FBA Amazon vs Amazon FBM (Fulfillment by Merchant): Which Suits You Best?

Business Mar 27, 2025 32 Add to Reading List

Planning to sell on Amazon in 2025? The wrong choice of fulfillment option will be detrimental for your business. There are two primary choices: Amazon FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant). Each comes with its pros and cons. Which one is better for you personally?

In this guide, we will take a look at FBA and FBM and compare them in regards to cost, simplicity, return revenue, and suitability based on your business model.

What is Amazon FBA?

With FBA or Fulfillment by Amazon, a seller ships their products to Amazon’s fulfillment centers. Amazon takes care of the rest - they store, package, ship, service, and handle returns.

Pros of FBA:

✅ Prime Eligibility – Your products qualify for Amazon Prime which provides for faster shipping and increased conversions.
✅ Hands Off Approach – Amazon takes care of storage, shipping, and customer service.
✅ Higher Sales Potential – Sellers on FBA do greatly increase sales and receive better ranking due to reduced days to shipping products.
✅ Scalability – Great for sellers wanting speedy growth without worrying too much about logistics.

FBA Disadvantages:

❌ Storage and fulfillment fees– Like other services, Amazon also charges for using their storage space, fulfilling customer orders, and even handling returns.
❌ Less Control – There is limited control over packaging and inventory.
❌ Long-Term Storage Fees – Products that do not sell quickly can incur additional fees over time.

What Is Amazon FBM?

Sellers who opt for FBM (Fulfillment by Merchant) take full responsibility for storing the products, packing, shipping, and even outsourcing to a 3PL. FBM is the opposite of FBA. With FBM, you have to manage everything for fulfillment.

Pros of FBM:

✅ Lower fees - Great for sellers who deal in high-margin products since there are no storage or fulfillment fees.
✅ More control – The seller has complete power over the inventory, packaging, and delivery method.
✅ No storage time limits – There are no penalties for products that do not sell quickly.
✅ Better for customized or heavy items – Custom packaging for oversized goods is allowed, making FBM hassle-free when dealing with these items.

Cons of FBM:

❌ No prime badge – Customers looking for quick delivery will not be interested without those.
❌ Customer service responsibility – Dealing with returns, refunds, and complaints is solely your responsibility.
❌ Shipping logistics challenges – These directly affect customer satisfaction and reviews, so they need to be efficiently managed.

FBA vs FBM: In-Depth Comparison

Attributes	FBA (Fulfillment By Amazon)	FBM (Fulfillment By Merchant)
Storage	Holds Inventory in Amazon's Warehouses	Seller stores inventory at their facility or with a 3PL provider
Shipping	Automatic for Amazon Seller	Seller handles or outsources shipping
Prime Badge	Eligible for Prime	No Prime eligibility without Seller Fulfilled Prime (SFP)
Customer Service	Handled by Amazon	Seller provides customer service
Fees	More expensive due to storage and fulfillment fees	Less costly because there are no FBA expenses
Control	Seller has no control in packaging and delivery	Seller has total control of the fulfillment process
Best For	Sellers automated operations and take advantage of Prime	Sellers who wish to have more automation and premium service

What to Select?

Select Amazon FBA If…

✅ You provide products that are quick selling, lightweight or small in size.
✅ You are looking for Amazon to take care of fulfillment as well as customer service.
✅ You want advantages of Prime eligibility and Buy Box.
✅ You wish to expand your business efficiently.

Select Amazon FBM If…

✅ You sell items that are large, bulky or delicate.
✅ You are looking for cost-effective pricing with significant profit margins.
✅ You already have a system in place for storing and shipping.
✅ You wish to have complete control of branding and fulfillment.

Price Analysis: FBA Against FBM

FBA Fees (For A Small Item):

Fulfillment Fee: $3.00 per unit
Storage Fee: $0.75 per cubic foot (monthly)
Returns Handling: Free, but only in some categories

FBM Costs (Most Likely):

Storage: Varies by the cost of warehouse space
Shipping: $5.00 per package (depends on carrier)
Returns Handling: Seller bears the cost of return shipping

EBM cost less than FBA services, but put in more work. It's clear, FBA is more expensive than FBM, but has the added perk of convenience.

FBA And FBM Shifting Procedures

Try both if you want to be extra careful. Amazon allows you to shift fulfillment methods by:

Creating two different listings, one set for FBA and another for FBM. You can manage sales and expenses to check which one is more suitable for your business. You can also use Amazon Multi-Channel Fulfilment (MCF). - A combination method where Amazon fulfills its own orders through FBA and also fulfills requests from sellers who do not use Amazon.

Where The Bucks Stop: What's The Best Model To Use In 2025?

Each of FBA and FBM has pros on each of them, undoubtedly the best choice will hinge on business needs.

If you want to sit back and relax while reaping the benefits of Prime, FBA is your best bet.

For better savings and more control on fulfillment, FBM is your way to go.

Many sellers claim that employing a mix of FBA and FBM for various products is projected to be the most profitable approach in 2025.

Want to Start Selling on Amazon?

Regardless of the model you adopt, it is critical to comprehend your profit margins, effectively optimize your listings, and deliver top-notch customer service.

Need help with Amazon FBA or FBM strategies? Our Amazon Seller Central Experts can guide you! Contact us today on our official website.