Amazon FBA vs FBM: Which Should You Use?

Amazon FBA vs FBM comes down to who handles storage, packing, delivery and returns. With Fulfilment by Amazon (FBA), Amazon does, and your listings become Prime-eligible. With Fulfilled by Merchant (FBM), you do, and you keep control of stock and costs. Neither is better in general. FBA usually suits small, fast-selling products; FBM usually suits bulky, slow or made-to-order ones. Most established sellers end up using both.

Fees and programme details below are from Amazon's UK pricing page and FBA overview, at the time of writing (October 2026). For the wider picture of starting out, see how to sell on Amazon UK.

Amazon FBA vs FBM at a glance

How FBA fees work

FBA charges two main things:

1. A fulfilment fee per unit, based on size tier and weight. Amazon's standard-size definition at the time of writing is up to 11.9kg, 45cm on the longest side, 34cm on the median side and 26cm on the shortest. Anything larger is oversize, and oversize fees climb steeply.
2. Monthly storage, charged on the average cubic volume your stock occupies. Rates are higher from October to December than January to September.

On top of those:

• A 1.5% fuel and logistics surcharge on fulfilment fees from 17 April 2026, which Amazon announced across its UK and European stores.
• An aged inventory surcharge on stock stored for long periods, and extra storage charges for dangerous goods.
• Removal and disposal fees if you pull stock out or have it destroyed.
• Low-Price FBA: Amazon's FBA page says products priced below £20 automatically get reduced fulfilment rates.

Amazon's revenue calculator gives the exact fee for a specific ASIN. Use it per product — averages hide the expensive outliers.

How FBM costs work

FBM has no Amazon fulfilment fee, but it is not free:

• Postage — your carrier rates, which depend on your volume
• Packaging — boxes, mailers, void fill, labels
• Labour — picking and packing time, even if it is yours
• Storage — your own space or a third-party warehouse
• Returns — you receive, inspect and restock them
• Customer service — FBM order queries come to you

Sellers often compare FBA fees with postage alone and conclude FBM is cheaper. Once labour and packaging are counted, the gap is usually smaller, and for small items FBA can be cheaper outright.

A worked comparison (hypothetical numbers)

Two products, both selling at £24.99. Numbers are illustrative only; use the revenue calculator for real ones.

Product A is the classic FBA product: small, light, standard, and a buyer choosing between near-identical cases will lean towards the one with Prime delivery. Product B is the classic FBM product: storage volume makes FBA expensive, and buyers of garden furniture expect a few days for delivery anyway.

Prime: how much does it matter?

For many consumer products, a great deal. Prime members filter by Prime delivery, and the badge signals fast, reliable delivery with Amazon handling any problems.

It matters less for:

• Specialist products where buyers are looking for the item, not the delivery speed
• Bulky goods where next-day delivery is not expected
• Made-to-order or personalised items, where dispatch takes time by nature

FBM sellers can get the Prime badge through Seller Fulfilled Prime, but the requirements — fast delivery coverage across most UK postcodes, weekend delivery, very low cancellation rates and high valid tracking, after a qualifying trial — are demanding. Check the current criteria in Seller Central's help pages before planning around it.

Account health differences

FBM orders count fully towards late dispatch rate, pre-fulfilment cancel rate and valid tracking rate. FBA orders do not, because Amazon is doing the dispatching. Order defect rate applies to both.

For a seller whose fulfilment is stretched — a busy Q4, a small team — moving the fastest movers to FBA removes most of the risk of breaching dispatch metrics. Amazon account health explains the thresholds.

Cash flow and stock risk with FBA

FBA has costs that do not appear on a fee table:

• Stock is committed upfront. You pay for goods, shipping into Amazon and prep before anything sells.
• Capacity limits. Amazon controls how much you can send in, based on your sales history and inventory performance. New sellers can find themselves constrained just as a product takes off.
• Slow sellers become expensive. Storage accrues every month; aged stock costs more; removal costs money too.
• Inbound delays. Stock can take time to be received and become available, especially in busy periods.

FBM avoids all of that, at the cost of doing the work yourself.

Preparing stock for FBA

The first FBA shipment is where most new sellers lose time. Amazon has strict requirements for how units arrive:

1. Labels. Each unit needs a scannable barcode Amazon can use — either the manufacturer barcode, if you are eligible to use it, or an Amazon label (FNSKU) that ties the unit to your account.
2. Packaging. Loose items, liquids, fragile goods and sharp items have specific prep rules — poly bags with suffocation warnings, bubble wrap, sealed containers.
3. Box contents. Shipment boxes need accurate contents information and weight limits respected; heavy boxes need marking.
4. Shipment plans. Seller Central decides where your stock goes, and splitting inventory across fulfilment centres can affect cost and how quickly it becomes available.

Getting any of this wrong means units are refused, re-labelled for a fee, or sit unavailable while the problem is sorted. Some sellers use a prep centre to handle labelling and packaging before stock goes to Amazon, which is an extra cost per unit worth including in the comparison.

Returns: the cost that differs most

Returns behave differently on each method.

• FBA: Amazon accepts the return, inspects it and decides whether it is sellable. Returned units that are fine go back into stock; damaged ones are marked unsellable and you choose removal or disposal. You do not handle the parcel, but you do pay the refund administration fee and lose the original fulfilment fee.
• FBM: You receive the return, inspect it and decide. You can resell a genuinely sound item quickly, but the handling time is yours, and you must issue refunds within Amazon's timeframes.

For categories with high return rates — clothing, footwear, electronics — FBA's handling can be worth a lot, but check the unsellable rate, because units marked unsellable and later disposed of are a direct loss.

Using FBA and FBM together

Running both is often the best answer:

1. FBA for the core range — the fast, small, standard products that drive most sales.
2. FBM for the long tail — slow sellers, bulky items, one-offs.
3. FBM as a backup offer on key FBA products, so you are not out of stock when FBA inventory runs out. Keep the backup offer priced sensibly and make sure you can actually fulfil it.
4. Multi-Channel Fulfilment if you also sell on your own site or other marketplaces and want one stock pool.

Running both channels from one stock pool needs stock syncing that works, or you will oversell — see automating eCommerce order processing.

How to decide, product by product

1. Run each product through the revenue calculator for both methods.
2. Add your real FBM costs: postage, packaging, labour, returns.
3. Weigh the Prime effect — how much does it matter in this category?
4. Check storage risk: how fast does it sell, and is it seasonal?
5. Check your own capacity, especially for peak season.
6. Review quarterly, because both fees and your sales velocity change.

A useful rule while you gather data: if a product sells several units a week, is small and light, and competes with other Prime offers, test it on FBA first. If it sells a few units a month, is bulky, or needs personal handling, keep it FBM until the numbers say otherwise. Then let the per-product calculation, not the habit, make the final call.

If one marketplace is all you are considering, it is also worth reading eBay vs Amazon for sellers, because bulky, used and slow-moving stock often sells better on eBay anyway. The eBay listing optimisation guide covers that side.

FBA shipment planning and the move from FBM to FBA are part of my Amazon seller support work, and the Amazon listing optimisation guide covers what happens on the listing once fulfilment is decided.