Introduction
Welcome to the Amazon marketplace competitive world. The choice of fulfillment method is one of the most influential and the initial one that any Amazon seller will make. This decision has a direct impact on your workload, cost of operation, and customer experience. Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) are the two main models of fulfillment.
This guide will give a clear and detailed analysis of the FBM model. We will analyze its operations, advantages, and disadvantages to provide you with the precious knowledge you need to decide whether it is the appropriate solution for your e-commerce company.
Understanding the Core Concepts: What is FBM?
Fulfillment by Merchant (FBM), also known as seller fulfilled, is a straightforward business model: you, the seller, are responsible for the entire fulfillment process from start to finish.
When someone orders one of your products in your Amazon store, it is up to you to fulfill that order. This includes four key areas:
- Warehousing: You will have to keep your own stock. This may be in a small area, a specific warehouse, or a third party logistics (3PL) provider.
- Packaging: It is your duty to pick the right item, pack it, and ship it.
- Shipping: You have to choose a shipping company, buy postage, and make sure that the package is delivered to the Amazon customers within the promised time.
- Customer Service: You handle all customer inquiries, returns directly and customer service on the order.
To the point, FBM is a practical method. It is the direct opposite of Amazon FBA where sellers ship their products to the Amazon fulfillment centers and Amazon handles the storage, packaging, shipping and customer service on their behalf.
FBM vs. FBA: A Detailed Side-by-Side Comparison
The method of fulfillment is a very important operational choice. We shall compare FBM and FBA on some of the most important business factors.
Cost and Fee Structures
The cost of FBM and FBA is vastly different. Under FBA, sellers incur a range of convenience charges, such as monthly inventory storage charges, per unit shipped fulfillment charges, and possible long-term storage charges on products that do not sell fast.
Under Amazon FBM, the expenses are more direct. You continue to pay the normal Amazon referral fee on every sale, but you do not pay any FBA-related fees. Rather, your fulfillment expenses are:
- Your real expenses of warehousing and storage.
- Your packaging material prices.
- The direct shipping rates to such carriers as FedEx or USPS.
The Amazon FBM fees model can be more profitable to sellers whose products have low profit margins or are large and heavy since they do not have to pay the high FBA fees that are charged on such products.
Inventory Control and Branding Flexibility
Control is the main benefit of FBM. Under FBA, your stock is included in the huge network of Amazon and it cannot be easily accessed or inspected. FBM gives you full control over your inventory and supply chain, which enables you to have a better multi-channel stock management and instant quality control.
Branding is also subject to this control. FBA deliveries come in regular Amazon packaging, which provides a generic customer experience. FBM, though, enables you to use your own custom-branded boxes, add marketing inserts, and add a personal touch.This makes a simple delivery into a brand interaction, which can be used to create customer loyalty.
Shipping Performance and Prime Eligibility
One of the strongest conversion tools on the site is the Amazon Prime badge, which indicates quick and free delivery to millions of customers. FBA products are automatically eligible to Prime.
In the case of FBM sellers, it is extremely hard to receive the Prime badge. The designated route was the Seller Fulfilled Prime (SFP) program, but as of 2025, Amazon severely limits new enrollments. As a result, the majority of FBM sellers have to compete with each other by providing their own fast and reliable shipping and establishing trust by means of high performance indicators.
| Factor | FBM (Fulfilled by Merchant) | FBA (Fulfilled by Amazon) |
| Cost and Fee Structures | Seller manages warehousing, storage, and shipping costs. | Amazon charges per unit shipped fulfillment fees, monthly storage fees, and long-term storage fees for slow-selling items. |
| Seller pays for packaging materials. | Seller does not pay for packaging materials (Amazon provides it). | |
| Seller pays direct shipping costs to carriers like FedEx or USPS. | Amazon manages shipping, included in fulfillment fees. | |
| Inventory Control and Branding Flexibility | Full control over inventory and supply chain. | Inventory stored within Amazon’s vast network, not easily accessible. |
| More flexibility in multi-channel stock management and quality control. | Limited flexibility in quality control as Amazon handles the fulfillment. | |
| Allows for custom-branded boxes and marketing inserts. | Generic Amazon packaging with no ability to customize branding. | |
| Shipping Performance and Prime Eligibility | Difficult to receive Amazon Prime eligibility. | Automatically eligible for Amazon Prime, which boosts visibility and trust. |
| Seller must rely on fast, reliable shipping and high performance indicators to build trust. | Prime badge is a strong conversion tool due to quick, free shipping. |
Who Should Choose the FBM Model? A Practical Checklist
FBM does not suit all sellers. It is a tactical decision that is most effective in certain types of business. This model may be more suitable for you in case you belong to the following categories:
- You Sell Unique or Small-Volume Products: When your sales volume is low, FBM can help you to eliminate the repeated FBA storage charges that can eat up profits on slow-moving products.
- You Sell Large, Heavy, or Bulky Items: FBA charges on oversized products are extremely high. It is usually much cheaper to handle the shipping of these products yourself.
- You Have an Existing Logistics Network: In case you already have an ecommerce fulfillment network with another site or retail store, it is a rational and economical approach to integrate FBM.
- You Care More about Brand Experience than anything: In case a distinctive unboxing customer experience and custom packaging are the key elements of your brand, FBM is the only fulfillment service that offers such a degree of control.
- You Have a Multi-Channel Business: FBM makes it easier to manage inventory when selling on more than one platform because you can serve all the orders with a single central inventory point.
The Hidden Challenge of FBM & The Smart Solution
Although FBM provides a lot of control, its main weakness is that it is very demanding in terms of time and resources. The day-to-day routine of order fulfillment, picking, packing, creating shipping labels, shipment management, and returns processing is a labor-intensive process that does not allow you to concentrate on business development.
However, what would happen if you were able to retain the control of FBM and offload the manual labor?
That is what a special dropshipping agent such as SpeedBee Dropship provides. We are your professional fulfillment center. You are in full control of your brand and inventory, but you outsource the whole order fulfillment process to a group of logistics professionals.
Working with us on your FBM activities, you will receive:
- Time to Focus on Growth: We manage warehousing and shipping, and you can focus on marketing, sourcing of products and business strategy.
- A Better Brand Experience: We package your brand in your own personalized packaging so that your brand has a personal touch with each order.
- Shipping and Logistics: Our professional network will be able to get better shipping rates and service that will enhance your margins and customer satisfaction.
- Smooth Scalability: Our systems are built to support the changing volumes of orders, and you can expand without logistical bottlenecks.
To know more about our support to the modern amazon merchant, you can visit us at https://www.speedbeedropship.com/.
How to Succeed with FBM (Even Without the Prime Badge)
Success as an FBM seller without the Prime badge requires operational excellence, particularly in shipping and customer service.
Master Your Shipping Templates for Speed and Profit
Take advantage of shipping settings in Amazon Seller Central. Rather than charging a flat rate, develop granular templates that provide customers in local geographical areas with faster and cheaper shipping. Use services such as Amazon Buy Shipping to buy shipping labels at a reasonable price and cover your seller metrics against some claims related to delivery.
Turn Customer Service into Your Competitive Advantage
This is where an FBM seller can really shine. Although FBA customer service is effective, it is also standardized. Being an FBM seller, your customer support service can be quick, personal, and very efficient. Being fast and solving problems in a graceful manner can transform a bad experience to a good one, establishing good customer relationships and increasing customer satisfaction. This is a priceless communication channel.
Quick Start: Setting Up Your FBM Listing in 5 Steps
The process of starting with FBM is easy. Suppose you have an Amazon Professional Selling Plan, do the following:
- Sign in to Amazon Seller Central: This is your control center to manage your Amazon store.
- Add a New Product: Click on the inventory tab and choose to add a product.
- Enter Your Offer Details: Enter your price, condition and the quantity you are offering.
- Select Your Fulfillment Method: On the bottom of the page, choose the following option: I will ship this item myself (Fulfillment by Merchant). This formally makes the listing seller fulfilled.
- Save and Finish: Fill in the rest of the information and save your listing. It is already on Amazon, and you are about to take your first FBM order.
FBM or FBA: Making the Final Call for Your Business
The FBM vs. FBA debate does not have a right or wrong answer; it has the one that suits your business better. FBA is a great fulfillment solution for sellers who desire to take advantage of the strong logistics network and the popularity of Prime and have the profit margins to cover its costs.
FBM, on the other hand, is the option that sellers who need more control over their business, brand, and customer relationships. It requires greater direct participation but provides greater flexibility and, in many cases, better margins.
You also now know that there is a third option, a hybrid one, in which you apply FBM but collaborate with a fulfillment expert. This will enable you to maintain the control and branding advantages of FBM and outsource the physical work, which is strenuous. It is a contemporary remedy that aims at transforming the issue of fulfillment into a competitive edge. The choice is yours.
