Why 99% of Amazon Sellers Choose FBA (And Should You?)

If you’ve spent any time researching how to start selling on Amazon, chances are you’ve come across the acronym FBA—short for Fulfillment by Amazon. It’s everywhere. And for good reason.

In 2025, more than 99% of Amazon sellers either exclusively use FBA or include it as part of their fulfillment strategy. It’s not just a trend—it’s become the standard. But why is that? What makes FBA so popular, and is it always the best choice for your business?

In this post, we’ll break down:

  • What FBA is and how it works
  • The key benefits that attract sellers
  • The hidden costs and limitations
  • When FBM (Fulfilled by Merchant) might be better
  • How to choose the best strategy for your business

Let’s dive in.

📦 What Is Fulfillment by Amazon (FBA)?

Fulfillment by Amazon is a service that allows sellers to store their products in Amazon’s fulfillment centers. Once a customer places an order, Amazon handles:

  • Picking and packing the product
  • Shipping it to the customer
  • Customer service and returns

Essentially, Amazon becomes your warehouse, shipping team, and customer support—so you can focus on product sourcing, marketing, and scaling.

🔥 Why 99% of Amazon Sellers Choose FBA

Let’s take a look at the biggest reasons sellers overwhelmingly choose Fulfillment by Amazon.

âś… 1. Prime Eligibility = More Sales

The #1 benefit of FBA is that your products are automatically Prime-eligible. In a world where more than 200 million Amazon customers are Prime members, this is a huge deal.

  • Prime customers expect fast, free 1–2 day shipping
  • Many shoppers filter by “Prime Only” when browsing
  • Prime-eligible products tend to rank better in search results

Studies show that Prime-eligible listings can increase conversion rates by 30–50%, simply because shoppers trust Amazon’s shipping and service.

âś… 2. Buy Box Advantage

Winning the Buy Box is crucial on Amazon. It’s the main “Add to Cart” button that accounts for up to 90% of purchases on a listing with multiple sellers.

FBA gives you a competitive edge:

  • Amazon favors FBA sellers due to their fast and reliable fulfillment
  • FBA sellers often have higher seller ratings and performance metrics
  • Even if your price is slightly higher, using FBA can help you win the Buy Box over lower-priced FBM sellers

âś… 3. Hands-Off Logistics

Let’s face it—handling storage, packaging, shipping, returns, and customer service is time-consuming and expensive.

FBA handles:

  • Storage in climate-controlled fulfillment centers
  • Packing and labeling
  • Fast shipping via Amazon’s massive logistics network
  • Customer service (24/7)
  • Returns and refunds

For many sellers, this means you can run your business from anywhere without worrying about the headaches of in-house fulfillment or third-party logistics.

âś… 4. Scalability

FBA allows even small sellers to scale like a big brand.

  • Want to launch a product across the U.S. overnight? Ship inventory to Amazon’s warehouse and go live.
  • Want to handle Q4 volume without renting a warehouse or hiring staff? FBA can do that.
  • Want to grow internationally? FBA supports global marketplaces and multi-channel fulfillment.

Amazon takes care of the heavy lifting so you can grow your product catalog, test new SKUs, and enter new markets with less risk.

âś… 5. Better Customer Experience

Amazon customers trust the FBA system. When they see “Fulfilled by Amazon,” they expect:

  • Fast, predictable shipping
  • Easy, hassle-free returns
  • Quality customer service

When you use FBA, Amazon handles all of this on your behalf, and customers are more likely to leave positive reviews and become repeat buyers.

đź’¸ The Hidden Costs of FBA

While FBA offers huge advantages, it’s not free—and it’s not right for every product.

Here are the key costs to consider:

📦 Fulfillment Fees

These are charged per unit and depend on the product’s size and weight.

Example (2025 rates may vary):

  • Small standard item: ~$3.50 per unit
  • Large standard item: ~$5.00–$10.00
  • Oversized: ~$10.00+

🏢 Monthly Storage Fees

Amazon charges monthly fees for storing your products in their fulfillment centers. Rates are higher in Q4 (October–December) due to increased demand.

If your inventory sits too long, you’ll also face long-term storage fees—which can eat into profits fast.

🛠️ Prep and Labeling Fees

If your products require special prep (e.g., poly bagging, bubble wrap, labels), Amazon will charge you—or you’ll need to prep everything before sending it in.

đź’Ą Returns and Damage

While FBA handles returns, Amazon often reimburses the customer before assessing the issue, and you may not recover the full value. Some products may also get damaged in fulfillment and be marked as unsellable.

📉 Loss of Brand Control

When Amazon handles your customer service and fulfillment, you lose a bit of control over the brand experience. Packaging is standardized, and you have less ability to personalize or build direct customer relationships.

🆚 When FBM (Fulfilled by Merchant) Might Be Better

FBM means you handle your own shipping, storage, and customer service—or use a third-party logistics (3PL) provider.

Here’s when FBM might make more sense:

🧱 1. You Sell Bulky or Heavy Products

FBA fees for oversized or heavy items can be extremely high. If you sell furniture, equipment, or other large items, FBM may be more cost-effective.

🕰️ 2. You Have Low Sales Velocity

If your products move slowly, they can sit in Amazon’s warehouse and rack up long-term storage fees. In this case, FBM allows you to store items more affordably until they sell.

đź’Ľ 3. You Want Full Control of the Customer Experience

FBM allows you to customize your packaging, inserts, and branding. You can also build customer loyalty and capture emails (via compliant methods) more easily.

🌍 4. You Have a Strong Existing Logistics Setup

If you already have a warehouse, team, or fulfillment process in place, FBM might be more profitable—especially if you use software to sync shipping, inventory, and returns.

🔀 Hybrid Model: Best of Both Worlds?

Many top Amazon sellers in 2025 use a hybrid strategy, leveraging FBA for their fast-moving SKUs while using FBM for slow-sellers, oversized items, or B2B orders.

Benefits of a hybrid model:

  • Maximize Prime exposure and Buy Box chances for key products
  • Maintain flexibility in fulfillment and profit margins
  • Hedge against FBA warehouse delays or policy changes

You can also use Amazon’s Multi-Channel Fulfillment (MCF) to fulfill orders from Shopify, Walmart, or your own website using Amazon’s network—even if you’re not selling that product on Amazon.

🧠 Final Thoughts: Should YOU Choose FBA?

Here’s the truth: FBA is powerful—but it’s not always perfect. The right fulfillment strategy depends on your:

  • Product type and size
  • Sales volume
  • Profit margins
  • Branding goals
  • Available infrastructure

For new sellers, FBA is usually the easiest way to launch, scale, and compete with minimal setup. For established businesses, FBA can be a core part of a diversified logistics plan.

Just make sure you understand the true costs, track your metrics, and revisit your strategy as your business grows.

âś… Action Steps

  1. Run a cost analysis for your products using Amazon’s FBA Revenue Calculator
  2. Test FBA with your top SKUs to see the impact on sales and efficiency
  3. Use inventory limits and storage fees as guardrails—not surprises
  4. Consider a hybrid model for more control and flexibility
  5. Review your FBA fees and performance monthly to stay profitable

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