Amazon FBA vs FBM: Which Fulfillment Method Is Right for You?
Compare Amazon’s Two Fulfillment Models to Choose What Works Best for Your Business
By ChannelMAX Staff Writer
June-2025#23
When you start selling on Amazon, one significant decision you must make is how to fulfill your customers' orders. This decision can directly impact your costs, profits, delivery time, and customer satisfaction. Amazon offers two primary fulfillment models: FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant).
Both methods have their own advantages and disadvantages. With FBA, Amazon stores, packs, ships, and handles customer service for your products. With FBM, you take care of everything — storing the products, packing, shipping, and talking to customers.
So, which one is better for you? That depends on many factors, such as your product, the number of items you sell, your business goals, and the time and resources you have available.
In this article, we’ll explain how both FBA and FBM work, compare their pros and cons, and help you choose the best option for your Amazon business. Whether you’re just starting or trying to improve your sales, understanding the difference between FBA and FBM will help you make smarter and better decisions.
What is Amazon FBA?
Fulfillment by Amazon (FBA) is a service provided by Amazon where Amazon stores, packs, ships, and also handles customer service for your products. You just send your products to Amazon’s warehouse, and after that, Amazon handles everything from order processing to returns.
How FBA Works:
a. You send your products in bulk to Amazon’s warehouse.
b. Amazon stores the items until they’re sold.
c. When a customer places an order, Amazon picks, packs, and ships the product.
d. Amazon also handles customer support and returns if needed.
FBA is a Good Choice For:
a. Sellers don’t want to worry about shipping and returns.
b. You want your products to be available for Amazon Prime customers.
c. Sellers who have high-volume or fast-selling items
What is Amazon FBM?
In FBM (Fulfillment by Merchant), the seller is responsible for doing everything — storing products, packing them, shipping them, and communicating with customers. Amazon only provides you with the platform for listing your items, but you take care of everything else.
How FBM Works:
a. You list your product on Amazon.
b. You store inventory at your own location or warehouse
c. When a customer places an order, you pack and ship it yourself using your chosen carrier.
d. You handle any customer questions and returns.
FBM is a Good Choice For:
a. Sellers who want full control over their shipping and handling.
b. Businesses that have their own warehouse or a small inventory.
c. Products are handmade, customized, or slow-moving.
FBA vs FBM: Key Differences
Amazon FBA Pros and Cons
Pros of Amazon FBA
Selling through Fulfillment by Amazon (FBA) gives many advantages to sellers. It's a great choice if you want to grow fast, save time, and reach more buyers. Here are a few top benefits:
1. Increased Visibility Through the Prime Badge
When you use FBA, your products are automatically eligible for the Amazon Prime badge. This means:
a. Fast delivery (1–2 days) for Prime members
b. Shoppers trust your product more
c. Better chance of winning the BuyBox (where most sales happen)
Result: More people see and buy your product, especially those who only shop Prime items. Many customers filter by Prime while searching, so having this badge gives your product a major advantage.
2. Access to a High-Spending Customer Base
Amazon Prime members often shop more frequently and spend more money per purchase. With FBA, your products are available to millions of Prime customers who choose fast and smooth delivery. These are loyal, high-value shoppers.
3. Amazon Handles Storage, Shipping, and Returns
One of the most important benefits of FBA is that Amazon takes care of:
a. Storing your inventory
b. Picking, packing, and shipping orders
c. Handling customer returns and refunds
You can spend more time growing your business instead of worrying about fulfillment and logistics.
4. Fast Delivery with Amazon’s Network
FBA products are shipped from Amazon’s warehouses present across the country. So your customers often receive their orders faster, even on the same day sometimes. Faster delivery leads to happy customers, which can help your product receive better reviews and repeat purchases.
5. Excellent Customer Service by Amazon
Amazon provides 24/7 customer support for all FBA orders. If there's a problem with shipping, delivery, or returns, Amazon handles it directly. This saves your time and ensures get great service.
Cons of Amazon FBA
While Amazon FBA (Fulfillment by Amazon) helps sellers grow their business, it also has some downsides you should be aware of.
1. FBA Fees Can Reduce Your Profit Margins
Using FBA offers convenience, but it isn’t free. You have to pay for:
a. Monthly and Long-term storage fees for storing your products in Amazon’s warehouse
b. Packing and shipping each item
c. Handling returns (for some categories)
If you sell low-cost or large-sized items, these fees can take away a big part of your profit. So, always calculate the total cost before using FBA.
2. Loss of Control Over Inventory and Shipping
Once your products are in Amazon’s warehouse, you can’t control how they are stored, packed, or shipped.
a. You can’t always use custom packaging or branding.
b. If Amazon makes a shipping or handling mistake, your seller rating could still be affected.
3. Strict Requirements and Storage Limits
Amazon may limit how much inventory you can send to their warehouses, especially if your products aren’t fast-selling.
a. If your sales are slow, you may face inventory restock limits.
b. This can cause problems when you want to scale or restock in peak seasons.
4. Extra Storage Fees for Slow-Selling Products
If your products don’t sell within a certain period and stay in Amazon’s warehouse for too long (181 days and above), you’ll have to pay extra storage fees (known as Aged inventory surcharges). These fees are much more expensive and can affect your profit, especially for slow-moving products.
5. Product Returns are Higher
Since Amazon makes returns easy for Prime customers, products sold with FBA tend to have higher return rates. Even if the product isn’t defective, customers can return it easily. As the seller, you may have to pay for these returns.
Amazon FBM Pros and Cons
Pros of Amazon FBM
If you want to save money and have more control over your business, FBM (Fulfillment by Merchant) can be a good option. With FBM, you take care of storing, packing, and shipping your products yourself. Here are the main benefits:
1. Lower Fulfillment Costs for Certain Products
FBM can be more cost-effective, especially if:
a. You sell bulky or slow-selling products
b. You already have a warehouse or storage system to store your products
c. You can ship products at a low cost using your own logistics
Unlike FBA, you won’t have to pay Amazon’s storage or handling fees. That means you can make more profit, especially on expensive or custom items.
2. Full Control Over Inventory and Shipping
With FBM, you have full control over every part of the order process. You decide:
a. How to pack your orders
b. When and how to ship them
c. Which courier or shipping service to use
This is a great option if you want to add personal touches or offer custom orders.
3. More Flexibility and Fewer Restrictions
FBM sellers don’t have to worry about:
a. Amazon’s restock limits
b. Long-term storage fees
c. Removal orders or sudden policy changes about storage
You can store your products as long as you like and grow your business at your own pace. This helps during busy seasons too.
4. Best for Custom or Handmade Products
FBM is the best choice if your products:
a. Are handmade or customized
b. Need special packaging
c. Must be handled with care
Amazon’s FBA model works best for simple, fast-selling products. FBM works better for unique or niche items.
5. Great for Building Your Brand
When you ship the products yourself, you can:
a. Use custom packaging
b. Include thank-you notes or special messages
c. Create a unique unboxing experience that encourages repeat buyers
This helps you create a strong brand and keep customers coming back, something that’s not possible to do with FBA.
Cons of Amazon FBM
While FBM gives more flexibility and control, it also brings more responsibility to the seller. If you don’t manage it well, these challenges can affect your sales, ratings, and performance.
1. Not Eligible for Prime by Default
FBM products don’t get the Amazon Prime badge unless you join Seller Fulfilled Prime (SFP), which has strict requirements. Without the Prime badge:
a. You may get less visibility in search results
b. As fewer people may see your product, it’s harder to win the Buy Box
c. Many Prime members who want fast Prime shipping may skip your listings
This can directly reduce your sales volume.
2. You Handle Everything
With FBM, you must take care of:
a. Storing your items
b. Packing and shipping
c. Customer service and returns
If you don’t have a proper setup or a team, it can be stressful and time-consuming, especially during busy seasons.
3. Slower Shipping Can Lead to Poor Reviews
Amazon customers expect fast, on-time delivery. With FBM:
a. You’re responsible for meeting shipping deadlines
b. Any delays or mistakes can hurt your seller rating
c. Late deliveries may lead to negative feedback or warnings from Amazon
4. Difficult to Compete with FBA Sellers
FBM sellers often struggle to compete with FBA listings because they:
a. Appear higher in search results
b. Have the Prime badge
c. Offer faster and more reliable shipping
Unless your product is very unique or niche, it’s harder to win over customers who expect the Prime benefit.
5. Limited Access to International Markets
With FBM, it is harder to expand globally. You’ll need to:
a. Handle international shipping
b. Handle duties, customs, and regulations
c. Offer good support to international customers
This can be costly and complex compared to using Amazon’s global FBA services.
FBA vs FBM — Which Fulfillment Model Should You Choose?
Choosing between Amazon FBA and FBM depends on your product type, business size, budget, and how much control you want over the order fulfillment process. Each model fits different types of sellers. Let’s make it simple:
Choose FBA if:
a. You want to save time by letting Amazon handle storage, packing, shipping, and returns of your products.
b. Your products are lightweight, fast-selling, or ideal for Prime customers.
c. You don’t have your own warehouse or team to manage fulfillment.
d. You want to grow your business quickly and sell nationwide or globally.
e. You are okay with paying fulfillment and storage fees in exchange for convenience.
Best for: New sellers, fast-moving products, and those focusing on Prime customers.
Choose FBM if:
a. You have your own storage space, or are good at handling logistics efficiently.
b. You sell custom, bulky, handmade, or slow-selling products.
c. You want more control over how your products are packed and shipped.
d. You can manage your own customer service and returns.
e. You want to avoid FBA fees and possibly make more profit.
Best for: Experienced sellers, brand-focused businesses, or sellers with low inventory volume.
Using Both FBA and FBM: A Smart Mix for Amazon Sellers
Many successful sellers use a hybrid model, using FBA for fast-selling items and FBM for slow movers or special products. This mix, called a hybrid strategy, gives more control, saves money, and helps reach more customers. But you need to manage it well.
Pros of Using Both FBA and FBM
1. More Sales and Better Reach
You can sell the same product using both FBA and FBM. This helps:
a. Reach more buyers
b. Keep selling even if one runs out of stock (if FBA runs out, FBM keeps the listing active)
c. Greater chances of winning the Buy Box under different conditions
2. Use Each for the Right Product
a. Use FBA for small-sized, fast-selling, Prime-eligible items
b. Use FBM for bulky, custom-made, or slow-moving items that would be expensive to store in Amazon warehouses
This way, you save money and deliver faster.
3. Control During Peak Seasons
During holidays or Prime Day events, Amazon may limit how much stock you can send to FBA. With FBM, you can continue fulfilling orders yourself and avoid delays.
4. Test New Products
You can list new or untested products with FBM first. If they perform well, you can switch to FBA later. This approach lowers risk and avoids unnecessary storage costs. FBM gives you freedom from Amazon’s rules. If Amazon changes policies or increases fees, you can still manage your business smoothly.
Cons of Using Both FBA and FBM
1. Inventory Gets Harder to Manage
You have to track stock in two places — Amazon’s warehouse (FBA) and your own (FBM). Without the right tools, it can lead to errors and overselling.
2. Requires Strong Operations
Running a hybrid model means handling
a. FBA shipments and setup
b. FBM packaging, shipping, and returns.
You must have good systems or team support to manage both properly.
3. Confusing Customer Experience (If Not Managed Well)
If your product shows both FBA and FBM options, customers may get confused by:
a. Different shipping speeds
b. Different return processes
This can impact your brand’s reputation if not managed carefully.
Conclusion
When it comes to Amazon fulfillment, there’s no one-size-fits-all solution. Both FBA and FBM have their own benefits, and each comes with its own set of downsides too.
FBA is great if you want to grow fast, save time, and offer fast Prime delivery, especially for small, high-demand items. FBM is better if you want more control, sell unique or bulky items, or want to avoid Amazon's storage and shipping fees. If you’re an experienced seller, you can also use both FBA and FBM together to get the benefits of both.
Whatever you choose, being organized and using the right tools is very important. A tool like ChannelMAX can help you with pricing, product listings, and more, so you can grow your Amazon business more easily. Start with what fits your needs right now, and be ready to change later. As your business grows, you can always adjust your fulfillment model to earn more and keep your customers happy.
Also Read: Amazon Best Sellers Rank (BSR): Everything You Need to Know
Disclaimer:
Amazon is the registered trademark of the e-commerce brand.
About ChannelMAX.NET:
ChannelMAX offers Amazon Repricer that runs on the latest AI Repricing agents to do Amazon Pricing Management or Amazon Repricing. Based on Amazon SP API, the repricing engine or repricer runs 24/7 and efficiently manages Amazon prices to maximize your BuyBox with profit optimization. Established in 2005, ChannelMAX has been integrated with Amazon technology since 2007, helping thousands of third-party sellers on various eCommerce platforms. Some of the eCommerce platforms, aka marketplaces, supported by ChannelMAX.NET, are Amazon, Walmart, eBay, and Shopify. Some of ChannelMAX key offerings include ChannelMAX Amazon Repricer, 2ndly, ChannelMAX Amazon FBA Audits and FBA Refunds management, an offering for managing Amazon FBA Refunds Reimbursement management for lost or damaged or misplaced inventory for which Amazon is responsible and for which sellers deserve appropriate credit reimbursement from Amazon. ChannelMAX Services offer Remote (aka Virtual) Full-Time eCommerce Assistant to help 3P sellers run their daytoday business.
Check ChannelMAX at Amazon Selling Partner Appstore, an application with a 5 star rating.