Amazon FBA vs FBM
Quick answer: FBA wins for most sellers because Prime eligibility lifts conversion 30-50% and Buy Box win rates favor FBA listings. FBM wins for very small / heavy / high-value items where FBA fulfillment fees become punitive, and for sellers who already have efficient warehousing for non-Amazon channels. The 30%-of-revenue all-in cost of FBA is the price of access to Prime customers.
| Criterion | FBA (Fulfilled by Amazon) | FBM (Fulfilled by Merchant) |
|---|---|---|
| Prime eligibility | Yes — automatic | Only via Seller Fulfilled Prime (strict requirements) |
| Conversion rate | +30-50% lift from Prime badge | Lower (no Prime, longer shipping displayed) |
| Buy Box win rate | Higher — Amazon prefers FBA | Lower for competitive listings |
| Per-unit fulfillment fee | $3.50-12+ (size/weight tiered) | $0 from Amazon (you pay shipping yourself) |
| Storage fees | $0.83-2.40/cuft monthly | $0 from Amazon (you pay your own warehousing) |
| Long-term storage penalty | $6.90/cuft after 365 days | None |
| Returns handling | Amazon handles + restocks | You handle |
| Inventory control | Limited — Amazon decides storage | Full |
| All-in cost (% of revenue) | 20-35% typical | 5-15% typical (your costs only) |
| Best for | Small-to-medium, fast-moving SKUs | Heavy / oversized / slow / high-AOV SKUs |
For SKUs in Amazon's "Standard Size" tiers (under 20 lbs, fits standard pick boxes), FBA fees are reasonable enough that Prime conversion lift more than compensates. The Buy Box advantage is significant — FBA listings win the Buy Box at 1.5-2× the rate of comparable FBM listings on contested products. Below 50 lbs and 18 inches, FBA is almost always the right choice for sellers who don't have a multi-channel warehousing operation already.
Oversized items. FBA fees on oversized goods (over 20 lbs, over 18" longest side) jump dramatically — sometimes 50-80% of item cost. Furniture, large appliances, and bulky home goods often economically force FBM.
Slow-moving SKUs. FBA charges aged-inventory penalties at 365 days. SKUs that don't turn 1-2× per year accumulate FBA storage debt that exceeds margin.
Sellers with existing 3PL relationships. If you're already running a 3PL or in-house warehouse for Shopify and other channels, the marginal cost of FBM is small. The Prime conversion lift may not justify duplicate inventory in two warehouses.
High-AOV considered purchases. $300+ items where customers research extensively and Prime urgency matters less. Conversion uplift from Prime is smaller in considered-purchase categories.
Amazon offers MCF — they fulfill your non-Amazon orders from FBA inventory. Useful for sellers who want a single fulfillment operation across all channels. Cost is roughly 1.3-1.6× FBA standard fees. Works for brands at $100K+/month total volume where the operational simplicity outweighs the premium.