When you start selling on Amazon one of the most fundamental decisions you will make is whether to use FBA — Fulfilment by Amazon — or FBM — Fulfilment by Merchant. This single choice affects your fees your Buy Box eligibility your workload your cash flow and ultimately your profitability. Getting it wrong from the start costs you time and money that could have been avoided with a clear understanding of both models.

We are Brandhunterz Ltd — a UK registered wholesale sourcing company (Company No: 15342697) — and in this complete comparison guide we explain exactly how FBA and FBM work, the real cost difference between them, which model wins the Buy Box and the specific situations where each model is the right choice for your wholesale business.

What is FBA — Fulfilment by Amazon?

With FBA you send your stock to Amazon’s fulfilment centres and Amazon takes care of everything from that point — storing your products picking and packing each order shipping to the customer handling customer service and processing all returns. You pay Amazon a fulfilment fee per unit sold and a monthly storage fee for the space your stock occupies in their warehouse.

FBA Process Stage	Who Handles It
Source and purchase stock	You
Label and ship to Amazon warehouse	You
Store pick pack and ship every order	Amazon ✅
Handle all customer service and queries	Amazon ✅
Process all returns	Amazon ✅
Prime badge on all eligible listings	Amazon provides automatically ✅

What is FBM — Fulfilment by Merchant?

With FBM you store your own stock — typically at home or in a warehouse — and fulfil every customer order yourself. When an order comes in you pick pack and ship the item directly to the customer using your chosen courier. You are responsible for all customer service and returns. There are no Amazon storage fees and no FBA fulfilment fees — but you lose the Prime badge and have a significantly weaker Buy Box position.

FBM Process Stage	Who Handles It
Source and purchase stock	You
Store stock at home or warehouse	You ❌
Pick pack and ship every order	You ❌
Handle all customer service and queries	You ❌
Process all returns	You ❌
Prime badge on listings	Not available unless Seller Fulfilled Prime ❌

FBA vs FBM — The Complete Side-by-Side Comparison

Factor	FBA	FBM	Winner
Buy Box advantage	Very Strong	Weak	FBA ✅
Prime badge	Automatic	Not available	FBA ✅
Fulfilment workload	Zero — Amazon handles all	High — you ship every order	FBA ✅
Fulfilment fee per unit	£2.10 to £5.00+ FBA fee	Your postage cost only	Depends on product
Storage cost	Monthly FBA storage fee	Your own space — free or low cost	FBM ✅
Customer service	Amazon handles all	You handle all	FBA ✅
Returns processing	Amazon handles all	You handle all	FBA ✅
Scalability	Unlimited — Amazon scales with you	Limited by your capacity	FBA ✅
Account health metrics	Easy to maintain — Amazon ships on time	At risk if you miss dispatch deadlines	FBA ✅

The Buy Box — Why FBA Wins Every Time

The Buy Box is the Add to Cart button on every Amazon product listing. Whichever seller holds the Buy Box receives the vast majority of sales — typically 80 to 90 percent of all orders on that listing. Understanding how the Buy Box works is the most important reason why FBA is the right model for wholesale sellers.

Amazon’s Buy Box algorithm rewards FBA sellers heavily. When an FBA seller and an FBM seller offer the same product at the same price the FBA seller wins the Buy Box because Amazon has confidence in the fulfilment quality speed and customer experience that FBA delivers. An FBM seller typically needs to undercut an FBA seller by 5 to 15 percent to compete for Buy Box share — which dramatically erodes margins.

Fee Comparison — What Does Each Model Actually Cost?

The fee difference between FBA and FBM is more nuanced than most sellers realise. FBA charges an additional fulfilment fee per unit — but eliminates your postage cost entirely. Use AMZScout or Helium 10 to calculate the exact fee comparison for any product before deciding which model to use:

Cost Element	FBA	FBM
Referral Fee (8% on £14.99)	£1.20	£1.20
FBA Fulfilment Fee	£2.10	£0.00
Your Postage Cost	£0.00 — Amazon ships	£2.90 — you ship
Packaging Materials	£0.00 — Amazon packs	£0.20
Storage Fee (per unit per month)	£0.10 to £0.20	£0.00
Total Variable Cost Per Unit	~£3.40 to £3.50	~£4.30

When FBA is the Right Choice

FBA is almost always the right starting point for wholesale sellers. These are the specific situations where FBA delivers the clearest advantage:

Use FBA When	Reason
You are starting out on Amazon	FBA gives you immediate Buy Box competitiveness and Prime badge
Your products are standard size and weight	FBA fees are competitive for small standard products
Your products sell at least 10 units per month	Stock turns fast enough to avoid long-term storage fees
You want to scale without hiring staff	Amazon handles all fulfilment regardless of order volume
You want to protect your account health metrics	Amazon’s late shipment rate is effectively zero for FBA sellers

When FBM Makes Sense

FBM is not always the wrong choice — there are specific situations where it genuinely outperforms FBA for wholesale sellers:

Use FBM When	Reason
Large or heavy products with high FBA fees	FBA fee may exceed your own postage cost — FBM more profitable
Slow-moving products under 5 units per month	FBA storage fees accumulate faster than stock turns
As a backup when FBA stock runs out	Keep FBM listing live to capture sales while restock ships to Amazon
Perishable or temperature-sensitive products	FBA warehouse conditions may not suit the product
Testing a new product before committing to FBA	Test demand with zero storage risk before sending FBA stock

The Dual Listing Strategy — FBA and FBM Together

The most advanced and commercially efficient approach for established wholesale sellers is running both FBA and FBM listings simultaneously on the same product. This dual listing strategy delivers three important benefits:

FBA vs FBM — The Decision Framework

Conclusion — FBA for Wholesale Sellers Almost Every Time

For Amazon FBA wholesale sellers the answer to FBA vs FBM is clear in the vast majority of cases — start with FBA. The Buy Box advantage the Prime badge the hands-free fulfilment and the protection of your account health metrics all combine to make FBA the structurally superior model for wholesale selling at scale.

Use Keepa to research every product before sourcing. Validate your FBA margins with AMZScout or Helium 10. Find your verified wholesale supplier through our Brands Directory. And build your business on the FBA model that gives you the best possible Buy Box position from day one.