Amazon FBM vs. FBA: Which Is the Best Fit for Your E-Commerce?

When you sell on Amazon, you choose between Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Each has upsides and downsides, so you should consider that decision carefully. To make the right choice, you must understand their differences.

The Main Differences Between Amazon FBA and FBM

As the name FBA suggests, Amazon handles warehousing and delivery. You send your inventory to them, and then they take care of storing, picking, packing and delivery. If a return is in order, they handle that, too. If possible, workers repackage products so they can be resold. Also, the customer service department will field inquiries and refunds for you. 

If you choose FBM, you take full responsibility for storing and shipping your items. Instead of sending them to an Amazon warehouse, you must use your space or go with another third-party vendor. Any customer complaints related to shipping fall to you, too. It requires more time and effort, but you have more control. FBM and FBA share some characteristics. For instance, both require selling plans. As of 2025, you can get an individual account and pay 99 cents per item sold or upgrade to a professional account for $39.99 monthly. The latter grants you a digital product page, the ability to create promotions, dynamic pricing, shipping fee control, sales reports and more. 

Should Your E-Commerce Company Use FBA or FBM?

There is no question of selling on Amazon. After all, this single platform made up nearly 40% of the e-commerce market in the United States in 2023. There is a huge potential market there. In this case, knowing the differences between FBM vs. FBA is vital. However, sellers also understand each choice’s benefits and drawbacks. 

The Pros and Cons of FBA

For e-commerce companies with extensive inventories, FBA is an excellent way to store and move items seamlessly. Not having to worry about monitoring a temperature-controlled building or setting shipping fees takes much of the work out of selling. Moreover, products are automatically eligible for two-day shipping to Prime subscribers, which can increase sales. 

Another upside is the Ships in Product Packaging program. In exchange for lower fulfillment fees, sellers can ship their items in their custom packaging instead of Amazon-branded boxes. However, as of 2025, it is only available in select countries. 

One downside to FBA is the strict preparation and packaging requirements. Goods often encounter hazards during shipping that may adversely affect their functionality or appearance. This enterprise’s way of mitigating this damage to minimize return-related losses is sensible, but it could create an administrative headache for sellers. 

One little-known fact about FBA is that stickerless, commingled inventory — where similar items receive a generic barcode instead of a seller-specific one to streamline delivery— can lead to customers receiving counterfeits. 

The other cons of FBA are mostly cost-related — this e-commerce giant’s services are not free, unfortunately. Merchants must pay fees for everything from monthly storage to low inventory levels. The enterprise even charges peak season fulfillment fees per item, a practice that began in 2022. Prices range from a few additional cents to several extra dollars.

The Pros and Cons of FBM

The best thing about FBM is the lack of fees. While business owners still have to pay for a selling plan and per-item charges, they avoid the costly shipping and inventory costs. Plus, they do not have to worry about their products being mishandled or broken by Amazon workers. Although they still have to pay to get goods to customers, avoiding those costs is ideal. 

That said, those savings may not translate to profits. The more stake this e-commerce giant has in the sale, the better the product performs. Some industry professionals speculate that this is due to the platform’s algorithm. 

Studies show that items sold by a third-party seller and fulfilled by Amazon outperform those sold and shipped by merchants. For ground coffee sales in the United States, FBA improves the best sellers rank by 29% compared to FBM. Compared to items sold and shipped by Amazon, FBM worsens the best sellers rank by 64%. 

You Need to Decide Between Amazon FBM and FMA

Ultimately, the choice between FBM vs. FMA falls to you, so you must consider the decision carefully. Would you rather handle the logistics process yourself or pay the platform to do it? Are your goods eligible for FBA? Can you absorb low inventory or peak season fulfillment fees? Answer these questions before deciding.