Amazon continues to dominate global eCommerce in 2025, and sellers now have more fulfillment options than ever. One model gaining renewed attention is Amazon FBM (Fulfilled by Merchant) — a method where the seller stores inventory, packs orders, ships products, and manages customer service independently rather than relying on Amazon warehouses.
If you’ve ever wondered whether FBM is the right fulfillment method for your business, this guide breaks down exactly how it works, what you need to qualify, the true costs, and how to sell on Amazon FBM successfully. Whether you are launching your first product or transitioning from FBA, this 2025-ready guide gives you the clarity you need.
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What Is Amazon FBM? ( Fulfillment by Merchant?)
Amazon’s Fulfillment by Merchant (FBM)—also referred to as Merchant Fulfilled Network (MFN)—is a fulfillment model in which the seller takes full responsibility for storing inventory, packing orders, and shipping products to customers who purchase through Amazon. Instead of relying on Amazon’s warehouse network, you either handle fulfillment in-house or partner with a specialized third-party logistics provider (3PL).
The process is simple from a structural standpoint: every time an order comes in, you’re the one ensuring it’s picked, packed, and delivered on time. Because you control the entire fulfillment workflow, maintaining accurate shipments, meeting delivery timelines, and handling customer returns becomes crucial. Any delays or errors can affect your seller metrics and overall performance on Amazon.
Amazon previously offered Seller Fulfilled Prime (SFP)—a program that allowed efficient FBM sellers to earn the Prime badge by meeting strict shipping and service standards. However, with the program still on a waitlist, new or existing FBM sellers currently don’t have a pathway to gain the Prime badge.
FBM is often favored by sellers dealing with low-margin items, oversized products, or inventory that isn’t ideal for Amazon’s FBA storage fees. Although it’s commonly overshadowed by the convenience of FBA, FBM provides greater control over operations, cost flexibility, and the ability to maintain tighter oversight of the customer experience.
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How to Sell with Amazon FBM
Selling on Amazon is a powerful way to earn extra income or grow an existing business. Millions of sellers worldwide use Amazon to reach customers and scale their operations. Here are some stats to consider:
64% of Amazon sellers are profitable within a year
14% of Amazon sellers have lifetime profits over $100,000
64% of sellers spend fewer than 20 hours per week on their Amazon business
Your experience will be unique, so the first step is deciding what kind of business you want to build. In this guide, we’ll walk through everything you need to know to sell using Amazon FBM—from choosing your marketplace to managing inventory, shipping, and customer service.
Step 1: Select Your Marketplace
Amazon has 20 global marketplaces:
Australia, Belgium, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Netherlands, Poland, Saudi Arabia, Singapore, Spain, Sweden, Turkey, United Arab Emirates, United Kingdom, United States.
Guidelines to choose the right marketplace:
US sellers: Start with the US marketplace. It’s the largest, easiest to navigate, and has the highest traffic.
EU / UK sellers: Use the EU marketplace (UK, Germany, France, Spain, Italy, Poland, Netherlands). Slightly more complex due to language and taxation, but convenient for EU sellers.
Other regions: Start with the US marketplace even if your country has a local marketplace. Traffic and sales potential are higher, simplifying your initial operations.
Step 2: Select Your Business Model
Amazon supports a variety of business models, depending on your budget, time, and product strategy. Tools like Jungle Scout can help identify high-demand, low-competition products.
Common models include:
Private Label
Private label is manufacturing your own brand products in bulk
59% of Amazon sellers use this
Wholesale
Buying branded products in bulk and reselling
26% of sellers use wholesale
Reselling / Arbitrage
Retail or online arbitrage (buy low, sell high)
26% use retail arbitrage; 23% use online arbitrage
Dropshipping
You sell products from a supplier who ships directly to the buyer
10% of sellers use this
Handmade
Create and sell unique handmade products
8% of sellers use Amazon Handmade
Other niche options: Kindle Direct Publishing, Amazon Merch, or digital products.
Step 3: Choose Your Fulfillment Method
Amazon offers two main fulfillment options:
Fulfillment by Amazon (FBA)
You send products to Amazon’s warehouse
Amazon stores, picks, packs, ships, and handles customer service
89% of sellers use FBA; 68% use only FBA
Fulfillment by Merchant (FBM)
You handle storage, packing, shipping, and customer service
Also called Merchant Fulfilled Network (MFN)
32% of sellers use FBM; 11% use only FBM
21% of sellers use a hybrid of FBA and FBM
FBM gives full control over operations and avoids FBA storage fees but requires solid logistics and customer service management.
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Step 4: Create an Amazon Seller Account
To start selling through Amazon FBM, you first need to set up a seller account. If you already have one, you can move on. If not, follow these steps:
Go to Amazon Seller Central: Visit the Seller Central website and click on Sign Up to begin.
Pick an account type: You can choose between an Individual or Professional seller account. The Individual plan works best for people with fewer sales, while the Professional plan is ideal for those expecting higher sales volume.
Enter your details: Amazon will ask for your personal and business information—this includes your name, address, tax details, and banking information.
Verify your identity: You may need to upload documents like a driver’s license or a utility bill to confirm your identity.
Set up payments: Decide how you want to receive the money from your sales. Amazon allows several payout options, such as direct deposit into your bank account.
Submit tax information: Fill out the required tax forms to meet Amazon’s tax requirements.
Select FBM: While completing your account setup, make sure to choose Fulfilled by Merchant (FBM) as your fulfillment option.
Next, adjust your account settings for FBM by going to Seller Central > Settings > Shipping Settings. In this section, you can set your shipping zones, fees, and delivery options. Be sure to turn on Amazon Buy Shipping so you can use Amazon’s discounted shipping rates and receive added protection for delivery-related claims.
Step 5: List Your Products
Once your Amazon seller account is fully set up, the next step is to list your products so you can begin selling. Here’s how to list items on Amazon using FBM:
Log in to Seller Central: Sign in to your Amazon Seller Central dashboard.
Go to Add a Product: From the Inventory tab, select Add a Product.
Find your item: Type the product name, UPC, or ISBN into the search bar to see if it already exists in Amazon’s catalog. If it doesn’t appear, you’ll need to create a brand-new listing.
Create a new listing (if needed): For products not already in the catalog, fill out all required details to set up a new listing.
Set your shipping details: In the Offer section, configure your shipping preferences. Since you’re fulfilling orders yourself with FBM, choose “I want to specify my own shipping rates” and enter the rates you want to charge.
Publish your listing: After completing all the fields, click Save and Finish to make your product live. If you want to safeguard your listings from violations or intellectual property issues, consider reviewing Amazon’s Brand Registry resources.
Optimize your listing: Improve visibility by adding strong keywords, clear and persuasive descriptions, and competitive pricing.
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Step 6: Oversee Your Storage and Inventory
As an FBM seller, you take full responsibility for storing your products and maintaining your stock. Below are some tips for running an efficient storage operation:
Ensure you have enough room: Make sure you have proper space to hold all your goods. This might mean renting a warehouse or using your own storage area.
Create a structured system: Put an organized inventory system in place. Use labels, bins, shelving units, and regularly updated counts to avoid selling items you no longer have.
Monitor product expiration dates (if relevant): For items that expire, follow a first-in, first-out approach so older stock gets shipped first.
Check product quality: Inspect your merchandise periodically. Any damaged or faulty items should be removed before they reach customers.
Reorder before stock runs low: Keep a close eye on inventory levels and restock early. Running out of products can harm your seller performance.
Prepare packing materials: Make sure you always have boxes, tape, padding, and other shipping supplies on hand so orders can be packed safely.
Managing your own storage can become complicated as you scale. Many sellers connect their systems with Amazon MWS (Marketplace Web Service) to automate tasks, track inventory more accurately, and make smarter business decisions.
Step 7: Process and Ship FBM Orders
Once your listings are active and your inventory is in order, the next job is to ship customers’ purchases promptly and reliably:
Pack each order carefully: Use protective packaging and include any needed paperwork. The goal is to ensure the item arrives in perfect condition.
Set up a shipping template: In your Shipping Settings, go to Shipping Templates and create a new template. This helps automate shipping options and fees for different products.
Arrange drop-offs or pickups: Either schedule a carrier pickup or take your packages to a shipping location such as a post office or drop-off center.
Mark the order as shipped: Update the order in Seller Central and upload tracking details so the customer can follow their delivery progress.
Maintain good communication: Keep buyers informed about their order status and respond quickly to any questions or concerns.
Manage returns properly: Follow Amazon’s return rules. When items come back, check their condition and complete the return process quickly.
Amazon also offers Seller Fulfilled Prime, which lets qualifying FBM sellers offer Prime-level delivery benefits — a major advantage for increasing visibility and sales.
Step 8: Deliver Strong Customer Support and Manage Returns
Customer service plays a major role in succeeding with FBM. Satisfied customers often leave better reviews and come back for more. Here’s how to handle customer interactions effectively:
Reply quickly: Keep an eye on your Seller Central messages and answer customer inquiries promptly and professionally.
Resolve problems respectfully: If a shopper has a complaint, work toward a fair solution — whether that means a refund, replacement, or another reasonable fix.
Process returns smoothly: When a return is requested, follow Amazon’s return guidelines. Inspect the returned item and finalize the return as soon as possible.
Monitor feedback: Pay attention to reviews and messages to learn what customers like and what could be improved.
Watch your performance metrics: Amazon tracks seller health through rates such as order defects, late shipments, and cancellations. Aim to keep these numbers strong to protect your account.
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What Are Amazon FBM’s Fees?
Amazon FBM uses a straightforward fee system. As an FBM seller, you’ll pay three main fees: referral fees, a monthly account fee (if you choose the professional plan), and a small charge for each item sold under the individual plan.
Referral Fees
Because you’re selling through Amazon’s marketplace and not your own website, each order is treated as a referral from Amazon. This means Amazon takes a percentage of every sale. The percentage you pay depends on the category your product falls under.
| Fee Category | Referral fee percentages | Applicable minimum referral fee (applied on a per-unit basis unless otherwise noted) |
| Amazon Device Accessories | 45% | $0.30 |
| Amazon Explore | 30% for Experiences | $2.00 |
| Automotive and Powersports | 12% | $0.30 |
| Baby Products | 8% for products with a total sales price of $10.00 or less, and 15% for products with a total sales price greater than $10.00 | $0.30 |
| Backpacks, Handbags, and Luggage | 15% | $0.30 |
| Base Equipment Power Tools | 12% | $0.30 |
| Beauty, Health and Personal Care | 8% for products with a total sales price of $10.00 or less, and 15% for items with a total sales price greater than $10.00 | $0.30 |
| Business, Industrial, and Scientific Supplies | 12% | $0.30 |
| Clothing and Accessories | 17% | $0.30 |
| Compact Appliances | 15% for the portion of the total sales price up to $300.00, and 8% for any portion of the total sales price greater than $300.00 | $0.30 |
| Computers | 8% | $0.30 |
| Consumer Electronics2 | 8% | $0.30 |
| Electronics Accessories1 | 15% for the portion of the total sales price up to $100.00, and 8% for any portion of the total sales price greater than $100.00 | $0.30 |
| Everything Else3 | 15% | $0.30 |
| Eyewear | 15% | $0.30 |
| Fine Art | 20% for the portion of the total sales price up to $100.00, 15% for the portion of the total sales price greater than $100.00 up to $1,000.00, 10% for the portion of the total sales price greater than $1,000.00 up to $5,000.00, and 5% for the portion of the total sales price greater than $5,000.00 | — |
| Footwear | 15% | $0.30 |
| Full-Size Appliances | 8% | $0.30 |
| Furniture | 15% for the portion of the total sales price up to $200.00, and 10% for any portion of the total sales price greater than $200.00 | $0.30 |
| Gift Cards | 20% | — |
| Grocery and Gourmet | 8% for products with a total sales price of $15.00 or less, and 15% for products with a total sales price greater than $15.00 | — |
| Home and Kitchen | 15% | $0.30 |
| Jewelry | 20% for the portion of the total sales price up to $250.00, and 5% for any portion of the total sales price greater than $250.00 | $0.30 |
| Lawn and Garden | 15% | $0.30 |
| Lawn Mowers and Snow Throwers | 15% for products with a total sales price of up to $500.00 8% for products with a total sales price greater than $500.00 | $0.30 |
| Mattresses | 15% | $0.30 |
| Media – Books, DVD, Music, Software, Video | 15% | — |
| Musical Instruments and AV Production | 15% | $0.30 |
| Office Products | 15% | $0.30 |
| Pet Products | 15%, except 22% for veterinary diets | $0.30 |
| Sports and Outdoors | 15% | $0.30 |
| Tires | 10% | $0.30 |
| Tools and Home Improvement | 15% | $0.30 |
| Toys and Games | 15% | $0.30 |
| Video Game Consoles | 8% | — |
| Video Games and Gaming Accessories | 15% | — |
| Watches | 16% for the portion of the total sales price up to $1,500.00, and 3% for any portion of the total sales price greater than $1,500.00 | $0.30 |
Source: Amazon Seller Central
Monthly Subscription Fee
Amazon offers a professional subscription for FBM sellers at $39.99 per month. Sellers using this plan avoid the extra $0.99 fee per item sold and gain access to advanced selling tools.
Per-Item Selling Fee
Sellers on the Individual plan are charged $0.99 for each item sold. This charge does not apply if you subscribe to the Professional plan.
Additional Costs You May Face
Beyond Amazon’s own fees, FBM sellers may also encounter:
Storage fees if using a 3PL or private warehouse
Order fulfillment charges (picking, packing, shipping)
Shipping label and postage costs
Supplies like boxes, tape, bubble wrap, and labels
Labor time spent preparing and shipping orders
Opportunity costs, such as time lost handling shipments instead of growing your business
Even if you handle fulfillment yourself, the time commitment has real value — and often becomes a hidden cost.
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The Pros and Cons of FBM
Pros of Amazon FBM
Lower Amazon Fees
Since you handle storage and shipping yourself (or via a 3PL), you avoid Amazon’s FBA storage and fulfillment fees.More Control Over Operations
You decide how to store, pack, and ship your products. This control extends to packaging — you can use your own branded materials and provide a more personalized customer experience.Direct Customer Interaction
With FBM, you handle customer service and returns yourself, which means you can build stronger relationships, respond directly to issues, and set your own return policies.Greater Flexibility in Inventory Management
You’re not bound by Amazon’s warehousing constraints. You can choose where to store your inventory — your own warehouse, a 3PL, or shared storage — and restock as needed.Potentially Better Margins for Large or Heavy Items
For bulky or heavy products, FBA fees often get very high. With FBM, you can arrange your own shipping deals and reduce costs, which can improve profit margins.
Cons of Amazon FBM
No Automatic Prime Eligibility
FBM listings don’t automatically get the Prime badge, which can reduce your appeal to Prime customers.More Operational Burden
You’re responsible for every step of fulfillment: warehousing, packing, shipping, and handling returns. That requires time, manpower, and possibly infrastructure investment.Slower or Less Reliable Shipping
Without Amazon’s logistics network, delivery times may be slower or less consistent, which can hurt customer satisfaction.Harder to Win the Buy Box
Amazon tends to favor FBA sellers for the Buy Box. This means FBM sellers may face more competition and struggle to capture that prime spot.Higher Overhead Costs
While Amazon’s fees are lower, FBM sellers must manage their own warehousing, shipping, and labor costs. These can add up, especially if sales volume grows.Customer Service Responsibility
You handle all customer inquiries and returns. That takes time, and mistakes in shipping or handling returns can hurt your seller metrics.
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What Can I Sell on Amazon FBM?
When deciding which products to sell through Amazon FBM, it’s important to think about a few factors:
• Low-volume or niche products: FBM works well for items that don’t sell in large quantities or that appeal to a very specific audience. Handling these yourself gives you more flexibility and control.
• Items with slimmer profit margins: Even products that don’t bring in high profits can still be worthwhile with FBM, since you’re not paying Amazon’s fulfillment fees. This can help keep these items profitable.
• Large or bulky goods: Oversized products often cost a lot to store and ship through FBA. With FBM, you can manage these items on your own and often save money in the process.
• Fragile merchandise: Delicate products that need extra care, special packaging, or gentle handling are often better suited for FBM. Because you pack them yourself, you can ensure they’re protected properly.
Choosing products with these characteristics can help you get the most out of Amazon FBM, especially for items that may not be a great match for the FBA system.
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FBM best practices from Amazon itself
Amazon outlines several important guidelines for sellers using FBM. Here are the main points to keep in mind:
Take advantage of Amazon’s “Buy Shipping” tool
The simplest way to make sure your packages go out on time and include valid tracking is to purchase your shipping labels directly through Amazon.
When a customer places an order, you’ll see the option to buy the shipping label from Amazon. To use it, open Orders > Manage Orders, click Buy Shipping next to the order, review the details, confirm, and then print your label.
Using this feature also marks the order as shipped automatically and sends the buyer their tracking details.
Always add tracking information
Amazon requires tracking for every order. If you use the Buy Shipping tool, the tracking number is filled in automatically. If not, you must upload it yourself.
Stay on top of delivery deadlines
Amazon expects customers to receive their purchases on time, so be sure to confirm, package, and ship items promptly. If you offer Premium or Prime shipping options, orders must arrive by the promised delivery date.
Offer a clear, customer-friendly return process
Include simple return instructions and a correct return address with your shipments.
Keep in mind that when you sell via FBM, you are the one responsible for handling returns. Amazon doesn’t allow sellers to decline valid return requests—if a buyer wants to send something back, you must accept it.
Follow Amazon’s rules for dropshipping (if you dropship)
If your business model involves dropshipping, Amazon has strict requirements you must follow:
You must be listed as the official seller of the product.
Your name—not another company’s—must be on all packaging slips, invoices, and related materials.
Any documents showing another supplier must be removed before shipping.
You are responsible for managing and accepting all returns for the items you sell.
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Amazon FBM vs FBA: Which One Is More Profitable?
Amazon FBA and FBM each come with their own advantages and drawbacks, and which one earns you more profit depends on your business model, product type, and workload capacity. To help you see the differences clearly, here’s a simplified comparison of how FBA and FBM stack up:
Category | Amazon FBA | Amazon FBM |
Profitability | Typically lower margins since Amazon handles storage, packing, and shipping | Potentially higher profit because you manage fulfillment yourself |
Ease of Use | Very convenient—Amazon takes care of most of the heavy lifting | Requires more time, effort, and organization |
Level of Control | Limited control over logistics and how orders are handled | Full control over storage, packing, and shipping |
Shipping Costs | Fulfillment and storage fees are charged by Amazon | You handle shipping costs and carrier selection |
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Conclusion: Amazon FBM
Amazon FBM is an excellent option for sellers who want full control over their business operations. Unlike FBA, where Amazon handles storage, fulfillment, and customer service, FBM puts inventory management, shipping, and customer interactions in your hands. This control can be a huge advantage for sellers with:
Unique, custom, or handmade products that require special packaging
Bulky or fragile items that are costly to store or ship through FBA
Low-margin products where FBA fees would cut into profits
In short, FBM is worth it for sellers who are ready to actively manage their operations, want to reduce fulfillment costs, or have products that don’t fit the FBA model. It’s also ideal for those who want to test products or scale their business gradually before committing to FBA.
With the right planning, tools, and attention to customer satisfaction, Amazon FBM can be just as profitable as FBA, and for some products, even more so.
FAQs: Amazon FBM
Is Amazon FBM worth it?
Yes, Amazon FBM can be worth it if:
You want full control over inventory, packaging, and shipping.
Your products are not a good fit for Amazon FBA (e.g., bulky, fragile, or high-margin items).
You are capable of handling customer service and returns efficiently.
You want to avoid storage fees and FBA fulfillment costs.
FBM is ideal for sellers who can efficiently manage logistics and maintain high performance metrics. It also allows flexibility in shipping methods and packaging, which can enhance the customer experience.
How much does Amazon FBM cost?
FBM costs are lower than FBA in terms of storage and fulfillment, but they include:
Shipping costs: You pay for carrier shipping (UPS, USPS, FedEx, DHL) unless customers cover shipping.
Packaging materials: Boxes, tape, bubble wrap, and inserts.
Labor costs: Time spent picking, packing, and shipping orders.
Optional tools: Automation software, inventory management systems, or 3PL fees if outsourcing fulfillment.
Unlike FBA, there are no storage fees or per-order fulfillment fees charged by Amazon. Your main cost depends on your shipping method, product size/weight, and labor.
What are the pros and cons of Amazon FBM?
Pros:
Full control over inventory, shipping, and customer service.
Lower storage costs (no FBA warehouse fees).
Flexibility in packaging and branding.
Ability to sell bulky, fragile, or custom products not suitable for FBA.
Can integrate with hybrid strategies (FBM + FBA).
Cons:
You handle all shipping, returns, and customer service.
Must maintain high seller performance metrics.
Can be more time-consuming for high-volume sellers.
No automatic Prime badge (unless enrolled in Seller Fulfilled Prime, which is limited).
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