Fulfilled By Merchant Amazon FBM: Guide & How It Work 2025

Fulfillment by merchant (FBM) is a fulfillment method where Amazon sellers manage storage, packing, and shipping directly, rather than relying on Amazon’s logistics network. This approach offers greater control over operations, but also demands more responsibility. It can be a cost-effective solution for certain sellers, especially those with existing infrastructure. In this article, we’ll explore how fulfillment by merchant works, its pros and cons, costs, and whether it’s the right choice for your business in 2025.

What is fulfilled by merchant Amazon FBM

Fulfillment by Merchant (FBM) is a fulfillment model on Amazon where the seller is fully responsible for storing, packing, and shipping orders directly to customers. Unlike Fulfillment by Amazon (FBA), FBM sellers do not send inventory to Amazon’s warehouses or pay service fees for storage and handling.

Instead, they use their own facilities and logistics systems to manage the entire order lifecycle – from inventory control and packaging to last-mile delivery. This approach allows sellers to maintain full control over their operations, offering flexibility and potentially lower costs, especially for those with existing infrastructure or niche product lines.

Fulfillment by Merchant lets sellers store, pack, and ship orders themselves, offering full control and flexibility over the fulfillment process (Source: Internet)

Amazon fulfillment by merchant: Pros & Cons of FBM

Choosing Fulfillment by Merchant (FBM) means sellers take full responsibility for storing, packing, shipping, and customer service. This model offers flexibility and control, but also comes with operational demands. Below are the key advantages and disadvantages of using Amazon FBM:

Pros of Amazon FBM

Higher revenue potential: 33% of FBM sellers earn over $25,000/month, outperforming 26% of FBA sellers. Over 53% of FBM sellers report lifetime sales exceeding $100,000.
Lower startup costs: 37% of FBM sellers launched with under $1,000, while fewer FBA sellers achieved the same.
Faster business launch and profitability: 51% of FBM sellers got started within six weeks; 47% profited in under three months.
More flexibility in disruptions: FBM sellers can fulfill orders independently during peak seasons or global disruptions like COVID-19, when Amazon’s FBA services may be delayed or restricted.

Cons of Amazon FBM

Greater time commitment: 20% of FBM sellers spend over 40 hours/week managing their business, compared to 16% of FBA sellers.
Higher competition concerns: 72% of FBM sellers worry about pricing pressure, and 57% are concerned about competing directly with Amazon.
Customer service responsibilities: FBM sellers must manage their own support, returns, and feedback, unlike FBA where Amazon handles these tasks.
Potentially higher shipping costs: While FBM avoids FBA fees, individual shipping expenses can add up, making costs higher – especially for new sellers.

Amazon FBM offers higher revenue potential, lower startup costs, faster launch, and greater flexibility during disruptions compared to FBA (Source: Internet)

How does Amazon FBM work?

Fulfillment by Merchant allows sellers to list and ship their products on Amazon while handling storage, packing, and delivery independently or via a third-party logistics provider. Here’s a step-by-step breakdown of how Amazon FBM operates:

Create an Amazon Seller Central account: Sign up and gain access to tools that allow you to list products, manage orders, and track performance.
List your products on Amazon: Upload product information, including descriptions, pricing, and images. Optimize listings with high-quality visuals and SEO-friendly content to improve conversion rates.
Develop a smart marketing strategy: With high competition on the platform, it’s important to allocate budget wisely across Amazon ads and promotional campaigns to boost visibility.
Store your inventory: Use your own warehouse, a rented storage unit, or even a home setup. Larger sellers may distribute stock across multiple fulfillment locations to optimize delivery speed and reduce shipping zones.
Ship orders efficiently: When an order is placed, you are responsible for fulfilling it within the promised delivery window. You can purchase shipping labels through Amazon or use your own carrier – just ensure tracking is always provided.
Manage returns and customer service: Set up valid return policies and addresses in your seller account. Once a return is approved, Amazon will generate a return label using the default return address you provide.

Amazon FBM lets sellers manage listing, storage, shipping, and returns independently, offering full control over the entire fulfillment process (Source: Internet)

Amazon FBM requirements

To successfully utilize FBM on Amazon, sellers must adhere to specific requirements that ensure efficient order processing and customer satisfaction. Here are the key requirements for Amazon FBM:

Selling Account: Sellers must have an active Amazon Seller account, preferably a Professional account, to access the full range of FBM features and tools.
Product Listings: Sellers need to create product listings that comply with Amazon’s guidelines. This includes providing accurate product information, images, and pricing.
Shipping Settings: Sellers must configure their shipping settings, including handling times, shipping rates, and return policies. Accurate shipping templates are crucial for setting customer expectations and avoiding cancellations.
Inventory Management: Maintaining accurate inventory levels is essential to prevent stockouts and ensure timely order fulfillment. Sellers should regularly update their inventory in Seller Central.
Order Fulfillment: Sellers are responsible for picking, packing, and shipping orders promptly. They must also provide tracking information to customers and handle returns efficiently.
Performance Metrics: To maintain a good standing on Amazon, sellers must meet performance metrics related to order defects, late shipments, and customer feedback. Consistently meeting these metrics can also qualify sellers for programs like Seller Fulfilled Prime.

How to enroll in Amazon FBM?

Enrolling in Amazon’s Fulfillment by Merchant program is a straightforward process that allows sellers to manage their own inventory and fulfill orders directly. Here’s how to get started:

Create a selling Account: If you do not already have an Amazon Seller account, visit Amazon Seller Central and sign up. It is recommended to choose a Professional selling account to access all FBM features.
List your products: Once your account is set up, you can list your products. You can either match your offers to existing product listings or create new listings for products not yet in Amazon’s catalog. If you own a brand, consider enrolling it with Amazon to unlock additional tools and protections.
Configure Shipping and Return settings: Set your shipping options, including handling times, shipping rates, and return policies. You can use templates to streamline this process and ensure that your settings align with your operational capabilities.
Manage inventory: Regularly update your inventory levels in Seller Central to reflect stock availability. This helps prevent overselling and ensures timely order fulfillment.
Fulfill orders: When you receive orders, you will be responsible for picking, packing, and shipping the products. Make sure to provide tracking information to customers and handle any returns according to your policies.
Monitor performance: Keep an eye on your performance metrics through the Account Health dashboard. This will help you maintain compliance with Amazon’s standards and improve your seller rating.

How much does fulfillment by merchant Amazon FBM cost?

The cost of using Fulfillment by Merchant on Amazon varies based on several factors, including selling plans, referral fees, and shipping expenses. Here’s a breakdown of the primary costs associated with FBM:

Selling Plan Fees:
- Individual Plan: $0.99 per item sold.
- Professional Plan: $39.99 per month, which is more economical for sellers who sell more than 40 items monthly.
Referral Fees: These fees are a percentage of the total sales price, including shipping, and vary by product category. Referral fees typically range from 6% to 45%, depending on the type of product sold. For example, electronics may incur a fee of around 8%, while certain accessories can reach up to 45%.
Shipping Costs: Sellers are responsible for shipping expenses, which can vary based on the carrier and service level chosen. While Amazon provides shipping credits, these often do not cover the full shipping costs, requiring sellers to pay the difference.
Fulfillment Costs: If sellers choose to outsource fulfillment to third-party logistics (3PL) providers, they should account for additional fees, which can range from $0.75 to $1.50 per square foot of inventory, along with labor and operational costs.
Additional Fees: Depending on the nature of the products, sellers may encounter other fees, such as closing fees for media items or rental fees for textbooks.

The cost of Fulfillment by Merchant depends on selling plans, referral fees, and shipping costs (Source: Internet)

Amazon FBM vs. Amazon FBA

Here’s a comparison table between Fulfillment by Merchant and Fulfillment by Amazon (FBA):

Criteria	Fulfillment by Merchant (FBM)	Fulfillment by Amazon (FBA)
Fulfillment Management	Sellers manage their own inventory, packing, and shipping.	Amazon handles all aspects of fulfillment, including storage, packing, and shipping.
Cost Structure	Sellers incur costs related to shipping and storage, which can vary based on their logistics setup.	Sellers pay for storage and fulfillment fees, which can add up, especially for larger or slower-moving items.
Customer Experience	Sellers can customize packaging and shipping methods, but are responsible for customer service and returns.	Products fulfilled by Amazon are eligible for Prime shipping, and Amazon manages customer service and returns.
Sales Potential	FBM may limit exposure to Amazon’s vast customer base, particularly Prime members.	FBA listings often receive better placement in search results and have a higher chance of winning the Buy Box.
Order Processing Time	Processing time depends on the seller’s capabilities.	Amazon typically processes orders quickly, often within 1-2 days.

Should your business use Amazon FBM?

Using Fulfillment by Merchant can be beneficial for your business, depending on your specific needs and capabilities. Here are some key points to consider:

Control Over Fulfillment: FBM allows you to manage your own inventory, packaging, and shipping, giving you greater control over the customer experience and branding.
Cost Efficiency: This method can be more cost-effective, especially for sellers with logistics expertise. You avoid the fees associated with Fulfillment by Amazon (FBA), which can be significant for larger items.
Flexibility: FBM provides the flexibility to adapt your fulfillment strategies based on demand fluctuations, making it suitable for businesses with varying sales patterns.
Customer Interaction: With FBM, you can engage directly with customers, enhancing satisfaction through personalized service and direct handling of inquiries and returns.
Sales Potential: However, FBM may limit your exposure to Amazon Prime customers, which can impact sales. FBA products often benefit from better visibility and a higher chance of winning the Buy Box.

Using Fulfillment by Merchant can be beneficial for your business (Source: Internet)

Simplify FBM: Fast, Efficient, and Affordable with Keys Logistics

Keys Logistics empowers Amazon sellers with a comprehensive fulfillment solution tailored for Fulfilled by Merchant (FBM). With an extensive global distribution network and multimodal transportation options – including air, sea, road, and rail – we ensure your products reach customers swiftly and reliably. Our seamless integrations with leading ecommerce platforms such as Shopify, Amazon, eBay, and TikTok Shop allow for real-time order synchronization, reducing manual effort and fulfillment errors.

Whether you’re shipping small parcels or bulky items, Keys Logistics offers scalable, cost-effective FBM support, backed by a 99.5% on-time delivery rate and partnerships with over 500 trusted carriers like UPS, FedEx, and DHL. Trusted by thousands of global businesses – from agile startups to major brands – we help you streamline logistics, cut costs, and scale with confidence.

Fulfillment by Merchant is an increasingly popular choice for sellers seeking control, flexibility, and cost-efficiency in managing their Amazon operations. By handling storage, packing, and shipping independently, businesses can optimize their logistics processes and adapt quickly to market demands. Understanding the pros and cons, costs, and setup process is essential to deciding if this model aligns with your business goals.

If you’re ready to streamline your FBM operations with a trusted logistics partner, contact us at Keys Logistics for tailored, scalable fulfillment solutions.