When selling on Amazon, one of the first major decisions you’ll make is how to fulfill customer orders. Should you let Amazon handle logistics through Fulfillment by Amazon (FBA), or should you take control and use Fulfillment by Merchant (FBM)?
The choice between these two models affects not only your operational efficiency but also your brand control, profit margins, and even your performance metrics, which can lead to both positive and negative feedback. Let’s explore both models in detail in this guide: at the end of it, you should have a better idea of which choice is best for you.
the basics of amazon fBA
Fulfillment by Amazon (FBA) is Amazon’s in-house logistics service where sellers send their inventory to Amazon warehouses. From there, Amazon handles all aspects of order fulfillment, such as picking, packing, shipping, customer service, and returns.
FBA is popular among sellers who want to scale quickly or don’t have the resources to manage their own storage and shipping.
Pros of FBA
The biggest benefit of FBA is that your products automatically become Prime-eligible, giving them a huge visibility boost and increased customer trust. Prime shoppers often prioritize products with fast, reliable shipping, and FBA ensures they get just that.
Sellers using FBA also benefit from hands-off logistics. You don’t need to worry about hiring warehouse staff or negotiating shipping rates. Amazon takes care of it all. They even manage post-sale support, which means fewer customer service headaches for you.
Cons of FBA
FBA’s convenience comes at a cost: the fees can be steep, especially for oversized or slow-moving items. You’ll also pay monthly and long-term storage fees, and you have little control over how your products are packaged. If your brand depends on custom packaging or inserts, FBA might not be the right fit.
What is Amazon FBM?
Fulfillment by Merchant (FBM) puts you in charge of everything after the sale. That includes warehousing, shipping, and customer service. You can fulfill orders from your own facility or work with a third-party logistics provider (3PL).
Pros of FBM
The biggest advantage of FBM is control. You choose how your products are stored, how they’re packaged, and which carriers to use. This flexibility is especially valuable for custom products, handmade goods, or brands that rely heavily on a premium unboxing experience.
FBM can also be more cost-effective for certain sellers. You avoid Amazon’s fulfillment and storage fees, which can add up quickly. If you’re selling low-volume or niche products with higher margins, FBM may help you retain more of your profit.
Cons of FBM
With increased control comes greater responsibility. Because you’re accountable for meeting Amazon’s standards for shipping speed, order accuracy, and customer support, one of the biggest cons for FBM sellers is the added effort to maintain those or risk poor feedback.
Also, unlike FBA sellers, FBM sellers don’t automatically get the coveted Prime badge. It’s possible to qualify for the Seller Fulfilled Prime program, but this status can be difficult to maintain without some serious time and labor investments.
Comparing FBA vs FBM: The Key Differences
At a glance, FBA and FBM differ across several operational and strategic dimensions:
- Fulfillment and Shipping: With FBA, Amazon handles fulfillment and shipping through its vast distribution network. FBM puts that responsibility on you, giving you the chance to personalize the process—but also the pressure to get it right.
- Prime Eligibility: FBA products are automatically eligible for Prime, giving them a competitive edge. FBM products are not, unless you’re enrolled in the Seller Fulfilled Prime program, which requires consistent 1- to 2-day shipping and top-tier performance.
- Customer Support and Returns: FBA includes Amazon-managed customer support and return handling. FBM sellers must address buyer messages, complaints, and returns directly. This can be time-consuming but allows for more control over customer experience.
- Storage and Logistics: Amazon provides warehousing for FBA inventory, which simplifies operations but incurs monthly fees. FBM sellers use their own storage, which might offer savings and flexibility—especially if you’re already set up with a logistics network.
- Fees: FBA involves fulfillment fees, storage charges, and sometimes hidden costs like removal fees or returns. FBM avoids these, but you’ll need to factor in warehousing costs, shipping expenses, and the software/tools required to manage fulfillment independently.
Cost Considerations: Which Method is More Profitable?
When comparing costs between FBA and FBM, the better option depends on your product type, volume, and fulfillment capacity.
With FBA, you benefit from Amazon’s logistics scale and Prime traffic, but the fees can cut deep, especially if you have low-margin or oversized items. Long-term storage fees can also become a problem if your products aren’t selling quickly.
FBM gives you more flexibility in managing costs. If you already have access to low-cost warehousing or fulfillment partners, this route can be more profitable. Plus, you can offer your own branded packaging, personalized inserts, or upsell material unlike with standard FBA.
However, you need to account for labor, time, and even technology. As your business grows, FBM may require hiring staff or using software
Scaling With FBA vs FBM
FBA is practically built for scaling. Once you set up your supply chain and ship inventory to Amazon, you can focus on marketing, product research, and growth without being bogged down by daily logistics. Amazon takes care of the rest.
FBM, on the other hand, can make scaling more complex. As your sales increase, so do your operational demands for more staff, more space, and overall more complexity. That said, FBM can work well for sellers with unique product lines, controlled demand, or an established logistics setup.
Some of the most successful Amazon sellers actually use a hybrid model, blending FBA and FBM depending on the product. For example:
- FBA for fast-moving, high-volume SKUs
- FBM for oversized, seasonal, or custom products
- FBM as a backup during Q4 or when Amazon limits warehouse space
Conclusion
The best fulfillment method depends on your goals, infrastructure, and risk tolerance. If you want to simplify your logistics and scale quickly, FBA may be the right choice, even if it means paying higher fees. But if you want full control over fulfillment and you have the resources to meet Amazon’s standards, FBM could be better for your business.
Ultimately, fulfillment strategy plays a major role in your customer satisfaction and reviews. If you’ve got your strategy down pat but suspicious negative reviews keep coming, Tracefuse is here to help. We specialize in removing non-compliant negative reviews so you can protect your brand and stay compliant with Amazon’s guidelines. Contact us today and let us help you defend your reputation.
