Amazon FBA vs FBM: Amazon packages

Amazon FBA vs FBM Comparison Guide

In 2021, there are nearly 3 million active sellers on Amazon. And based on Jungle Scout’s 2021 State of the Seller Report, we know that nearly all Amazon sellers have different methods of finding success on Amazon.

A key differentiator among Amazon sellers is the fulfillment method they choose: Fulfillment by Amazon (FBA) and/or Fulfillment by Merchant (FBM). 

Nearly all Amazon sellers (92%) sell using Amazon FBA, and a two out of five (43%) use Amazon FBM. Broken out, Amazon sellers sell:

  • FBA only: 57%
  • FBA and FBM: 34%
  • FBM only: 9%

We’ll take a look at the primary differences between these two fulfillment methods — including which requires more experience and which is more profitable — as well as the factors you should consider when choosing whether to sell on Amazon FBA or FBM.

What’s the difference between Amazon FBA and FBM?

Fulfillment by Amazon (FBA): A method of selling on Amazon in which a seller (or a seller’s supplier) sends their products directly to Amazon’s warehouses. Amazon then stores the inventory and ships it directly to the customer (often through their 2-day Prime shipping). They also manage customer support.

Fulfillment by Merchant (FBM): A method of selling on Amazon in which a seller lists their products on Amazon, but manages all storage, shipping, and customer support themselves (or through another third-party).

Which one should sellers use?

For both small businesses or at-home sellers to major brands with elaborate supply chains, all sorts of Amazon sellers can benefit from both Amazon FBA and FBM fulfillment methods. But how do you choose what’s right for your business?

First, consider your sales strategy:

  • Private label: create own product label/brand
  • Wholesale: buying products directly from a brand or from distributors with extra stock in order to sell on Amazon
  • Retail Arbitrage: buying discounted products through retailers to sell on Amazon
  • Online Arbitrage: buying discounted products online to sell on Amazon
  • Dropshipping: buying products directly from a manufacturer who fulfills the order and ships directly to the customer
  • Handmade: creating/crafting own products to sell on Amazon

Then, there are six major factors you should consider before you select a fulfillment method on Amazon. 

  1. Size and weight of the product
  2. Control of customer experience
  3. Seller feedback
  4. Inventory turnover rate
  5. Logistics
  6. Expenses and fees

Below, this article goes into detail on those factors. 

Here is a quick overview of which method you should use based on those factors.

You should use FBM if…

  • You want more control over your customers
  • Your excellent customer service practices are in place
  • The products you sell are oversized or heavy
  • You already have logistics in place
  • You’re able to mitigate the expenses involved in fulfilling your own products
  • Your inventory turns over slowly

You should use FBA if…

  • The products you sell are small and lightweight
  • You’re okay surrendering control to your customers to Amazon
  • You want Amazon to handle your customer service
  • Your inventory turns over quickly
  • You do not have logistics in place
  • Your expenses would be higher if you fulfilled your own products

Can you use both FBA and FBM?

Yes. In fact, Jungle Scout’s data indicates that 34% of Amazon sellers sell both FBA and FBM. 

 If you have a large variety of products, you may consider using both to gain the benefits from the two. 

For example, imagine you sell two types of products. One product is oversized and turns over slowly. The second product is small and turns over quickly. To maximize your profits and minimize your expenses, you would use FBM to sell the large/slow-selling product and FBA to sell the small/fast-selling product.


1. Item size/weight

Amazon’s fee structure and logistics are beneficial to FBA sellers who have small, lightweight products that turnover quickly. Inversely, Amazon’s fees (specifically FBA fees and storage fees) are not conducive to selling oversized, heavy products.

To decide which fulfillment method works best for your product, you can use Amazon’s FBA revenue calculator to forecast fees and expenses.

Example 1. You are selling a garlic press FBM, exactly like the image below. Assuming that your price is $7.99 and that your cost to fulfill the product is $6.20, the fee to sell on Amazon is $1.20, and the cost of the product is $1.50. In this case, by selling FBM, you would lose $0.91 each sale.

$7.99 – ($6.20 + $1.20 + $1.50 = $8.90) = – $0.91

However, were you to sell the same garlic press via FBA, the costs would be less. While the cost of the product and the fee to sell on Amazon remains the same ($1.50 and $1.20 respectively), the fee to fulfill the product is $3.64 rather than $6.20.

$7.99 – ($3.64 + $1.20 + $1.50 = $6.34) = $1.65

In the end, by selling FBA, your profit is $1.65 per item (a 20.65% profit margin).


Amazon FBA vs FBM: cost analysis of a garlic press


Example 2. You are selling a kayak FBM, exactly like the image below. Assuming your retail price is $75 and your cost to fulfill the product is $28.00, fees are $11.25, and the cost of goods sold is $15. In this case, you would profit $20.75 (a 27.67% profit margin).

$75 – ($28 + $11.25 + $15 = $54.75) = $20.75

However, were you to sell the same kayak via FBA, you would have to account both for the cost to ship the product to Amazon and then to the end user (the FBA fee as described below). In the end, you only profit $4.13 (a 5.51% profit margin).

$75 – ($44.62 + $11.25 + $15 = $70.87) = $4.13


Amazon FBA vs FBM: cost analysis of a kayak


How do I ship products Prime with Amazon FBA vs FBM?

Both FBA and FBM sellers can ship products via Prime. Prime is a program Amazon offers its shoppers that award them benefits such as one or 2-day shipping. According to Amazon, Prime sellers compete more effectively than non-Prime members.

Products that are fulfilled by Amazon are automatically available for Prime benefits. However, products fulfilled by sellers can only sell via Prime if the seller is part of Amazon’s Seller Fulfilled Prime program. 

As of this writing, there is a waiting list to join the program, so there is no guarantee of entry.

2. Control of Customer Experience

FBM sellers store their own products, ship their own products, and handle all of the customer service for their Amazon sales. 

On the other hand, sellers who use FBA use Amazon to store and ship their products and handle customer service on their behalf. FBA sellers rarely, if ever, speak with their customers. As such, FBM sellers have greater control over their customer’s experience.

3. Seller Feedback

Amazon’s seller feedback system is a way for customers to communicate to Amazon their satisfaction with third party sellers and the resulting transactions.

Seller feedback has two components:

  • Star rating: Like a product review, the shoppers can rate the seller’s performance on a scale of 1-5.
  • Comments: In addition to the star rating, shoppers can leave comments on why they granted a certain rating to the seller.

Note that the seller rating is different from a product rating/review. The seller rating only covers the elements of the actual transaction such as shipping, whether or not the product matched its description on Amazon, and seller communication.

Because Amazon handles the majority of the steps involved in fulfilling FBA products, FBA sellers have less to worry about when it comes to seller feedback. In fact, if Amazon handles an FBA seller’s transaction and the seller receives negative feedback, the seller can request for the feedback to be removed.

Because FBM sellers have more control over their transactions, they are more susceptible to receiving negative seller feedback on Amazon.  As such, FBM sellers must focus more on the condition of the products they send, the speed at which they send them, and how they handle all communications with sellers.

4. Turnover Rates

A seller’s turnover rate is the speed in which they sell and restock inventory. An FBA seller’s turnover rate is important because Amazon tracks the length of time that inventory remains in this fulfillment centers.

The longer a product stays in a fulfillment center, the more storage fees the product accrues. Then, if a product is in an Amazon fulfillment center for 365 days or longer, Amazon starts charging the seller long-term storage fees.

Therefore, sellers with products that have slower turnover rates should consider fulfilling their own products to avoid Amazon’s expensive storage fees.

5. Logistics

Picking, packing, and shipping one’s own products can be incredibly time consuming. Therefore, it’s recommended that a seller just starting with Amazon who does not already have their own fulfillment logistics in place start with Amazon FBA. That way, they can focus on the other important elements of building a business using Amazon. 

For sellers who are adding Amazon as a new sales channel and already have logistics in place, they may still want to review whether or not Amazon FBA can save them money on fulfillment, especially if they sell and ship high-turnover products.

6. Fees

Amazon FBA sellers must pay FBA fees to ship goods via Amazon’s fulfillment network. FBA fees cover the costs to pick, pack, and ship the goods to the consumer. In a way, they are “shipping and handling expenses” that Amazon charges.

While Amazon FBM sellers do not have to pay FBA fees, they must still consider the expenses involved in handling and shipping their own products. This includes storage costs, labor costs, product packaging costs, and the actual cost to ship the product.

If these costs are greater than what the fees would be to let Amazon handle the fulfillment, the seller should consider using Amazon FBA.


What are the key differences between FBA and FBM sellers?

Beyond the methods they use to fulfill their products, we discovered a few key differences between sellers who use FBA and those who use FBM.

Which is more profitable: Amazon FBA vs FBM?

FBM sellers have more sales, while FBA sellers have larger profit margins

  • 33% of FBM sellers earn more than $25,000 per month in revenue versus 26% of FBA sellers
  • 37% of FBA sellers have profit margins over 20% versus 32% of FBM sellers

Which sellers get started selling faster: Amazon FBA vs FBM?

FBM sellers launched their Amazon businesses faster than FBA sellers.

  • 51% of FBM sellers took less than six weeks to get started on Amazon versus 34% of FBA sellers
  • 28% of FBM sellers realized a profit in fewer than three months versus 20% of FBA sellers

Which method requires less time to manage: Amazon FBA vs FBM?

FBA sellers spend less time on their business than FBM sellers.

  • 20% of FBM sellers spend more than 40 hours per week in the Amazon business versus 16% of FBA sellers
  • Both FBM and FBA sellers attribute their success on Amazon to having time to commit to their businesses (53% and 52%, respectively)

What are the top product categories for FBA and FBM?

Fulfillment by Amazon

Category Percent
Home & Kitchen 44%
Toys & Games 26%
Sports & Outdoors 24%
Health, Household & Baby Care 22%
Beauty & Personal Care 21%
Kitchen & Dining 19%
Office Products 19%
Tools & Home Improvement 17%
Grocery & Gourmet Food 16%
Garden & Outdoor 16%

Fulfillment by Merchant

Category Percent
Home & Kitchen 50%
Health, Household & Baby Care 29%
Toys & Games 29%
Sports & Outdoors 28%
Beauty & Personal Care 27%
Tools & Home Improvement 25%
Books 22%
Office Products 22%
Garden & Outdoor 21%
Kitchen & Dining 20%



Other Findings: Selling Amazon FBA vs FBM

FBA sellers are heavily focused on private label sales, while FBM sellers engage in other sales models at much higher rates.

  • 67% of FBA sellers use the private label business model versus 65% of FBM sellers
  • 41% of FBM sellers use the wholesale business model versus 31% of FBA sellers
  • 15% of FBM sellers use the dropshipping business model versus 10% of FBA sellers

FBM sellers tend to start with less start-up capital

  • 37% of FBM sellers started with less than $1,000 versus 27% of FBA sellers
  • 35% of FBA sellers started with more than $5,000 versus 27% of FBM sellers

FBM sellers have far more product listings on Amazon than FBA sellers (with more category diversity). 

  • More than half of FBA sellers (53%) have fewer than 10 products while  over half of FBM sellers (59%) have more than 50 products.
  • FBM sellers had a higher presence in all Amazon categories than FBA sellers

FBA sellers are less concerned with the effects of rising competition than FBM sellers

  • 39% of FBM sellers are concerned about increased competition driving down prices versus 32% of FBA seller
  • 32% of FBM sellers are concerned that Amazon sells products that compete directly with their own versus 28% of FBM sellers

For more Amazon seller data, see Jungle Scout’s 2021 State of the Amazon Seller Report.


54 comments on “Amazon FBA vs FBM Comparison Guide

  1. Excellent article. One thing I’m not clear on about FBM is available inventory… can the seller be out of stock, indicate so, and not be penalized for it, derated or discredited? On Ebay, you could just have 0 items available, and Ebay would just keep collecting listing fees, but nothing else. And the seller could add info to the listing to apprise customers of the situation and please check back etc.

    1. Hi Phil,

      If your FBM offer is out of stock, it will not be available on Amazon — It will be listed as inactive in your seller account. Though if you are out of stock for a while, your listing will lose ranking and may take some time to get that ranking back. When you add inventory, it will be live again on Amazon.

  2. Hi Dave, thanks so much for the information. Such an exceptional article! I have a question, hopefully you can help me sort it out. I’m planning to sell a few products on Amazon. However, some of them isn’t small size (think of it similar to the size of a 24-pack of water but slightly smaller) and I’m thinking how to best benefit from fba vs fbm. What size of the product do you think above which I should definitely use fbm?

    1. HI Nam,

      That question isnt easy to answer without knowing the exact size, weight, and price of your item. If you sell it at a high enough price to profit after Amazon’s fee and storage fees, then do FBA. If it is more profitable to ship yourself, then do FBM. You can also do both and see which is more beneficial to your business.

  3. Hey Dave! We have been selling on Handmade for years now. However the shipping prices are soaring and we are beginning to lose our profit. We cannot get any answers from Amazon on how to up our shipping prices. HELP!
    Lynne from Smoky Mountain Aquaponics.
    Thanking you in advance

    1. Hi Lynne,

      In your Handmade account, you’re not able to go into Shipping settings and update the pricing? Alternatively, you can offer “free shipping” while upping the price of your products to be sure you can cover the increased costs to ship.

  4. Hello Brian, me and my wife were planning to have two seperate fba stores, but we found an old article that says Amazon does not allow it. Is this true? If true how can we create multiple seller fba stores, seller stores so i can sell what i want and she can sell what she wants?

    1. Hi Jacques,

      If you are both in the same household, I would advise against opening separate seller accounts. You would need to get approval from Amazon to open a second seller account. Open one account then contact seller support with your case about opening a second account and explain your situation.

  5. Hey Dave, Great article and comparison. I appreciate your dedicated perspective. So for a start up , college student potentially selling small items, would you recommend FBM and moving to an FBA with an expected increase in product turnover overtime?

    1. Hi Ariana,

      If you are just starting out selling on Amazon with a few items, you can test the market fulfilling via FBM and move on to FBA. Though with FBA, you can send in as little or as much as you want to test as well.

      On your Amazon listing, you can offer both FBM and FBA fulfillment at the same time.

  6. Dave, thanks a lot for putting all this together!! Very detailed, broken to the smallest information and am thoroughly satisfied reading up… you’ve made it all sound simple.

  7. This is Asadullah from Afghanistan, currently a student at one of the universities in Saudi Arabia. I wanna start business in Amazon. Anyone please tell me what is better for me. FBA or FBM.

    1. Hi Asadullah,

      Which marketplace will you be selling on? In the US? FBA would be best so all of your products will already be in the country you are selling in.

  8. Thanks for the info.

    We sometimes have a hard time with keeping FBA stocked with our product. Is there any negativity in having the same products on FBA and FBM (so just in case we run out of FBA product the FBM will show for sale still).

    We always have stock in house, but send product in bulk to FBA to use their services of sending our product.

    My question is there anything negative to have FBA products at $4.99 and FBM products at $5.10. A higher price on FBM because if there is FBA stock we would like that product to be sold first.

    1. Hi Ty,

      Yes, you can have both an FBA and FBM Sku live at the same time. There is nothing negative with doing this. This is a great idea so your listing never goes out of stock.

    1. You can have Amazon label your FBA products but any products shipped through FBM will need to be done by you or another service provider.

  9. Great article! wonderful! I have some questions.
    First, about patent and trademark. How do I know the product I found on amazon or Alibaba not patented and trademarked?
    Second, about trademark for PL. Does amazon request the trademark for PL? Do I have to apply for the trademark for my brand and logo before my first order manufacture to legally sell?
    One more, PL will be created a new listing, will other sellers will resell same product under my listing? How to prevent it?

    1. Hi Mei,

      Thanks for reading! You can check to see if a product has a patent by doing a patent search on the USPTO website. There are some good videos on Youtube that explain how to do so.

      You do not need a trademark to begin selling your product on Amazon. You only need a trademark if you are going to enroll in Amazon Brand Registry.

      Technically, other sellers will be able to list their products on your listing. It may happen but it is rare if your product is clearly branded. By placing your logo on your product and product packaging will help prevent other sellers from going on your listing.

      Brand Registry can also protect you from that.

      – Brian

  10. If I decide to use the FBM, will I have to pay any fees before I sell or I will only pay a fee when customers start making orders?

    1. Hi Edgar,

      That depends on if you have a professional or individual seller account. The pro account is $39.99/month while the individual is free.

      In terms of selling fees, you pay those once a customer purchases your product. Amazon will pay you the difference.

  11. I sell books mainly, what about fba vs. fbm with prime? I have too much inventory at fba currently, and am considering shipping fbm with prime in the future. It looks like fbm without prime is very competitive

    1. Hi Jeff,

      If you have access to Seller Fulfilled Prime, that would be another good option to test out for your book sales.

  12. Good article Dave,
    We errred when we tried to sell catons of coffee cups on AMazon USA FBA. Storage killed us during Covid.
    We have now brought the cups ttto Auastralia (home) and we try FBM here.

    Would like to join your group as we now get back into Amazon.

    Do you have any kowledge of how Amazon AU is going? How are they tracking against Ebay?



  13. Great article. Thank you! I noticed that you refer to the 2021 state of the seller report in the first paragraph, but this points to the 2020 report from last year. Any chance that the new data is ready to be published yet?

  14. Very nice comparison post here, I am trying to build and scale my Private label business this year, my shop was establish at first in Romania, but as Amazon is only in the western countries of Europe, I’m planning to sell my backpacks and sunglasses to Amazon UK FBA . Costs are a bit higher, but I will give it a shot for FBA instead FBM . Let’s see how it works.

  15. Hi Brian,

    What an excellent article. You took such patience to lay our every detail.

    I have my own 3PL and would like to start selling thru Amazon too to supplement my website sales.

    What options are there for a FBM entity. Do you have to participate in the FBM Prime considering there is a few hoops to jump through including a trial period, etc. Do most FBM sales go through the FBM Prime channel? Can you participate as a FBM and ship FedEx Ground and just mirror what you offer for your website business.

    Do you know the fee structures?

    Many thanks Brian.

    1. Hi Adam,

      You can use FBM without doing Seller-Fulfilled Prime. You will need to start fulfilling your own orders through FBM before even being eligible for Prime. If you ship your products to an Amazon warehouse, then your products are automatically Prime through FBA. You can do both if you choose.

      We have a few posts on the Amazon fees that you can check out!

  16. Great article! I just started last month and sent my first shipment to AZ for FBA. My 2nd shipment is on its way now also. I am selling some, but I’m getting concerned with how long 2 of my shipments are just sitting in Delivered but haven’t been Processed. I’ve seen FB groups say I need to learn FBM for 2020, because all AZ warehouses are so backed up. Don’t know where to begin with FBM. Your thoughts (FBA/FBM) for this fall/2020? Any easy guidance for FBM and carriers that are dependable instead of USPS? FBA shipments are being split into several because I thought that would save, but it’s getting expensive when they divide them to 4-5 different warehouses. Thank you for any tips!

    1. Hi Jan,

      Yes, FBA warehouses are becoming backed up and may take longer to receive your shipments.

      You can create an FBM SKU under the same ASIN you are using for FBA. So basically you’ll have one offer for FBA and one offer for FBM. When fulfilling FBM orders, you are able to purchase shipping right in seller central and usually have the option from USPS, UPS, and Fedex.

      Keep some inventory on hand at your house/business so you can quickly ship out any orders. Make sure you have the proper supplies such as shipping boxes, labels, tape, bubble wrap etc.

      It is fairly simple once you ship a few orders. When you receive an FBM order, go into seller central to buy the label and confirm shipping. Once you order is marked as shipped is when you will see the payment in your balance. I hope this helps!

  17. Great article…learned quite a bit – thank you!
    ? on amazon advertising….we are a small brand and FBM. Dabbling in paying for amazon ads…trying manual targeting and automatic targeting…..sales are barely there.
    Do those brands who are FBA and advertise…get better results because of their status as FBA? What are other FBM sellers doing with advertising that is bringing in sales consistently? Thus far all the monies we’ve spent to advertise on amazon…haven’t proven to be worthy of the spend.

    1. Hi Barbara,

      Advertising an FBA listing has more of a chance of converting than an FBM listing because of Prime.

      Have you tried using FBA for your items?

  18. Question for you: in your example of selling a garlic press as FBA: $7.99 – ($3.64 + $1.20 + $1.50 = $6.34) = $1.65, don’t you have to also factor in the shipping cost to send your product to Amazon so they can handle fulfillment? Would I also have to pay a monthly FBA storage fee if my product takes a few months to sell? Lastly, I guess I would have to pay Individual per-item fee or subscription fee?

    So for your example again, would I be correct to state $7.99 -(shipping cost to send to Amazon warehouse + per item fee/subscription fee + storage fee + FBA of $3.64 + $1.20 + $1.50)?

    Thank you for your time to clear this up for me!

    1. Hi George,

      Yes, you do have to factor in the cost to ship into Amazon’s warehouses. Though they have great shipping rates so the cost is reasonable. Typically around 25-50 cents a pound depending on where it is going.

      Yes, you do have to pay monthly storage fees. Check out this post to get a better understanding of the storage fees:

      If you have the individual account, you will pay the 99 cent per-item fee and if you have a pro account, you will pay $39.99 per month.

  19. Dave,

    Great article and breakdown. WOW! So much information especially for the beginner. I’ve seen other adds and recordings that want to charge $6K to get you started. But, I am believing once I fully understand the process I can get started on my own. Am I kidding myself here?

    1. Hi Robert,

      Thanks for the comment! No, definitely not! You can absolutely get started on your own. There are a lot of great, free resources here on Jungle Scout and on our Youtube.

      Take the time to learn more and then jump right in!


  20. You should said:

    “31% of FBM sellers are concerned that Amazon sells products that compete directly with their own versus 27% of FBA sellers”

    Instead of:

    “31% of FBM sellers are concerned that Amazon sells products that compete directly with their own versus 27% of FBM sellers”

  21. First of all, this article is excellent. I’m still uncertain about what makes more sense for me. I’ve kept away from “storage fees” with FBA by shipping small amounts when necessary, but by doing so I incur lots of shipping to AMZ costs. AMZ shipping costs are probably way lower than anyone else can do but FBM people don’t have to pay that FBA fee, so that might be a wash. Mr. Hamrick mentions that shipping products that are “heavy” might be best for FBM. “Heavy” is kind of relative. In my case, one of the reasons beyond trust that people order my product from AMZ instead of from my Shopify website is because with AMZ, they don’t pay to return it, whereas i ask that they do when ordered from the website. I have the time to ship, so that’s no deciding factor. I have a new product category launching near the end of the year and am trying to decide which way to go.

    1. Great article Brian. Thank you for the detail information on comparisons for FBA vs FBM.

      Do you have an article on selling other people’s product vs selling your products on Amazon?


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