One of the first operational decisions a brand selling on Amazon must make is how their products will be fulfilled: by Amazon (FBA) or by themselves (FBM). For international brands, this choice has particularly significant implications. Here's a complete comparison.
What is FBA?
Fulfilment by Amazon (FBA) means you ship your products to Amazon's fulfilment centres, and Amazon handles all storage, picking, packing, shipping, and customer service for those orders. When a customer orders your product, Amazon fulfils it — you never touch it again after it reaches their warehouse.
What is FBM?
Fulfilment by Merchant (FBM) means you (or a third-party logistics partner) store your products and fulfil orders yourself when they come in through Amazon. Amazon processes the payment and provides the customer interface, but the physical fulfilment is your responsibility.
The Case for FBA
Prime Eligibility
FBA products are automatically eligible for Amazon Prime — two-day (and often next-day or same-day) shipping. Amazon Prime has over 200 million members globally, and Prime members spend significantly more than non-Prime members. The Prime badge is a conversion driver that FBM sellers struggle to match.
Buy Box Advantage
Amazon's Buy Box algorithm significantly favours FBA sellers. The Buy Box — the "Add to Cart" button on a product listing — drives the majority of Amazon purchases. FBA sellers win the Buy Box at significantly higher rates than FBM sellers at equivalent prices, because Amazon trusts its own fulfilment network.
No Fulfilment Infrastructure Needed
For international brands, FBA is the obvious choice because it eliminates the need for US warehousing, staffing, and logistics entirely. Your products travel from your factory to Amazon's fulfilment centres — everything else is handled. This is the core reason ImportIQ uses FBA for virtually all brand partners.
Customer Service Handled by Amazon
FBA includes Amazon handling all customer service for orders — returns, refund requests, delivery issues. This is a significant operational saving, particularly for international brands who would otherwise need a US-based customer service operation.
The Case for FBM
Lower Cost for Slow-Moving or Large Items
FBA charges monthly storage fees, and products that don't sell quickly accumulate these fees. For large, heavy, or slow-moving products, FBM can be more cost-effective — particularly if you have existing warehouse infrastructure.
More Control Over Packaging
FBM gives you full control over the unboxing experience — custom packaging, inserts, handwritten notes. FBA packs orders in Amazon's standard packaging, which limits your ability to create a distinctive brand experience.
No Long-Term Storage Fees
FBA charges elevated long-term storage fees for inventory held for more than 365 days. For seasonal products or slow-moving SKUs, this can add up significantly. FBM eliminates this risk.
Seller-Fulfilled Prime (SFP)
A limited programme that allows high-performing FBM sellers to offer Prime shipping from their own warehouses. The bar to qualify is high (99%+ on-time delivery, next-day cut-off times), and the programme has been largely paused for new applicants. Not a realistic option for international brands without US operations.
FBA Fees: What to Budget
FBA is not free — understanding the fee structure is essential for margin calculations:
- Fulfilment fees — charged per unit shipped, based on weight and dimensions. A standard-size product under 1 lb typically costs $3.22–$4.18 to fulfil.
- Monthly storage fees — $0.87/cubic foot (Jan–Sep) or $2.40/cubic foot (Oct–Dec, the holiday peak period). Higher storage rates in Q4 are a significant cost for brands with heavy inventory.
- Inbound placement fees — charged when Amazon splits your shipment across multiple fulfilment centres to optimise their network. Can be reduced by using Amazon's preferred placement programme.
- Returns processing fees — for certain categories, Amazon charges a returns processing fee when customer return rates exceed category thresholds.
When to Use Both: The Hybrid Approach
Some brands use a hybrid approach — FBA for their core SKUs (ensuring Prime eligibility and Buy Box performance) and FBM for slower-moving products where FBA storage fees would make the economics unattractive. This requires maintaining two operational streams but gives flexibility to optimise margins by SKU.
Our Recommendation for International Brands
For international brands entering the US market, FBA is almost always the right choice. The operational simplicity of shipping direct to Amazon and letting them handle everything — storage, fulfilment, customer service, returns — eliminates the need for US infrastructure that would otherwise be a significant barrier to entry.
The Buy Box and Prime advantages compound over time as your brand grows. The brands that win on Amazon long-term are almost universally FBA sellers.
The exception cases for considering FBM are: very large/heavy products where fulfilment costs are prohibitive, highly seasonal products with significant storage cost risk, or brands with existing US warehouse infrastructure and the operational capability to meet Amazon's FBM performance standards.
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