When does Fulfilled by Merchant (FBM) make sense for Amazon sellers?

TL;DR

• Fulfilled by Merchant (FBM) lets sellers control storage, packing, and shipping, offering flexibility and potentially higher margins than FBA for certain products.

• FBM is ideal for heavy or oversized items where FBA fees can eat into profits.

• Custom, handmade, or perishable products benefit from FBM’s tailored handling and quality control.

• Sellers needing better inventory control or those with lower sales volumes often find FBM more cost-effective.

• FBM is a smart choice in regions where FBA is expensive or limited, like Alaska, Hawaii, or U.S. territories.

• Choosing between FBA and FBM depends on your business model; consulting with Amazon experts can help tailor the right fulfillment strategy.

Is Fulfillment by Amazon (FBA) eating into your profits more than you expected?

While FBA is a popular choice for its convenience and Prime eligibility, it’s not always the most cost-effective option especially for certain types of products or sellers. That’s where Fulfilled by Merchant (FBM) can offer a smarter alternative.

FBM allows Amazon sellers to manage their own storage, packing, and shipping giving them more control over costs, inventory, and customer experience. For some sellers, especially those working with bulky products, custom items, or lower-volume SKUs, FBM can lead to better margins and more flexibility.

But FBM isn’t for everyone. It requires operational readiness and a solid logistics plan to meet Amazon’s standards. So, when does it make sense to switch or even star with FBM?

In this guide, we’ll explore key scenarios where Fulfilled by Merchant is not just a backup plan but a strategic choice. Understanding when to use FBM within your Amazon fulfillment options can help you protect profits, reduce fees, and stay competitive on Amazon.com.

Is FBM more profitable than FBA?

FBA vs FBM isn’t about which is “better” it’s about what fits your business model. If you're selling lightweight, fast-moving products, FBA may be worth the fees for the convenience and Prime boost.

But if you're dealing with bulky items, custom orders, or low-volume SKUs, FBM can help you maintain better margins and control. Choosing the right method can make a big difference in long-term profitability.

When does Fulfilled by Merchant (FBM) make sense for Amazon sellers?

1. When selling heavy or oversized products with high FBA fees

For Amazon U.S. sellers, Fulfilled by Merchant (FBM) can be a smarter choice when dealing with heavy or oversized products. FBA fees are calculated based on both size and weight, and for large items think furniture, gym equipment, or large electronics these fees can quickly eat into your margins. In some cases, sellers are surprised to find that fulfillment costs through FBA are higher than the profit they make on the product.

With FBM, you maintain control over your own shipping and fulfillment, allowing you to explore cost-effective alternatives. You can negotiate rates with third-party carriers, offer local delivery, or even set up flat-rate shipping through your own systems. 

These options not only reduce fulfillment expenses but can also give you more flexibility in handling returns and managing customer service. Additionally, FBM lets you avoid costly storage fees especially if your large items move slowly or require special handling that Amazon’s warehouses aren't optimized for.

While you do give up Prime eligibility (unless enrolled in Seller Fulfilled Prime), the ability to protect your margins and control logistics often outweighs that tradeoff. If your product catalog includes oversized goods with tight margins, FBM isn’t just a fallback it’s a smart, strategic decision for long-term profitability on Amazon.com.

2. When offering custom, handmade, or perishable items

For many Amazon U.S. sellers, Fulfilled by Merchant (FBM) makes perfect sense when dealing with custom, handmade, or perishable products. These items often don’t fit neatly into Amazon’s Fulfillment by Amazon (FBA) system due to their unique handling, prep, or storage requirements.

Custom or personalized products like engraved gifts, made-to-order clothing, or handcrafted decor typically require processing time and customization before shipment. FBA isn’t designed for this level of individual attention. 

By using FBM, you maintain full control over order handling, ensuring each product meets customer expectations before it ships. The same goes for handmade items. Many sellers in categories like jewelry, art, or home goods want to ensure quality, presentation, and branding stay consistent.

With FBM, you can package each item personally, include thank-you notes, or use branded packaging something that’s not possible with FBA. Perishable goods, such as gourmet snacks, baked items, or health supplements with short shelf lives, also benefit from FBM. 

Amazon’s strict storage and temperature rules may not align with your needs, and the risk of spoilage or delays increases. 

In short, using ship from merchant on Amazon gives you the flexibility and quality control these unique product types require, while still allowing you to reach Amazon’s massive customer base.

3. When maintaining better control over inventory or shipping

For many Amazon U.S. sellers, Fulfilled by Merchant (FBM) becomes a smart choice when maintaining better control over inventory and shipping is a top priority.

Unlike Amazon FBA strategy, where your inventory is stored in Amazon’s fulfillment centers and managed by their systems, FBM allows you to handle everything directly from how much stock you hold to how it’s packed and shipped. This level of control is especially useful for sellers with complex supply chains, seasonal products, or multiple sales channels beyond Amazon.

With FBM, you can avoid unexpected stock removals, long-term storage fees, and inventory limits that often come with FBA. It also gives you the flexibility to adjust shipping methods, offer customized packaging, or use eco-friendly materials—all things that can help differentiate your brand and reduce costs.

FBM is particularly valuable when delivery timing, inventory accuracy, or branding matters as much as the sale itself. It allows you to maintain high customer service standards without being tied to Amazon’s fulfillment policies.

For U.S. sellers who value agility and direct control, FBM can be more than a backup it can be a strategic advantage in building a resilient and customer-focused business on Amazon.

4. When selling products with lower sales volume

For Amazon US sellers, Fulfilled by Merchant (FBM) can be a smart choice when you're dealing with products that have lower sales volume. While Fulfillment by Amazon (FBA) is great for fast-moving inventory, its fees especially for storage and fulfillment can quickly eat into your margins if products sit unsold for extended periods.

FBM gives you full control over your inventory, meaning you only ship items as orders come in. This flexibility helps you avoid long-term storage fees and reduces the risk of overcommitting to FBA’s warehousing system. It's particularly useful if you're selling niche or seasonal items, products with unpredictable demand, or higher-priced goods that sell less frequently.

Let’s say you sell handmade wooden decor or specialized electronic parts items that appeal to a narrow customer base and sell a few units per week. With FBM, you manage inventory on your terms, saving money and maintaining control without compromising product quality or customer service.

By choosing FBM for slower-selling products, you can preserve profit margins, minimize unnecessary fees, and keep your operations lean. It’s a practical option that helps smaller sellers or those testing new products maintain a sustainable, low-risk selling strategy on Amazon.com.

5. When operating in regions or channels where FBA isn’t cost-effective

For many Amazon U.S. sellers, Fulfillment by Amazon (FBA) offers convenience and reach but it’s not always the most cost-effective option in every region or sales channel. That’s where Fulfilled by Merchant (FBM) becomes a strategic alternative, especially when selling in areas where FBA fees are too high or fulfillment services are limited.

If you operate in  Alaska, Hawaii, or U.S. territories, FBA shipping rates and service times can be unpredictable or expensive. With FBM, you can partner with local carriers or regional 3PLs to manage deliveries more efficiently and at lower costs. This gives you more control over your operations and helps maintain healthy margins.

FBM also makes sense when selling across multiple channels like your own website, Walmart, or Etsy where centralized inventory management and shipping can streamline logistics. Instead of splitting stock across FBA and other platforms, you can fulfill all orders from a single warehouse.

In short, FBM is a smart solution when FBA’s structure doesn’t align with your business needs. For sellers who want greater control, flexibility, and regional efficiency, FBM offers a practical path to scale while keeping fulfillment costs under control.

Final thoughts

Choosing between FBA and FBM isn’t about which is better it’s about what fits your business goals, product type, operations, and overall Amazon seller logistics. For Amazon U.S. sellers, Fulfilled by Merchant can be a strategic choice when you need more control, lower fees, or flexibility across sales channels.

Whether you're dealing with bulky goods, handmade items, or slower-moving inventory, FBM gives you the ability to protect your margins and manage your brand experience directly. If you're unsure which fulfillment model is right for your growth stage, working with experienced Amazon brand consultants can help.

They can assess your products, costs, and logistics to build a fulfillment strategy that supports both profitability and customer satisfaction. Smart fulfillment is the foundation of sustainable success on Amazon.com.

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