitions
✅ FBA (Fulfillment by Amazon):
You ship inventory to Amazon’s warehouses. They store, pack, ship, and handle customer service and returns.
✅ FBM (Fulfilled by Merchant):
You (or a 3PL) store and ship products directly to customers. You manage customer service and returns.
📦 Key Differences at a Glance
| Feature | FBA | FBM |
|---|---|---|
| Shipping Speed | Prime 1–2 day | Depends on your settings |
| Buy Box Advantage | Stronger with Prime badge | Possible with competitive pricing |
| Fees | Fulfillment + storage fees | Variable — shipping & handling |
| Inventory Control | Less (Amazon handles it) | Full control |
| Returns | Amazon handles | You handle |
| Setup Complexity | Higher (labeling, prep) | Lower (especially with 3PL partner) |
| Multichannel Flexibility | Limited | Flexible (e.g. Shopify, TikTok Shop) |
📈 When FBA Works Best
- You want maximum Buy Box exposure
- You sell fast-moving SKUs
- You want Prime-eligible listings
- You’re okay with Amazon holding your inventory
- You don’t want to handle customer service or returns
- You have high sales volume and can justify the fees
💼 When FBM Makes More Sense
- You sell heavy, oversized, or low-margin items
- You want better inventory control
- You use a 3PL partner (like Marketplace Valet) to handle fulfillment
- You want to sell on multiple channels (Walmart, Shopify, TikTok Shop)
- You want to avoid long-term storage fees or IPI limits
- You operate seasonally or at lower volumes
💡 Hybrid Model = Best of Both Worlds
Many 7- and 8-figure sellers use both FBA and FBM strategically.
✅ Use FBA for your top sellers
✅ Use FBM for seasonal, slow-moving, or oversized items
✅ Let FBM cover FBA stockouts (or during restock limit issues)
✅ Use a 3PL to prep and stage inventory for both
🔎 Performance & Buy Box Considerations
Amazon’s algorithm prioritizes:
- Prime eligibility
- Price
- Shipping speed
- Seller metrics
FBM sellers can still win the Buy Box if:
- Their shipping promise is fast (2–3 days)
- Price is competitive
- Their account metrics are strong
Pro Tip: Use Seller Fulfilled Prime (SFP) if you meet the requirements — FBM with Prime-level benefits.
💰 Fee Comparison Example
Let’s say you sell a product for $40, and it weighs 2.5 lbs.
| Cost Breakdown | FBA | FBM |
|---|---|---|
| Amazon Referral Fee | $6.00 | $6.00 |
| Fulfillment Fee | ~$5.50 | $0 (your own shipping) |
| Storage Fees | ~$0.75/month | $0 (or 3PL storage cost) |
| Shipping (FBM) | — | ~$4.00 |
| Total | $12.25 | $10.00 |
FBM wins margin, but FBA wins Buy Box + conversions.
🧠 Real-World Case Study
Brand: Eco-friendly personal care
- Switched 2 slow-moving SKUs to FBM
- Used Marketplace Valet for DTC + Amazon FBM
- Cut monthly storage fees by 44%
- Maintained ~95% Buy Box share using fast FBM shipping
- Reallocated FBA inventory to higher-turnover SKUs
🎯 Outcome: 18% margin improvement in 60 days
🛠 Tools to Help Decide
- Amazon’s Fee Preview Tool – See real FBA fees
- InventoryLab – Profit tracking by channel
- Marketplace Valet – Fulfillment across FBA, FBM, Shopify & more
- Sellerboard – Margin and TACoS analysis
✅ Final Recommendation
Use FBA if:
- You’re launching a new product
- You want Prime visibility
- Your product fits standard sizing
- You need Amazon to handle customer service
Use FBM if:
- You’re margin-conscious
- You sell large, fragile, or custom items
- You have multiple sales channels
- You have strong fulfillment systems or a reliable 3PL
