FBA vs FBM: How Amazon Fulfillment Works and What It Costs

FBA and FBM are the two ways to get an Amazon order to a customer. With FBA (Fulfillment by Amazon), you ship inventory to Amazon and it stores, packs, ships and handles returns for a fee. With FBM (Fulfilled by Merchant), you do all of that yourself. This guide covers what each costs in 2026, the rules that come with each, and how resellers decide between them.

Fees below are for Amazon's US marketplace as of October 2026. Amazon changes them often, so check its fee pages or revenue calculator before you price anything.

What every seller pays#

Two costs apply whether you use FBA or FBM:

• A selling plan. The Individual plan costs $0.99 per item sold; the Professional plan costs $39.99 a month. Professional pays off once you sell more than about 40 items a month, and it's needed for some features, such as Seller Fulfilled Prime.
• A referral fee on each sale, a percentage of the total price. Most categories, including Toys and Games, charge 15%, with a $0.30 minimum. Some categories charge less or tier the rate by price.

Amazon's 2026 fee update focused on FBA fees; check its referral fee schedule for your category before you price anything.

How FBA works and what it adds#

You send inventory to Amazon's fulfillment centers. When an item sells, Amazon picks, packs and ships it, handles customer service and processes returns. FBA items are also eligible for Prime shipping, which can help them sell.

The extra costs:

• Fulfillment fees, per unit, based on the product's price, weight and size. For 2026, Amazon raised them by an average of $0.08 per unit from January 15. As an example, one 2026 breakdown puts a small standard item of 2 oz or less at $2.43 if priced under $10, $3.32 from $10 to $50, and $3.58 above $50.
• A 3.5% surcharge. From April 17, 2026, Amazon added a temporary "fuel and logistics" surcharge on top of FBA fulfillment fees, with no end date announced.
• Monthly storage, charged per cubic foot. For standard-size items it runs about $0.78 per cubic foot from January to September and about $2.40 from October to December, when space is tight.
• Aged inventory surcharges on stock stored for more than 181 days, rising the longer it sits.
• Inbound placement fees, which depend on how you ship inventory in, and other fees such as a low-inventory fee for items that run low on stock.

The practical effect: FBA works best for items that sell quickly. Slow sellers rack up storage and aged inventory fees, especially in the fourth quarter.

How FBM works and what it costs#

With FBM, you list on Amazon but store and ship orders yourself. You pay the selling plan and referral fees, but no FBA fulfillment or storage fees. Instead you pay for:

• postage, which Amazon says averages more than 31% below retail ground rates if you buy labels through its Buy Shipping;
• packaging and supplies;
• your time, or someone else's, to pack and ship every order on schedule.

You also carry the performance risk. Amazon tracks how reliably you ship, and sellers report targets of an order defect rate below 1%, a late shipment rate below 4%, a pre-fulfillment cancel rate below 2.5% and a valid tracking rate above 95%. Falling short can limit or suspend your account.

Seller Fulfilled Prime#

Seller Fulfilled Prime lets FBM sellers show the Prime badge on orders they ship themselves. It needs a Professional account, a US ship-from address and a passed trial period, and Amazon keeps reviewing your performance afterward.

FBA vs FBM at a glance#

How to choose#

Most resellers end up using both. A few questions decide each item:

1. How fast will it sell? Fast sellers suit FBA; slow ones pile up storage fees.
2. How big and heavy is it? Large items cost more to ship to Amazon and to store.
3. What's your time worth? FBM saves fees but turns you into a shipping department.
4. What's the margin after every fee? Work out the referral fee, fulfillment or shipping cost, storage and any surcharge for that exact item before you buy it.

Seller tools can do this math for you. Our guide to Amazon seller tools covers the profit calculators and analytics tools, and our guide to online and retail arbitrage explains the rules on what you can resell.

Taxes and records#

Amazon sales are income. Keep records of what you paid for inventory and every fee, because business costs generally reduce your taxable profit. Ask a tax professional about your situation. Our guide to reseller taxes and Form 1099-K explains what to report.

Our guide to Amazon FBA fees breaks down each fee in more detail, and our guide to Amazon ungating explains category and brand approval.

Amazon tools on OOSClub#

The Amazon FBA & FBM niche lists sourcing, research, repricing and analytics tools, with what each does, its prices and refund terms, and when we last checked them.