With FBA (Fulfillment by Amazon), you send stock to Amazon's fulfilment centres and Amazon picks, packs and ships each order, handles customer service and processes returns. With FBM (Fulfilled by Merchant), you store and ship orders yourself and set your own shipping rates and handling times. Either way, Amazon's selling plan and referral fees still apply, as of October 2026, so the real choice is who does the work and which extra fees you take on.
Most new Amazon sellers ask which one is better, but the honest answer depends on what you sell and how much of the work you want to keep. I read Amazon's own FBA, FBM and selling fees pages to lay out what changes between the two and what stays the same.
FBA and FBM side by side
| FBA (Fulfillment by Amazon) | FBM (Fulfilled by Merchant) | |
|---|---|---|
| Who stores the stock | Amazon's fulfilment centres | You, in your own space or warehouse |
| Who packs and ships | Amazon | You, with your own shipping rates, capacity limits and handling times |
| Customer service and returns | Amazon handles both | You do, with Amazon's prepaid returns label programme for US sales |
| Prime | Customers get free two-day shipping through Prime | Possible through Seller Fulfilled Prime once you meet performance requirements |
| Extra Amazon fees | Fulfilment fees based on each product's sale amount, weight and size, plus monthly storage | Your own shipping, or labels bought through Amazon Buy Shipping |
| Products it suits | Eligible products that sell steadily | Heavy, bulky, slow-moving or temperature-sensitive items that can't go through FBA |
| Selling plan | Individual 0.99 dollars per item sold, or Professional 39.99 dollars a month | Same plans |
| Referral fee | A category percentage with a 0.30 dollar minimum | Same referral fee |
What Amazon charges whichever you pick
Amazon splits its standard selling fees into two parts, as of October 2026. The selling plan is either Individual, at 0.99 dollars per item sold, or Professional, at 39.99 dollars a month. Then there's a referral fee on every item sold: a percentage of the total sale or a minimum amount, whichever is greater. Amazon's own table shows 15% for backpacks, handbags and luggage and 8% for computers, both with a 0.30 dollar minimum.
Those don't change when you switch fulfilment. What changes is everything after the sale. That's why comparing FBA's fulfilment fees with your own packing and postage is the fair test, and Amazon's Revenue Calculator lets you compare an FBA estimate with your own fulfilment method for the same product.
The FBA charges that grow quietly
Storage is charged monthly, based on the daily average space your stock takes up in cubic feet. Anything sitting in a fulfilment centre for more than 181 days picks up an aged inventory charge every month. Amazon also lists returns processing on orders where it gives the customer free return shipping, a per-item charge to remove, dispose of or liquidate stock, and an inbound placement service for spreading your inventory across centres.
There's help at the start. New Professional sellers get 100 dollars off shipments into Amazon's network using its Partnered Carrier programme and a 400 dollar credit for inbound placement, and Amazon's FBA New Selection programme gives free storage and customer returns if you create an FBA shipment within 90 days of listing your first buyable product. Amazon's own claim is that shipping with FBA works out 70% less per unit than comparable premium options from other major US carriers.
What FBM gives you instead
Control. You set your own shipping rates, capacity limits, handling and transit times, or let Amazon's Shipping Settings Automation calculate delivery dates. Amazon says sellers using that tool sold 10% more units on average in its own study. You can buy labels through Amazon Buy Shipping, which Amazon says offers rates over 31% lower on average than retail ground rates for UPS, FedEx and USPS, and Veeqo, an Amazon company, manages stock and labels across Amazon, eBay, Etsy, Shopify and Walmart.
The trade-off is accountability. Amazon expects you to confirm shipment within your stated handling time, and its Account Health dashboard tracks your order defects, late shipments, pre-fulfilment cancellations and valid tracking rates.
Which one to choose
- You sell small, steady sellers and want Prime without hiring help: FBA, and enrol inside 90 days of your first listing to get the New Selection perks.
- You sell heavy, bulky, fragile or temperature-sensitive products: FBM, because some of those can't go through FBA at all.
- You sell the same stock on your own website or other channels: FBM with a multichannel tool keeps one stock count.
- You're testing a product and don't know if it'll move: start with FBM so slow stock doesn't run into aged inventory charges.
- You've proven demand and want to scale: move your best sellers to FBA. You can choose some or all of your eligible products, so mixing both is normal.
If you're still deciding whether Amazon is right for you, here's how to sell on Amazon and make money, and if you go the FBM route, compare the best shipping software for small businesses.
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My advice on FBA or FBM
Run the numbers per product, not for your whole shop. Put each product through Amazon's Revenue Calculator, add your honest packing time to the FBM side, and look hard at how fast it sells, because storage and aged inventory charges punish slow stock. I'd point most small sellers to FBM first and FBA for the proven lines.
Frequently asked questions
Can you use FBA and FBM at the same time?
Yes. Amazon says you can select some or all of your eligible products for FBA, so many sellers ship their best sellers through FBA and fulfil the rest themselves.
Can FBM sellers get the Prime badge?
Yes, through Seller Fulfilled Prime, once you meet Amazon's performance requirements. It puts the Prime badge on your offers while you ship from your own warehouse.
What happens to FBA stock that doesn't sell?
Amazon charges an aged inventory charge every month for items stored for more than 181 days, and you can pay a per-item charge to have stock returned, disposed of or liquidated.
Who handles returns with FBM?
You do. Amazon automatically enrols FBM sellers in its prepaid returns label programme for US sales and authorises return requests that meet its returns policy.
