FBA vs FBM: when each fulfillment model wins
FBA buys you Prime eligibility (huge for conversion) but charges fulfillment fees that compress CM1. FBM (Fulfilled by Merchant) is cheaper per unit but kills the Prime badge and conversion rate. For most products under $50, FBA wins on net margin even after fees.
| FBA | FBM | |
|---|---|---|
| Prime eligibility | Yes - badge boosts conversion 30-50% | No (or limited via Seller Fulfilled Prime) |
| Per-unit cost | $3-9 + storage + long-term fees | Your actual logistics cost |
| Best for | Most products under $50 selling 50+ units/month | Large, slow-moving, or oversized products |
| Inventory risk | Long-term storage fees if it does not sell | Your warehouse, your problem |
| Customer service | Amazon handles returns + complaints | You handle everything |
| Conversion rate impact | +30-50% just from Prime badge | Baseline (no Prime lift) |
Use FBA when
Most products. Especially anything with regular reorder velocity, under-$50 price point, or where Prime conversion lift matters.
Use FBM when
Large/heavy items where FBA fees crush CM1. Brands with low Amazon velocity that cannot justify FBA storage costs. Custom or made-to-order products.
Default to FBA for any fast-moving product under $50. Use FBM for oversized, low-velocity, or high-AOV products where the Prime lift does not outweigh per-unit fulfillment costs. Many accounts run hybrid: FBA for the velocity SKUs, FBM for the fat tail.