Amazon Fulfilled by Merchant (FBM): A 2025 Guide for E-Commerce Sellers

Most new Amazon sellers don’t start with a warehouse, a team, or a shipping department. You’re probably running lean, maybe working from your garage or spare bedroom, and the thought of sending pallets into an Amazon fulfillment center feels like overkill. You want control. You want to test products without locking up tons of capital. That’s where Amazon Fulfilled by Merchant (FBM) comes in.

In this guide, I’ll explain exactly how FBM works from the ground up. We’ll go over when it makes sense to use FBM, how the fees stack up, how to set up your shipping settings correctly, and what the actual fulfillment process looks like.

Whether you’re working from your home office, a small warehouse, or a prep center, this post will help you set up FBM the right way. Let’s get started by explaining exactly what FBM is and how it works.

What Is Amazon Fulfilled by Merchant (FBM)?

Amazon Fulfilled by Merchant, often shortened to FBM, is a fulfillment method where the seller handles the entire order process themselves. That means you store your own inventory, pack each order, and ship it directly to the customer. You’re not sending products to Amazon’s warehouses, and you’re not relying on their shipping services. Instead, you’re in full control from start to finish.

This setup has its trade-offs, but for the right seller, FBM opens the door to faster turnaround times, lower upfront costs, and more flexibility. You can list and sell a product the same day you buy it, which is impossible with FBA. You also have the flexibility to experiment with different listing variations, like offering single units, multipacks, or bundles, without being locked into one option based on how inventory was prepped and shipped.

FBM is especially popular with hands-on sellers, operating on a tighter budget, or looking to capitalize on seasonal trends. It allows you to scale quickly without having to wait for Amazon to receive, process, and check in your inventory. And during high-demand seasons like Q4, FBM can be a serious competitive edge—especially when FBA sellers stock out and the Buy Box goes to FBM sellers more frequently.

It’s also worth pointing out that using FBM in your business doesn’t mean giving up FBA entirely. Many experienced sellers, around 22%, actually use both methods depending on the product or time of year. While it’s possible to run your business entirely using FBM, you can also think of it as a tool to use when it makes sense—not a replacement, but a complement to FBA.

Who Should Use Amazon FBM (and When)?

FBM isn’t for everyone—but in the right situation and with the right seller, it can be a successful way to sell on Amazon.

For some sellers, it’s about control. If you’re just starting and want to stay hands-on with your inventory, packaging, and shipping, FBM gives you that direct connection. There’s no need to ship products to Amazon’s warehouses or wait for your inventory to get checked in just to list an item. You decide how things get packed and when they go out the door.

FBM is also a great option if you’re testing new products or categories and don’t want to invest in FBA upfront. With FBM, you can list products and fulfill orders on your own while you validate demand and margins. It’s low-risk and low-commitment, perfect for testing new products before committing to a larger investment.

Another common use of FBM is for selling seasonal or trending products. With FBA, there’s always the risk of overstocking and getting hit with long-term storage fees if your seasonal inventory doesn’t sell in time. For example, if you send in too many Easter-themed items and they don’t sell before the holiday, that leftover inventory sits in Amazon’s warehouse racking up expensive monthly charges. FBM gives you the flexibility to list and sell seasonal products without locking them into Amazon’s warehouses. That means less pressure to forecast inventory perfectly and more freedom to go after profitable seasonal items, even on short notice.

Perhaps the most valuable time to use FBM is during Q4. The sharp increase in holiday demand often causes FBA sellers to stock out, and with check-in times stretching from weeks to over a month, restocking in time for the holidays becomes nearly impossible. This creates a prime opportunity for FBM sellers. With fewer FBA offers active on listings, FBM sellers have a better shot at winning the buy box and capturing high-volume holiday sales. Plus, the flexibility to source and list products on the same day gives FBM sellers a huge advantage—especially when speed is everything. While FBA inventory waits in warehouse limbo, FBM sellers are already shipping.

How to Setup Your FBM Shipping Settings

Before you can start fulfilling orders yourself, you’ll need to configure your shipping settings inside Seller Central. This is where you define where you’re shipping from, how long it takes you to ship an order, and what regions you’re willing to ship to. Getting these settings right is what ensures your listings display accurate delivery times—and keeps your customers happy.

If you’re still brand new to Amazon and haven’t set up your account or picked a business model yet, we recommend starting with our full beginner’s guide: How to Start an Amazon Business: A Beginners Guide.

1. Location Tab

To get started you’ll need to log in to Seller Central, from here click the gear icon in the top right corner and find “Shipping Settings”.

Once you’ve found your way to Shipping Settings we’ll start with the Location tab. This is where you’ll tell Amazon where your packages are shipping from, whether that’s your home, a warehouse, or a third-party prep center. This address is critical because it helps Amazon estimate transit times for customers, and it’s where your products will be sent if a customer needs to make a return.

If you’re using multiple fulfillment locations, just know that Amazon will default to the primary one you enter here for delivery date calculations.

2. General Shipping Settings

Next, head over to the General Shipping Settings tab. This section covers two important things:

Handling Time: This is the number of days you need to prepare an order before it ships. The default is one day, and that works well for most sellers. But if you’re able to fulfill orders the same day they come in, check the “Same-Day Handling” option. It can give your listings a faster delivery estimate, which can increase your chances of winning the Buy Box.

That said, not everyone can drop everything to pack a box the minute an order hits. Life happens. Families, full-time jobs, or other obligations make same-day shipping unrealistic for many sellers. And that’s completely fine. Pricing is still the biggest driver of Buy Box rotation for FBM sellers, so if same-day handling isn’t doable, sticking with 1-day handling won’t hold you back.

Order Handling Capacity: This lets you cap how many orders you’re willing to fulfill per day. If you’re just getting started or doing this part-time, it’s a great way to avoid being overwhelmed and behind on orders.

If you choose to set a maximum Amazon will automatically adjust the displayed handling time on all of your products once you hit the threshold. For example, if you have this set to “10” and by default you have 1-day handling, once you hit 10 orders in a single day Amazon will automatically display “2-day handling” on all of your products giving you an extra day to organize the shipment.

3. Shipping Templates

Finally, move to the Shipping Templates tab. This is where you define your shipping speeds, regions, and pricing.

Start by selecting the U.S. regions you want to ship to. Most sellers ship to the contiguous 48 states and add separate rates for Alaska and Hawaii. Use a tool like Pirate Ship’s USPS Zone Map to estimate delivery times based on your location. This helps you set realistic expectations for standard and expedited shipping.

We highly recommend including “Free shipping” as your default option. With so many customers accustomed to free shipping either through Amazon or other online retailers, charging for shipping is something that tends to push buyers away and can hurt your business. You can always bake the shipping cost into your product price to maintain your margins. For outlier regions or non-continental U.S. states, feel free to set a flat rate to help cover the extra shipping cost.

Under Expedited Shipping, you can offer faster delivery for an added fee. We recommend setting a default price of around $30 + $1 per pound to start. A quick tip is that during Q4, consider bumping up this rate a bit—customers are often willing to pay more to ensure gifts arrive on time.

You also have the option of using Shipping Settings Automation. This method lets you preselect which shipping carriers you want to use and then set their priority. Amazon will then automatically select the cheapest shipping method that still meets the promised delivery date, based on your preferred carriers and service priorities.

How to Fulfill FBM Orders

When a customer places an order, Amazon will notify you in several ways—via email, in your Seller Central dashboard, or through the Seller Central app. In Seller Central, head to the Manage Orders tab. Here you’ll see a list of all of your current orders based on status, click the “Unshipped” tab.

Next, click the Buy Shipping button on the order you want to fulfill. This takes you to the shipping setup page where you’ll enter your package’s dimensions and weight. Be sure you’re entering the size and weight of the actual shipping box or mailer—not just the product. Amazon uses this info to calculate your carrier options and rates, so accuracy matters.

Right after that, you’ll see a field called Declared Value. This adds extra shipping insurance based on the value you enter. Unless you’re sending something worth over $100, we recommend leaving this blank—it just adds unnecessary cost for most orders.

Once you’ve input your package details, Amazon will display a list of available shipping options. This is where you’ll choose the best service to get your order to the customer on time. As a general rule, you want the cheapest option that still meets your delivery promise. There’s no benefit to overpaying for speed your customer isn’t expecting.

After choosing your shipping method, the next step is configuring your shipping label. If you’re using a thermal printer like a Rollo or Zebra, select the 4×6″ label option. If you’re printing on a standard printer, choose the 8.5×11″ version instead. Either way, make sure your label prints clearly and is securely attached to your package.

Before sealing the deal, don’t forget to print your packing slip. This goes inside the package and gives your customer a record of the order—plus it helps reduce confusion if you’re shipping multiple items or variations.

Once your label is on and the packing slip is inside, all that’s left is handing the package off. Either schedule a pickup with your carrier (which many do for free) or drop it off at your local post office or shipping hub. And just like that, your product is on its way to the customer—with full tracking through Amazon.

Pros and Cons of Amazon Fulfilled by Merchant

FBM isn’t a one-size-fits-all solution. For some sellers, it’s a smart move that unlocks higher margins and more control. For others, it’s a logistical headache that makes it harder to compete with FBA sellers. To help you decide if FBM fits your business, let’s break down the key advantages and trade-offs, starting with the upsides.

Pros of FBM

FBM can offer more flexibility and can be much quicker to scale—if you have the right systems in place. It requires less startup capital, lets you avoid Amazon’s storage fees, and can work especially well for certain types of products.

• Faster Cashflow: With FBM there is no need to wait for your products to arrive at Amazon and get checked in. You can simply source a product and sell it the same day. This makes the process of growing and scaling your business much quicker without having to wait weeks for your inventory to be processed.
• More Control: Amazon fulfilled by merchant sellers can quickly adjust listings based on market trends. For example, it is easy for an FBM seller to list the same product under a single listing, 2-pack, 6-pack, etc based on pricing and sales velocity. This is impossible for FBA sellers who must make a permanent decision before sending their inventory to Amazon.
• Lower Startup Costs: FBM offers the flexibility to start selling on Amazon with a smaller budget. Even if you only have a few products to sell you can still make a profit selling with FBM. This is not the case with FBA where the costs of shipping inventory to Amazon make it unreasonable.
• Great for Seasonal Items: FBA sellers face a big risk when it comes to selling seasonal items. If you misjudge demand you’re stuck with inventory that quickly racks up long-term storage fees. With FBM you are able to sell seasonal or trending items without the risk of extra fees.
• Easier to Maintain Multi-Channel Sales: FBM makes it easier to sell on multiple platforms like Shopify, Walmart, or eBay using a single fulfillment process, rather than splitting inventory between Amazon and other channels.

Cons of FBM

FBM gives you more control, but it also comes with more responsibility. You’ll need to handle everything Amazon would normally do for you—and that means more work, more risk, and higher expectations.

• No Prime Badge by Default: Unlike FBA, FBM doesn’t automatically qualify your listings for the Prime badge. That can hurt your visibility and conversion rate, with many shoppers avoiding listings that don’t include 1-2 day Prime shipping.
• More Manual Labor: FBM sellers must put in the work of organizing, packing, and shipping all of their own orders along with handling customer service and returns. This is a big-time investment that is not feasible for every seller.
• Harder to Win the Buy Box: Amazon prioritized FBA sellers for the Buy Box to the point that FBM sellers often have to price their products cheaper than FBA sellers in order to have a chance at winning it.
• More Risk of Negative Feedback: With FBA it is easy for sellers to get negative feedback related to shipping or logistics removed from their account. As an FBM seller, this is not the case. Since you are directly responsible for shipping each product to your customer any negative feedback related to logistics is your responsibility.

Understanding Amazon FBM Fees

While FBA and Amazon Fulfilled by Merchant sellers have different fees to worry about, there are a couple of universal costs that every Amazon seller has to deal with. First, there are referral fees on every sale—usually 8% to 15%, depending on the category. These are fees that Amazon charges for giving you access to their customer base. There is also the cost of your seller plan, which for the Professional Seller plan, is another $39.99 per month.

Where FBM starts to differ is in the day-to-day fulfillment costs, most of which are on you:

• Shipping Costs: This is your biggest ongoing expense. You’ll be responsible for choosing carriers, comparing rates, and covering the cost—whether the buyer pays for shipping or not. Services like Pirate Ship or Amazon’s Buy Shipping tool can help you snag lower rates, especially if you’re shipping at scale.
• Supplies & Packaging: You’ll need boxes, poly mailers, packing tape, labels, and cushioning materials like bubble wrap or kraft paper. You’ll also want to consider investing in a thermal printer to save time and money on printer ink. For boxes, you have a couple of options. You can score free shipping supplies from several couriers like USPS or UPS, though you’ll be forced to stick with their services. For unbranded boxes sites like Uline have a huge selection of different sizes and strengths.
• Tools & Software (Optional): As you grow, you might need tools like Boxem or InventoryLab to streamline order management and label printing. They’re not required, but they can save serious time if you’re shipping more than a few orders a day.

Can FBM Sellers Still Offer Prime Shipping?

For FBM sellers with great logistics and an excellent track record, there is the possibility of getting a Prime badge on your listings through a program called Seller Fulfilled Prime (SFP). This lets you deliver the Prime experience (fast, free shipping with the Prime badge) while still handling fulfillment yourself. But there’s a catch: you have to earn it.

Amazon holds SFP sellers to some of the strictest performance standards on the platform. To qualify, you’ll need to:

• Ship over 99% of orders on time
• Maintain a cancellation rate below 0.5%
• Offer nationwide delivery with weekend shipping
• Use Amazon’s Buy Shipping Services on nearly every order

If you meet these requirements you’ll then be put through a 30-day test period where you’ll need to meet the following requirements:

Amazon also regularly audits SFP accounts, and missing the mark—especially during peak season—can mean getting kicked out of the program entirely. On top of that, new enrollment is usually closed, and even when it opens, there’s often a waitlist.

The reality is that depending on your location and the carriers you have access to, this may or may not be a viable option for your FBM business. While the requirements can be difficult to meet, the conversion rate increase, and buy box percentage that comes with getting a Prime badge for your products more than make up for it.

FBM vs. FBA: Which Is Right for Your Business?

If you’re torn between Fulfilled by Merchant (FBM) and Fulfilled by Amazon (FBA), the best choice depends on your products, business goals, and how hands-on you want to be.

FBM sellers need to be more “hands-on” with every part of their business. While this comes with a lot of flexibility and control, the time investment can be a no-go for many sellers. On the flip side, FBA gives sellers more time to focus on the big picture. With Amazon handling the logistics side of your business you can focus on things like marketing, product sourcing, and the more creative aspects of running an e-commerce business. Of course, the downside is that you are always at the whim of Amazon’s ever-changing fees and requirements.

For a more in-depth breakdown of the differences between these two fulfillment methods check out our article on Amazon FBA vs FBM.

Frequently Asked Questions (FAQs)

Final Thoughts: Is Amazon FBM Right for You?

With only around 34% of Amazon sellers using FBM, it isn’t nearly as popular as FBA. However, in the right situation and with the right products this fulfillment method be a “cheat code” to scaling your Amazon business.

If you want more control over your costs, your customer service, and how your products are packed and shipped, Amazon Fulfilled by Merchant gives you that freedom. It’s especially useful for sellers with low-volume or oversized products or those looking to stay lean without relying on Amazon’s warehouses.

That said, it’s not a one-size-fits-all solution. FBM comes with more responsibility—and that means more time investment. But if you’re willing to put in the work and set things up the right way, it’s a flexible, cost-effective fulfillment method that can help you scale your business much faster than FBA.

And remember: you don’t have to pick just one. Many successful sellers use both FBM and FBA depending on the product, season, or sales channel. Start with what fits your setup now—and adjust as your business grows.

Recommended Articles:

• Amazon FBA vs FBM: Which Fulfillment Method is Right for You?
• How to Start an Amazon Business in 7 Simple Steps (Beginner’s Guide)
• Amazon Inventory Management: A Complete Guide for 2025