Amazon FBA vs FBM: The Big Question for Every Seller

Once you’ve got your product, your listing looks good, and you’re ready to start selling on Amazon, you hit a big fork:

FBA (Fulfillment by Amazon) or FBM (Fulfilled by Merchant)?

This decision is crucial, as it determines whether you or Amazon will handle all aspects of packing, shipping, and customer service.

There’s no “better” option. 

It’s more like choosing between an all-inclusive resort (FBA) and a DIY Airbnb (FBM). Both get you where you need to go, but the experience and cost are completely different.

Let’s just break down what each one actually means, the real costs, and who they’re a good fit for.

FBA: Fulfillment by Amazon (The Hands-Off Option)

Think of FBA as handing over your warehouse operations to Amazon. You send your products to their warehouses, and they handle the rest.

The Pros: What You Get

• Prime Status is HUGE: This is the main reason people choose FBA. Your product gets the famous Prime badge, which means fast, free shipping for Amazon’s most loyal customers. This turbocharges sales and makes you way more competitive.
• Zero Fulfillment Stress: Amazon handles picking, packing, shipping, and all customer service questions related to shipping and returns. You don’t have to touch a box or answer a “Where is my package?” email. It’s truly hands-off.
• Buy Box Advantage: FBA sellers are generally favoured in the competition for the Buy Box (that ‘Add to Cart’ button). Winning it is everything on Amazon.

The Cons: Where it Bites

• Higher Costs (The Fees): Convenience comes at a price. You’ll pay FBA fulfilment fees (for picking, packing, and shipping) and storage fees (for storing your stuff in their warehouse). For big, heavy, or slow-selling items, these costs can eat into your profit.
• Loss of Control: You can’t put your own branding stickers on the box or write a personal thank-you note. You also lose some control over returns and customer service. It’s all done the Amazon way.
• Storage Rules: Amazon has strict inventory limits and charges high long-term storage fees if your products remain in storage for too long. You must stay on top of your inventory.
  

FBM: Fulfillment by Merchant (The DIY Option)

Fulfilment by Merchant (FBM) is the do-it-yourself route. 

You list your product on Amazon, but when an order comes in, you are responsible for everything: storing, packing, shipping, and providing customer service and returns.

The Pros: What You Control

• Lower Fees and Potentially Higher Margins: You avoid all those FBA fulfilment and storage fees. If you can get great shipping rates on your own (maybe you already ship a lot of stuff), FBM is a cheaper option for you, especially for large, heavy, and lower-priced items.
• Total Control and Branding: You get your own branded packaging, including special inserts, and manage the customer service experience exactly how you want. This is great for building a brand!
• No Inventory Limits: Store your products wherever you want, your garage, a rented warehouse, or a third-party logistics (3PL) company. No need to worry about Amazon’s strict storage limits.

The Cons: The Responsibility is All Yours

• All the Work is on You: Every time an order comes in, you stop what you’re doing, pack the stuff, and ship it. This can take up a ton of time.
• No Automatic Prime: You don’t get the automatic Prime badge. This can seriously hurt your sales. To compete, you’d have to qualify for Seller Fulfilled Prime (SFP), which is hard to achieve because of strict shipping performance standards.
• Tougher to Win the Buy Box: Without the Prime badge and Amazon’s fulfillment trust, it’s often harder to win the Buy Box against FBA sellers, even if your price is lower.
  

Amazon FBA vs FBM Cost: A Quick Look

Both models have the same basic Amazon Referral Fees (Amazon’s commission for the sale, usually 8-15%). 

The difference is the fulfilment cost.

Factor	FBA (Fulfillment by Amazon)	FBM (Fulfilled by Merchant)
Fulfillment Fee	Paid to Amazon (covers packing, shipping, customer service)	Paid to your carrier (UPS, FedEx, USPS, etc.)
Storage Fee	Paid to Amazon (can be high for slow-moving or bulky items)	Paid to your warehouse/3PL, or zero if using your own space
Best for	Small, lightweight, fast-selling products.	Heavy, oversized, or slow-moving/niche products.

Pro Tip: If you’re just starting and wondering about the Amazon FBA vs. FBM cost, you can run the numbers with Amazon’s FBA revenue calculator for your product. 

Don’t guess on the Amazon FBA vs FBM cost; calculate it. Just plug in your costs for both scenarios to see which one reaps healthier profit margins.

So, Which One is Better for You in Amazon FBA vs FBM?

Instead of asking, “Is FBA better than FBM?”

 Ask yourself, “What are my goals?”

If Your Goal Is…	The Best Fit Is…	Why?
Maximum Sales and Scaling	FBA	Prime eligibility and the Buy Box advantage mean higher conversions, and Amazon handles the logistics as you grow.
Total Cost Control and Branding	FBM	You keep costs down and control the entire customer experience, which is great if you have a niche brand.
Testing New Products	FBM	Use FBM initially to test the market without sending a ton of inventory to Amazon and risking long-term storage fees.
Selling Large/Heavy Items	FBM	FBA fees for large/heavy items are usually too high. You can almost always ship them cheaper yourself.

Amazon FBA vs FBM: The Hybrid Strategy

Many savvy sellers use a hybrid approach. 

They utilize FBA for their top-selling, lightweight items to gain the Prime advantage, and FBM for larger, slower-moving, or custom-packaged products to minimize fees and retain control.

It’s the ultimate way to balance selling on Amazon FBA vs FBM.

The best fulfillment method varies depending on your product, business size, and goals. What works for a high-volume t-shirt seller won’t work for a furniture seller. 

Take your time, crunch those numbers, and you’ll know whether Amazon FBA or FBM makes the most sense for your business.

If you’re interested in mastering both models, we offer a comprehensive Amazon Training program designed to guide you step by step.

You can also book a free consultation with our Amazon experts to get personalized advice tailored to your goals.

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