Every Amazon seller has to decide who ships the orders. With FBA (Fulfillment by Amazon), you send stock to Amazon's warehouses and Amazon picks, packs, ships and handles returns. With FBM (Fulfilled by Merchant), you or your own warehouse (3PL) ship each order.
Most brands we work with use FBA for most products. But it isn't automatic, and the 2026 fee changes have made the maths worth checking again.
FBA: the advantages
- Prime badge. FBA products are Prime-eligible, which usually lifts conversion rate significantly.
- Amazon handles fulfillment and returns, including customer service for delivery questions.
- Better Buy Box chances and stronger organic performance, in our experience.
- Scales without hiring. Peak season volume is Amazon's problem, not yours.
- Multi-Channel Fulfillment lets you ship orders from your own website out of the same FBA stock.
FBA: the disadvantages
- Fees are layered. Fulfillment fees, monthly storage (much higher from October to December), inbound placement fees, low-inventory-level fees, aged inventory surcharges and, for some products, returns processing fees.
- Strict inbound rules. Packaging, labeling and shipment requirements, with penalties or refusals if you get them wrong.
- Less control. You can't customize packaging or inserts beyond Amazon's rules, and stock can be stuck if Amazon limits inventory.
- Capacity limits. Amazon sets storage limits based on how fast your stock sells.
FBM: the advantages
- Control over packaging, inserts and the unboxing experience.
- No FBA storage or placement fees, which helps for slow-moving, bulky or seasonal products.
- Flexibility to sell from the same stock on other channels.
- Seller Fulfilled Prime is possible if you can consistently meet Amazon's fast-delivery standards, though the bar is high.
FBM: the disadvantages
- No Prime badge without Seller Fulfilled Prime, which usually means lower conversion.
- You handle everything: shipping speed, tracking, returns and customer questions, all with Amazon's performance metrics watching.
- Harder to scale through peaks without a good 3PL.
How to choose
| Situation | Usually better |
|---|---|
| Small to medium, fast-selling products | FBA |
| Products that compete on Prime and fast delivery | FBA |
| Large, heavy or slow-moving products | FBM, or test both |
| Very low-priced products | Compare, but check Amazon's low-price FBA rates |
| Products needing custom packaging or assembly | FBM |
| Backup when FBA stock runs out | FBM as a safety net |
A mix often works best
Many brands run FBA as the main channel and keep an FBM offer as backup on key ASINs, so a delayed inbound shipment doesn't mean losing the sale (and the rank). Others use FBA for fast sellers and FBM for oversized or long-tail products.
Keep FBA fees under control
- Don't run low. The low-inventory-level fee applies when you have less than roughly four weeks of stock relative to sales.
- Don't overstock either. Storage costs jump in Q4, and stock held over a year attracts aged inventory surcharges.
- Check your size tier. A few millimeters of packaging can push a product into a more expensive tier.
- Review placement options. Amazon-optimized splits avoid the inbound placement fee but mean shipping to several warehouses.
Getting the restock rhythm right is most of the battle. That's what our inventory management service focuses on: weekly stock levels and reorder recommendations, so you avoid both stockouts and storage fees.