If you want to sell on Amazon, one of the first big decisions you’ll face is how to fulfill orders. Do you use FBA (Fulfillment by Amazon) or FBM (Fulfillment by Merchant)? Both options can work, but the best choice depends on your business model, budget, and goals.
What Is Amazon FBA?
FBA stands for Fulfillment by Amazon. With this method, you send your inventory to Amazon’s warehouses. When a customer places an order, Amazon handles the picking, packing, shipping, customer service, and even returns. Your products also become eligible for Prime shipping, which can boost conversion rates.
What Is Amazon FBM?
FBM stands for Fulfillment by Merchant. Instead of sending your inventory to Amazon, you store it yourself or use a third-party logistics provider. When an order comes in, you’re responsible for packaging and shipping it directly to the customer. You control the process but also carry the workload.
Key Differences Between FBA and FBM
The main difference is who handles fulfillment. FBA outsources it all to Amazon, while FBM puts the responsibility on you. This affects costs (calculate them here), speed, Prime eligibility, and even how customers perceive your brand. In short, FBA offers convenience and scale, FBM offers control and flexibility.
Pros of Amazon FBA
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Prime Eligibility – FBA products get the Prime badge, which makes them more attractive to millions of Amazon Prime members.
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Fast Delivery – Customers love 2-day (or faster) shipping, and Amazon has the infrastructure to deliver reliably.
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Customer Service Covered – Amazon handles all customer inquiries, returns, and complaints.
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Higher Buy Box Chances – Products fulfilled by Amazon often have an edge in winning the Buy Box.
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Scalability – If your sales explode, Amazon can handle the surge without you scrambling to fulfill orders.
Cons of Amazon FBA
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Fees Add Up – You’ll pay storage fees, fulfillment fees, and referral fees. Margins can get tight if you’re not careful.
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Less Control – You don’t manage the packaging or customer interactions, which limits your brand experience.
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Long-Term Storage Costs – Unsold inventory sitting in Amazon warehouses racks up charges.
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Stricter Rules – Amazon has specific prep and labeling requirements, and mistakes can delay shipments.
Pros of Amazon FBM
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Lower Fees – You skip FBA storage and fulfillment fees, which can boost margins if you manage shipping efficiently.
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More Control – You handle packaging and can create a custom brand experience.
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Better for Oversized Products – Large or heavy items are expensive to store and ship via FBA. FBM can save money in these cases.
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Flexibility – You can use your own systems, warehouses, or even test hybrid models with other marketplaces.
Cons of Amazon FBM
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No Prime Badge – Unless you qualify for Seller Fulfilled Prime (SFP), your products won’t carry the Prime label, which can lower conversions.
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You Handle Customer Service – Returns, complaints, and inquiries all fall on you.
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Shipping Responsibility – If you can’t ship quickly, your metrics may suffer, and Amazon penalizes poor performance.
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Harder to Scale – A sudden jump in orders means a sudden workload spike for your team.
Which Sellers Should Use FBA?
FBA is best for:
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New sellers who want Prime visibility and easy logistics
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Businesses with small, lightweight, fast-moving products
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Sellers who value scale and want to outsource customer service
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Entrepreneurs who don’t have storage or shipping infrastructure
Which Sellers Should Use FBM?
FBM works well for:
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Sellers with oversized or heavy items
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Merchants with tight margins who can’t absorb FBA fees
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Brands that want full control over packaging and customer experience
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Sellers who already have warehouses or shipping systems in place
Final Verdict: FBA vs FBM in 2025
Neither method is better across the board. FBA gives you access to Prime customers, easy logistics, and scalability. FBM gives you lower costs, control, and flexibility. Some sellers even use a hybrid approach — FBA for fast-moving, lightweight items, and FBM for larger or seasonal products.
So which is better? It depends on your goals. If you want maximum reach and convenience, FBA is hard to beat. If you value control and lower costs, FBM may be the smarter play. The key is to run the numbers, test both if possible, and choose the option that aligns with your business strategy.
