Every Amazon seller sooner or later faces the question: handle logistics in-house or hand it to Amazon? The choice between FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) looks operational, but it touches margins, conversion and the ability to scale. And the right answer rarely applies to the whole catalog.
What actually changes between the two models
With FBA you send your stock to Amazon's warehouses, and Amazon handles storage, packing, shipping, returns and most delivery-related support. With FBM the goods stay in your warehouse, or with a trusted third-party logistics provider, and you fulfill every order yourself, meeting the service standards Amazon imposes on all sellers.
The strengths of FBA
- Automatic Prime badge: you reach the customers who filter by fast delivery and convert more
- Better positioning: the algorithm rewards offers with fast, reliable delivery, and the badge counts in the Buy Box competition
- Logistics support included: returns and delivery issues are handled by Amazon
- Instant scalability: seasonal spikes are absorbed by Amazon's network, not by your warehouse
The flip side is storage fees, which punish slow-moving products, and the loss of control: inventory limits, changing policies, no way to personalize the parcel that reaches the customer.
When FBM makes sense
- Bulky, heavy or slow-moving products, where FBA fees devour the margin
- A curated brand experience: inserts, thank-you cards and custom packaging you cannot control in FBA
- Centralized stock: if you also sell on your own e-commerce or other channels, a single warehouse simplifies everything
- Independence from Amazon's storage limits and warehouse policy changes
The price you pay is operational. The metrics Amazon imposes on FBM sellers are strict: late shipments, cancelled orders and delivery complaints erode account health to the point of risking suspension. There is also Seller Fulfilled Prime, which grants the Prime badge to sellers who ship on their own, but the service requirements are so demanding that it only holds up with excellent in-house logistics.
The hybrid model: often the choice of mature brands
FBA and FBM are not mutually exclusive: you can use them together across the catalog, and even on the same product. The typical setup puts fast-moving best sellers in FBA, where the Prime badge delivers the most, and long-tail, bulky or personalized products in FBM, where Amazon's fees would weigh too much. An FBM offer can also act as a safety net: if your FBA stock runs out, you keep selling and defend your ranking while you restock.
The numbers to check before deciding
The classic mistake is comparing shipping costs alone. The comparison has to be made on overall margin and must include conversion: if the same product converts noticeably better in FBA thanks to the Prime badge, the logistics savings of FBM can turn into a net loss of sales. For each SKU it is worth calculating the full cost per unit in both models: fulfillment and storage fees on one side, warehouse, packing, shipping and your team's time on the other. Then add sales velocity: a slow product in FBA accumulates storage costs the initial calculation did not show. If you do not have these numbers today, rebuilding them is the first step of any serious research and strategy work on the channel.
One last warning: this is not a decision you make once and for all. Fees, volumes and catalogs change, and the fulfillment mix needs regular review. In our way of working, the periodic review of the FBA and FBM mix is part of everyday account management, not a one-off exercise.
If you want to understand which setup earns more for your products, let's talk: we analyze the catalog SKU by SKU and define together the fulfillment mix with the best margins.