Every new Amazon seller faces the same choice. Send your stock to Amazon and let them pick, pack and ship every order (Fulfilled by Amazon, or FBA). Or keep the stock yourself and ship orders from home or a warehouse (Fulfilled by Merchant, or FBM).
A lot of people choose FBM because FBA fees look scary. But you're not comparing FBA fees with zero. You're comparing them with the cost of doing the job yourself. Once you put both on paper, the answer is often surprising.
The short version
- Both FBA and FBM pay the same referral fee, usually 15%.
- FBA adds a fulfillment fee (from $3.32 plus a 3.5% surcharge in 2026), storage and inbound costs.
- FBM adds your shipping labels, packaging, and your time.
- Small, light items that sell steadily often cost less with FBA. Heavy, bulky or slow items often cost less with FBM.
The fees both methods share
Whichever way you fulfil, Amazon charges a referral fee on each sale. In most categories it's 15% of the price, with a minimum of $0.30. Some categories are lower, such as 8% for consumer electronics. If you're on the Professional selling plan, you also pay $39.99 a month either way. So these costs don't help you choose. What matters is everything else.
What FBA costs
- Fulfillment fee. Charged per unit, based on size and weight. In 2026 it starts at $3.32 for a small standard item up to 2 oz (for items priced $10 to $50), and a 3.5% fuel and logistics surcharge is added on top.
- Monthly storage. Charged on the space your stock takes up in Amazon's warehouses. It's higher from October to December.
- Aged inventory surcharges. Extra fees on stock that sits for a long time.
- Inbound costs. Shipping your stock to Amazon, plus placement fees in some cases.
- Low-inventory-level fees. Charged on some items when you keep too little stock compared with sales.
In return, Amazon handles picking, packing, shipping, customer service for delivery issues and most returns, and your listings usually get the Prime badge.
What FBM costs
- Shipping labels. Whatever you pay the carrier for each order.
- Packaging. Boxes, mailers, tape, labels.
- Your time. Picking, packing, printing labels and dropping parcels off. Easy to forget, but very real once you have a few orders a day.
- Space. Somewhere to keep stock, even if it's a spare room.
- Returns and customer messages, which you handle yourself.
FBM listings don't get the Prime badge unless you qualify for Amazon's Seller Fulfilled Prime program, which has its own strict delivery standards.
A side-by-side example
Let's take a kitchen gadget that sells for $24.99, costs $5.50 to make, weighs 12 oz packed and fits in the large standard size tier. For the FBM side, we'll assume the seller pays $5.50 for a shipping label and $0.40 for packaging. Your own label costs will depend on your carrier, so treat these as an illustration.
| Per unit | FBA | FBM |
|---|---|---|
| Selling price | $24.99 | $24.99 |
| Referral fee (15%) | −$3.75 | −$3.75 |
| FBA fee (12 oz, large standard, with surcharge) | −$4.35 | — |
| Inbound shipping and prep | −$0.85 | — |
| Shipping label | — | −$5.50 |
| Packaging | — | −$0.40 |
| Product cost | −$5.50 | −$5.50 |
| Profit per unit | $10.54 | $9.84 |
FBA comes out $0.70 ahead per unit here, and that's before counting the time the FBM seller spends packing. It also usually sells faster with the Prime badge. What the FBA column doesn't include yet is storage, which depends on how long the stock sits. For a light item that sells steadily, storage per unit is usually small.
You can run your own product through the Amazon FBA fee calculator. Enter the price, category, size tier and weight, and it estimates the referral fee, FBA fee, profit and ROI.
Returns, buyer messages and your time
The table only shows money. Time matters too. With FBA, Amazon deals with most delivery questions and handles returns at its warehouses. With FBM, every "where is my order?" message and every return comes to you. On a handful of orders a week that's fine. On fifty a day it can turn into a part-time job.
A fair way to compare is to give your time a value. If packing and messages take you three minutes per order and your time is worth $20 an hour, that's another $1 per FBM order. In the example above, that would put FBA $1.70 ahead per unit instead of $0.70.
When FBA usually wins
- Small, light products. Amazon's fulfillment fee is often lower than the label a small seller can buy.
- Items that sell steadily. Stock doesn't sit long, so storage costs stay low.
- Competitive categories. The Prime badge can make a real difference to sales.
- Sellers with limited time. FBA frees you up to work on products and marketing instead of packing.
When FBM usually wins
- Heavy or bulky items. FBA fees climb with size and weight, and storage costs more.
- Slow sellers. Stock that sits for months picks up storage and aged inventory fees.
- Handmade or made-to-order items. You can't send stock you haven't made yet.
- Testing a new product. FBM lets you try a small batch before committing stock to Amazon.
- Cheap shipping deals. If you already get very low label rates, FBM gets more attractive.
You don't have to pick just one
Many sellers use both. Fast-moving, light products go to FBA, while bulky, slow or custom items stay FBM. Some also keep a small FBM backup for their FBA products, so a listing doesn't go out of stock while new inventory is on its way to Amazon.
How to decide for your products
- Work out FBA profit per unit with the calculator, including inbound and prep.
- Get real label quotes for your product's size and weight, and work out FBM profit per unit.
- Estimate how long a unit sits in storage before it sells. If it's months, add storage costs to the FBA side.
- Put a value on your time per FBM order.
- Compare. If they're close, FBA's Prime badge usually tips it.
Bottom line
FBA isn't automatically expensive and FBM isn't automatically cheap. For small, light products that sell well, FBA often makes more per unit and saves you hours. For heavy, bulky or slow products, doing it yourself usually wins. Run the numbers on your own items in the Amazon FBA calculator before you decide.
Frequently asked questions
Do FBM sellers pay Amazon referral fees?
Yes. The referral fee is charged on every sale whether Amazon or you ship the order. For most categories it's 15% of the price, with a $0.30 minimum. FBM sellers skip the FBA fulfillment and storage fees, but pay for their own shipping, packaging and time.
Is FBA cheaper than FBM?
For small, light items that sell steadily, FBA is often cheaper or close to it, because Amazon's fulfillment fee can be lower than what a small seller pays for a shipping label. For heavy, bulky or slow-selling items, FBM is often cheaper because you avoid storage fees and higher fulfillment fees.