Originally posted June 10, 2022, updated June 15, 2026.
Amazon has proven to be one of the most complicated and competitive markets in the world, but one that’s worth it for ecommerce and omnichannel retail brands.
In 2025, independent sellers in the US averaged more than $375,000 in annual sales through the Amazon Store, and more than 75,000 independent sellers surpassed $1 million in sales. While this provides a strong revenue channel for many retailers, selling through Amazon Marketplace means figuring out not only how to compete with other retailers but also how to handle ecommerce fulfillment processes and the complexities of omnichannel fulfillment.
Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) are two ways for sellers to manage their Amazon orders. While there is no one-size-fits-all way to fulfill, brands benefit from a strong understanding of the available methods so they can determine which model(s) work best for their operations, products, and customers. That decision matters even more in 2026 as Amazon continues to update seller-fulfilled handling time, returns, delivery performance, and Seller Fulfilled Prime requirements.
It’s essential for brands to explore and understand the Amazon FBM model and how it fits within broader ecommerce and omnichannel fulfillment strategies.
What is Amazon FBM?
Fulfilled By Merchant, or FBM, is when a seller lists a product on Amazon but ships it to customers themselves. This is often done through existing ecommerce fulfillment operations, such as a dedicated facility or a 3PL partner. In the Amazon FBM model, sellers must take care of their own orders and can’t depend on Amazon (FBA) to do so.
While FBM is often used by brands selling low-margin items, it’s underutilized because FBA simplifies shipping, handling, and other operational tasks. That said, FBM can offer greater control over inventory, lower fulfillment fees, and more flexibility in branding and customer experience, making it a strategic option for the right sellers.
Some brands use FBM alongside FBA. In a hybrid model, a 3PL can support Amazon FBM orders while also offering FBA prep services to help products meet Amazon’s labeling, packaging, bundling, and shipment requirements before inventory is sent to Amazon.
How does Amazon FBM work?
After setting up a seller account on Amazon and creating product listings, sellers have two options for getting their products to customers: they can use Amazon’s fulfillment network to ship orders on their behalf (FBA), or they can do it themselves (Amazon FBM).
Before making an impulsive decision to go with FBA for its ease, it’s important to recognize that Fulfillment by Amazon has its complexities as well. FBA has strict inventory requirements, high storage and long-term fees, limited control over the customer experience, and complicated forecasting.
With Amazon FBM, brands oversee order fulfillment using their existing warehouse operations (or wherever their products are stored) to ship orders to the delivery address provided by Amazon customers. The MFN (Merchant Fulfilled Network) seller is also responsible for customer service and returns management.
Sellers opting for FBM must carefully consider their shipping strategy. That means securing delivery partners who are reliable and cost-effective. If FBM shipping costs exceed FBA fees, self-fulfillment can quickly erode profit margins and defeat the purpose.
What changed for Amazon FBM in 2026?
Amazon made several seller-fulfilled updates that brands should factor into their FBM strategy:
- Refund processing has changed. As of January 26, 2026, the FBM refund processing window moved from two business days to four calendar days before Automated Refund triggers. This gives sellers more time to inspect returns, but also requires tighter return workflows.
- SAFE-T claim timing changed. Amazon also shortened the SAFE-T claim filing window from 60 days to 30 days, which means return inspections, refund decisions, evidence collection, and claim filing must occur faster.
- On-time delivery enforcement changed. Effective February 28, 2026, Amazon updated its application of the existing 90% on-time delivery rate requirement for seller-fulfilled listings. Instead of deactivating all seller-fulfilled listings when OTDR falls below 90%, Amazon may deactivate the listings that have the greatest impact on the ratings drop, although accounts with significant or repeated misses can still face broader action.
- Handling-time rules are tightening. Starting June 29, 2026, seller-fulfilled SKUs need accurate handling times that reflect actual fulfillment speed. This makes operational consistency, weekend planning, carrier pickup timing, and warehouse cutoffs more visible inside Amazon’s delivery promise.
- Seller Fulfilled Prime is getting harder to maintain. Starting July 6, 2026, Amazon is raising minimum delivery speed thresholds for Seller Fulfilled Prime across standard-size, oversize, and extra-large products. For standard-size items, sellers will need to show one-day delivery on 40% of Prime customer page views and two-day delivery on 75%.
When to choose FBM to ship your product
Amazon FBM works best for certain types of products and in the right fulfillment mix. FBM (Fulfilled by Merchant) is often a smarter option for items that are unique, lower in volume, or have tighter margins. It’s especially effective when paired with a hybrid fulfillment strategy, where FBA handles high-volume, fast-moving SKUs and FBM supports slower-moving or specialty items.
Use FBM when:
- Products are exclusive or sell infrequently. These items may not justify FBA storage fees and don’t benefit from rapid fulfillment.
- Order volumes are low. With fewer units, shipping costs can be managed more efficiently through the seller’s own network or 3PL.
- Profit margins are slim. FBM can reduce warehousing and fulfillment costs, helping sellers avoid the high fees tied to FBA.
- Items are oversized or heavy. FBA’s pricing model heavily penalizes large or bulky products; FBM may be more cost-effective with the right shipping partner.
- Custom packaging or branded experiences are essential. FBM allows for more control over the unboxing experience and customer engagement.
- Products require tighter return inspection. With Amazon’s 2026 refund and SAFE-T updates, FBM can work well when sellers or their 3PL can quickly inspect returns, document product condition, apply restocking fees when appropriate, and keep claim timing under control.
- Delivery promises can be met consistently. FBM should not solely be used to avoid FBA fees. In 2026, it requires strong shipping data, accurate handling times, and reliable carrier performance to protect account health.
When does Amazon FBM beat Amazon FBA?
Because FBA fees are largely based on size, weight, and storage time, sellers can often improve margins by fulfilling directly, especially if they’ve secured competitive shipping rates or want to maintain flexibility in how products are delivered.
Currently, the FBA cost comparison is even more important. Amazon announced an average FBA fee increase of $0.08 per unit and later added a 3.5% fuel and logistics-related surcharge to FBA fulfillment fees in the US. Those costs do not automatically make FBM the better choice, but they do make it more important to compare fulfillment methods by SKU, margin, shipping zone, return profile, and storage needs.
Using FBM in a hybrid model
A hybrid approach gives sellers the best of both worlds: the speed and Prime visibility of FBA for top sellers, and the flexibility and cost control of FBM for niche or margin-sensitive products. It also adds resilience to your operations: if FBA inventory limits tighten or delays occur, FBM can step in to keep orders moving.
The hybrid model is especially useful in 2026 because Amazon’s seller-fulfilled rules are becoming more performance-driven. FBA may still make sense for fast-moving products that need Prime visibility, while FBM can support heavy, oversized, seasonal, specialty, or branded products that need more fulfillment control.
The benefits of using Amazon FBM
FBM gives sellers more freedom, flexibility, and control. Brands can manage inventory on their own terms, avoid rising FBA fees, and create a more unified operation across channels by handling their own marketplace fulfillment. It’s an ideal path for sellers who want to grow their Amazon business while maintaining ownership of their brand, profits, and customer experience. The benefits include:
| Amazon FBM Benefit | Why it matters |
| More business control | Sellers manage their own inventory, fulfillment, and operations without relying on Amazon’s systems or schedules. |
| Unified inventory for multi-channel sales | Use the same stock to fulfill online orders and supply physical retail locations; no need for duplicate inventory or extra transfers. |
| Higher profit potential | Avoid FBA fees, choose more affordable warehouses, and reduce shipping costs. Which is especially useful for heavy or low-margin products. |
| Stronger brand connection | Sellers communicate directly with customers, gaining feedback, building loyalty, and offering a branded experience. |
| Less exposure to Amazon policy shifts | Avoid disruptions from changes in FBA pricing, storage limits, or other policy updates. |
| Simplified tax and paperwork | Fewer tax complexities and less administrative burden, particularly in states without sales tax. |
| More return inspection control | FBM sellers can inspect returned products directly, document condition, and manage refund decisions within Amazon’s updated 2026 timelines. |
| More control over delivery promises | With accurate handling times, strong carrier data, and the right warehouse footprint, FBM sellers can manage shipping commitments more intentionally. |
Amazon FBM fees broken down
Amazon FBM fees are costs sellers pay to sell on Amazon. These fees are not simple and vary from one seller to the next, depending on the shipping and delivery options they offer. But, to start, they will have to pay some fixed costs.
- Professional Selling Plan: $39.99/month
- Individual Selling Plan: No monthly subscription fee
- Per-item fee (Professional Plan): No per-item fee
- Per-item fee (Individual Plan): $0.99 per item sold
Additional Amazon FBM fees explained
While FBM sellers avoid Amazon’s fulfillment and storage fees, they’re still responsible for several platform and operational costs. The most consistent charge is the referral fee, which Amazon takes as a percentage of each sale, typically between 8% and 15%, depending on the product category. Some categories, such as books or DVDs, also include a $1.80 closing fee per unit sold. If a customer returns an item, Amazon may also charge a refund administration fee, retaining 20% of the original referral fee (up to a $5 maximum).
Outside of Amazon’s platform fees, FBM sellers manage their own fulfillment costs. That includes shipping fees, which vary based on carrier, destination, and product size. Sellers also need to account for packaging materials such as boxes, tape, inserts, and labels. If they use a third-party warehouse or 3PL, there may be storage fees based on volume or square footage, as well as handling charges for pick, pack, and ship services. For those fulfilling orders in-house, labor becomes a significant cost factor.
Other FBM responsibilities include returns management and covering the costs of restocking, inspecting, or disposing of returned items, and providing customer service. Unlike FBA sellers, who have Amazon handle post-purchase support, FBM sellers must respond to customer inquiries, complaints, and order issues directly.
FBM sellers should also account for the operational cost of tighter return timing. The four-calendar-day refund window provides more time to inspect returned products than the previous two-business-day window, but the shorter 30-day SAFE-T claim window requires stronger documentation and faster claims management.
Sellers participating in Seller Fulfilled Prime (SFP) face even tighter standards, updated delivery speed thresholds, and performance requirements. To qualify and succeed, sellers often invest in shipping automation tools, build relationships with national and regional carriers, and maintain rigorous operational performance.
Beginning July 6, 2026, Seller Fulfilled Prime becomes more demanding for many sellers. Standard-size items will need to show one-day delivery on 40% of Prime customer page views and two-day delivery on 75%. Oversized and extra-large products will also face higher delivery-speed expectations, making warehouse location, carrier mix, cutoff times, and weekend fulfillment capabilities central to SFP success.
FBA vs. FBM: Quick comparison
| Category | FBA (Fulfilled by Amazon) | FBM (Fulfilled by Merchant) |
| Fulfillment and storage fees | Charged by Amazon based on product size, weight, and storage time | Seller pays own fulfillment, labor, and warehousing costs |
| Shipping costs | Included in FBA fees for Prime-eligible orders | Paid directly by the seller or 3PL |
| Referral fees | 8%–15% depending on product category | 8%–15% depending on product category |
| Per-item/closing fees | Additional fees for certain categories (e.g., $1.80 for media items) | Same as FBA for applicable categories |
| FBA fee updates | Amazon increased FBA fulfillment fees in 2026 and added a 3.5% fuel and logistics-related surcharge to FBA fulfillment fees in the US | FBM sellers avoid FBA fulfillment fees but still carry their own shipping, labor, packaging, and warehouse costs |
| Refund administration fee | Amazon may retain part of the referral fee when a refund is issued | Same platform fee structure, with the seller responsible for inspection, refund timing, documentation, and customer communication |
| Prime eligibility | Automatic for FBA listings | Requires enrollment in Seller Fulfilled Prime and performance compliance |
| Customer service | Handled by Amazon | Handled by seller |
| Returns management | Managed by Amazon | Seller handles inspections, restocking, and customer communication |
| Handling time management | Handled inside Amazon’s fulfillment network | Seller must maintain accurate handling times for seller-fulfilled SKUs |
| Brand control | Limited (Amazon packaging and communication) | Full control over packaging, messaging, and customer experience |
| Sales tax complexity | More paperwork due to Amazon’s fulfillment in multiple states | Simpler if seller fulfills from fewer or a single location |
| Flexibility and control | Less operational flexibility | Greater control over fulfillment, customer service, and inventory allocation |
When and how to use Amazon FBM
Anyone can choose to go the Amazon FBM route, but it’s often situational and depends on numerous factors, including product type and volume, 3PL vs FBA costs, the importance of having Prime eligibility, and more.
However, FBM adds flexibility to a hybrid fulfillment strategy by allowing sellers to manage select SKUs outside of Amazon’s system, which is ideal for low-volume, oversized, or branded items. While FBA handles fast-moving, high-demand products eligible for Prime, FBM fills the gaps by offering greater control and cost efficiency. This approach gives sellers operational resilience and the ability to adapt to shifting demand, policy changes, or peak season pressure.
Sellers should also evaluate whether their operations can support Amazon’s newer seller-fulfilled expectations. That means accurate SKU-level handling times, reliable carrier performance, clear return inspection workflows, fast refund processing, and visibility into whether each SKU can meet the delivery promise customers see on Amazon.
When paired with a 3PL, FBM becomes even more powerful. A fulfillment partner like Kase can handle storage, picking, packing, and shipping for FBM orders without the overhead of building your own logistics operation. You get the benefits of Prime-like service with greater visibility, brand control, and the ability to scale across channels.
For brands using FBM as part of a broader marketplace strategy, the right 3PL can also help manage seller-fulfilled order volume, carrier selection, returns processing, documentation, and performance consistency as Amazon’s requirements continue to tighten.
Want to see how FBM and 3PL can work together to grow your business? Connect with the team at Kase to explore flexible fulfillment solutions built for modern brands.
