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What is the difference between FBA and FBM?

Richard

Co-Founder at Amersify

Introduction

One of the primary decisions every Amazon seller faces is how to fulfil orders: via FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant).

Both models remain profitable, but each operates very differently. FBA entrusts logistics to Amazon, benefitting from Prime customers and rapid shipping. FBM keeps fulfilment in your hands, offering greater control—but also greater operational responsibility.

This article breaks down the recent differences, costs, pros, and cons, alongside October 2025 policy updates, so you can choose the best route for your brand.

1. What Is FBA (Fulfilled by Amazon)?

With FBA, products are sent to Amazon’s fulfilment centres, and Amazon oversees everything: storage, picking, packing, delivery, customer service, and returns.

How It Works:

Product inventory is shipped to Amazon fulfilment centres.
When an order is placed, Amazon picks, packs, and ships the item.
Amazon manages all post-sale service and returns.

Key Advantages:

Prime Eligibility: Products qualify for Amazon Prime, reaching millions of high-intent customers.
Faster Delivery: Amazon’s logistics enable 1–2 day shipping for most UK and European customers.
Customer Trust: FBA listings display “Fulfilled by Amazon”, increasing buyer confidence.
Buy Box Advantage: FBA listings tend to win the Buy Box more regularly.

Key Disadvantages:

Fees: As of October 2025, FBA incurs variable fulfilment charges, storage fees (increased for peak season, Q4), and returns handling fees (including newly raised surcharges for fragile items).
Reduced Control: Packaging and dispatch timing are standardised by Amazon.
Storage Limits: Amazon may restrict storage space, especially during promotional periods or if your Inventory Performance Index (IPI) falls below the current threshold (400+).
Complex Returns: Returned products often require reconditioning before resale.

Amersify Tip:

FBA is optimal for fast-moving, standard-size products with regular sales, where rapid delivery and Prime visibility justify the higher fees.

2. What Is FBM (Fulfilled by Merchant)?

FBM means you oversee fulfilment, whether from your own warehouse or through a third-party logistics (3PL) partner.

How It Works:

Products are listed on Amazon.
Upon sale, you pack and ship orders directly.
Customer service and returns are handled in-house.

Key Advantages:

Total Control: Manage product stock, packaging, and delivery methods directly.
Lower Fees: Avoid storage surcharges and fulfilment charges imposed by Amazon (including October 2025 updates).
Flexibility: Easier to trial new products or handle seasonal items.
Multi-Channel Fulfilment: Use one system for Amazon, website, and retail orders.

Key Disadvantages:

No Prime Badge (by default): You miss out on Prime customer conversions unless enrolled in Seller Fulfilled Prime (SFP).
Reduced Conversion Rates: Standard shipping generally means slower deliveries and lower Buy Box win rate.
Increased Workload: Fulfilment, customer service, and shipping are your responsibility.
Performance Risk: Any dispatch or delivery delays can negatively impact account health under Amazon’s stricter 2025 metrics.

Amersify Tip:

FBM suits brands selling bulky, low-margin, or slow-moving products, where FBA’s fees would greatly erode profitability.

3. Cost Comparison: FBA vs FBM (October 2025)

Cost Area	FBA	FBM
Fulfilment Fees	Per unit, varies by weight/size. Q4 surcharge applies.	In-house or 3PL cost; flexible.
Storage Fees	Monthly charge; Q4 rates increased; long-term fee for aged stock.	Own warehouse/3PL.
Shipping Costs	Included in FBA fee structure.	Paid per courier/service.
Returns Handling	Managed by Amazon; new surcharges for certain categories.	Managed by merchant.
Customer Service	Amazon manages, including new standards for returns.	Seller-managed.
Prime Eligibility	Yes (included).	Only via Seller Fulfilled Prime.

Pro Insight:

Run detailed margin simulations using the Amazon Revenue Calculator, considering recent fee increases and the Prime conversion uplift. FBA’s all-in costs may be offset by higher conversion rates.

4. Performance Comparison

Factor	FBA	FBM
Delivery Speed	Fast (1–2 days, UK norm)	Varies by courier/service
Customer Trust	High	Moderate
Scalability	Effortless to scale	Requires infrastructure
Branding Control	Limited (Amazon standards)	Full control
Account Health Risk	Lower (Amazon manages)	Higher (seller responsible)

Amersify Tip:

Consider a hybrid approach — FBA for bestsellers, FBM for niche or oversized lines.

5. Seller Fulfilled Prime (SFP) — The Middle Ground

SFP allows experienced merchants to fulfil Prime orders from their own facilities.

Requirements (2025):

Ship orders same day or next day.
Use Amazon-approved carriers with tracking.
Maintain >99% on-time delivery, <0.5% cancellation rate.

Pro Insight:

SFP offers high customer trust and Prime conversion rates, but maintaining compliance is operationally demanding under 2025 standards. Enrolment is restricted and only periodically open — check Seller Central announcements.

6. Choosing the Right Model for Your Brand

Brand Type	Recommended Fulfilment Model
Fast-moving consumer goods	FBA
Large or heavy products	FBM
Seasonal or low-volume lines	FBM
Premium, branded packaging	FBM or SFP
Scalable eCommerce brand	Hybrid (FBA + FBM)

Amersify Tip:

Assess fulfilment strategy at least quarterly — fees, conversion rates, and Amazon policies (like Q4 storage caps or new return surcharges) can shift the ideal mix.

FAQs

Can I use both FBA and FBM?

Yes. Many sellers combine both methods to optimise profit and operational flexibility.

Does FBA improve organic ranking?

Indirectly. Higher conversion rates drive better search visibility, as supported by Amazon’s A9 algorithm documentation.

Is FBA mandatory for success?

No, but Prime eligibility and fast delivery are major sales drivers for most products.

Can I switch between FBA and FBM?

Yes. Adjust fulfilment per SKU, or run hybrid operations as business needs change.

Summary

FBA and FBM offer distinct benefits and challenges. FBA delivers scale and automation, enhanced by Prime conversion, while FBM provides control and flexibility for brands with unique logistics needs. Seller Fulfilled Prime can bridge the gap but is operationally intensive. Regularly review your fulfilment setup, leveraging the latest tools, fee calculators, and policy updates as of November 2025, to maximise profit and protect your brand’s reputation.

At Amersify, our experts help brands navigate fee changes, margin analysis, and fulfilment optimisation strategies, ensuring your business remains ahead in the evolving Amazon landscape.