Amazon FBA or FBM: which fulfilment model fits your assortment?

What is the difference between FBA and FBM?

With Fulfilment by Amazon, or FBA, you send inventory to Amazon fulfilment centres. Amazon handles storage, picking, packing and shipping, along with the associated customer service and returns.

Your business still owns responsibilities such as product eligibility, preparation, inbound supply, replenishment and the commercial decisions around that inventory.

With Fulfilment by Merchant, or FBM, you organise order fulfilment through your own warehouse or a logistics partner. You need to ensure shipping, tracking, customer service and returns meet the applicable requirements.

This is a separate choice from Amazon 1P and 3P. Using FBA does not make Amazon the buyer of your products. Our article on Amazon 1P or 3P explains that distinction.

Compare total costs by product

Compare both routes for the same product, market and realistic selling period.

For FBA, include the applicable fulfilment and storage fees. Investigate preparation, inbound transport and potential additional costs, such as aged inventory, returns processing or removal.

For FBM, include warehouse space, pick-and-pack, packaging, shipping, returns and customer service. Add software, integrations and internal time where those costs arise from the chosen approach.

An existing warehouse does not make FBM free. Equally, using FBA does not remove every internal task.

Use Amazon’s current fee information and Revenue Calculator as inputs, then add your own logistics quotes and actual costs. Rates vary by product characteristics, market and service. A generic percentage provides too little insight.

Then assess what remains after other selling costs and advertising. The least expensive logistics route is useful only when the complete offer works commercially. See also more ecommerce revenue and less profit.

Factor in stock movement

A compact product with predictable demand needs a different assessment from a large seasonal item that sells slowly.

Review each product group:

• How stable is demand?

• How much stock is needed between replenishments?

• How long does new supply take?

• How much space does the packaged product occupy?

• What is the risk of returns or unsold inventory?

• Does the same stock also support other channels?

With FBA, decide how much inventory to send to Amazon and when to replenish it. Account for available capacity and your account’s current conditions.

With FBM, a shared inventory pool across channels may be attractive. It works only when stock figures are reliable and orders are processed correctly. A shared pool also needs clear priorities when several channels grow at once.

For international expansion, map the intended storage locations and applicable tax and product obligations. Have them assessed for your situation before activating the setup.

Assess delivery and service

The customer sees a product, a price and a delivery promise. That combination needs to be credible and consistently deliverable.

FBA can provide access to Prime delivery for eligible offers. It does not automatically make a product profitable or guarantee sales results. Check the current conditions and the actual customer promise.

For FBM, your operation or partner needs to deliver what you offer. Agree order cut-offs, tracking, peak capacity, returns handling and the process for missing or damaged shipments.

Also establish who notices a problem and who can act. A logistics partner may ship the parcel while your team still needs to resolve a stock discrepancy or account notification.

When could FBA, FBM or a combination fit?

FBA can be a useful candidate for eligible products with sufficient demand and economics that support storage and inbound supply. It may be particularly relevant when your operation finds the required Amazon order handling difficult to provide.

FBM can be a useful candidate when existing fulfilment is strong, you want to share stock across channels or product characteristics call for another approach. Delivery and total costs still need to be competitive.

A combination may suit an assortment with different demand patterns or logistics needs. Assign products for a clear reason and define who manages the additional stock and order flows.

Avoid a combination that looks flexible only on paper. Additional routes create value when the organisation can run them reliably.

Test with a manageable assortment

Select representative products and record expected costs, inventory needs and service levels. Choose a test period that reflects the demand pattern.

Then review together:

• Contribution after relevant variable costs.

• Availability and replenishment speed.

• Actual delivery performance and returns.

• Time spent managing exceptions.

• The effect on other sales channels.

A change in conversion cannot automatically be attributed to fulfilment. Keep pricing, advertising, content and seasonality in view. Define which findings would justify scaling, improving the setup or changing the route.

For the wider launch decision, use our Amazon readiness guide.

Conclusion

FBA and FBM are ways to deliver a commercial promise. The appropriate route depends on the assortment and the organisation behind it.

Start with a calculation by product group, test service and inventory requirements, and assign ownership of recurring decisions. Through Growth Strategy, BND helps connect that assessment to your brand’s wider channel and growth choices.

Sources and further reading

Fees, programme conditions and service requirements can change. Check the current information for your Amazon store and products.

• Amazon Netherlands: Fulfilment by Amazon

• Amazon Netherlands: selling and fulfilment fees

• Amazon Netherlands: fulfilment options