What is FBM (Fulfillment by Merchant)?

Fulfillment by Merchant (FBM) is the alternative to FBA on Amazon’s marketplace, where sellers retain full control over their fulfillment operations. When a customer places an order on Amazon for an FBM listing, the seller receives the order notification and is responsible for picking, packing, and shipping the product from their own warehouse, retail location, or third-party logistics provider. The seller also handles customer service communications and returns processing for FBM orders. FBM listings can still qualify for Prime through Seller Fulfilled Prime (SFP), though the program has strict performance requirements including one-day and two-day delivery capabilities.

Why It Matters

FBM gives sellers direct control over the customer experience—custom branded packaging, personalized inserts, quality control at the point of shipment, and direct customer relationships. For sellers with established warehouse operations or those selling products that don’t fit well into Amazon’s FBA model (oversized items, hazardous materials, temperature-sensitive products, or custom/made-to-order goods), FBM is often the only viable option.

Cost is another major consideration. FBM eliminates Amazon’s FBA fees—storage fees, fulfillment fees, long-term storage surcharges, and removal fees. For sellers with efficient in-house fulfillment operations, FBM can be significantly more profitable per unit than FBA, especially for products with thin margins or slow turnover rates that would accumulate costly long-term storage fees in Amazon’s warehouses. The trade-off is that FBM sellers must invest in their own fulfillment infrastructure, carrier relationships, and customer service capabilities.

How It Works

FBM requires sellers to manage the complete post-purchase workflow:

• Order Receipt: When a customer places an order, Amazon sends the order details to the seller through Seller Central or via API integration with the seller’s order management system. The seller’s system captures shipping address, product details, and the required ship-by date.
• Fulfillment Execution: The seller picks the ordered items from their inventory, packs them according to their own standards (with an opportunity for branded packaging and marketing inserts), and generates a shipping label through their preferred carrier. Products must ship within the handling time specified in the listing.
• Shipping and Tracking: The seller ships the package and uploads tracking information to Amazon. Timely tracking uploads are critical—Amazon monitors FBM seller performance metrics including on-time shipment rate, valid tracking rate, and late shipment rate. Falling below performance thresholds can result in account suspension.
• Customer Service: FBM sellers handle buyer messages, shipping inquiries, and return requests. Amazon sets response time requirements (typically 24 hours), and customer service performance affects the seller’s overall account health and Buy Box eligibility.
• Returns Processing: When customers initiate returns, FBM sellers provide return labels, receive returned products, inspect them, and process refunds. Return policies must comply with Amazon’s minimum requirements.

How Nventory Helps

Nventory streamlines FBM operations by integrating Amazon orders directly into your centralized order management workflow. Orders from Amazon flow alongside orders from your other sales channels, enabling unified fulfillment processing without switching between systems. Real-time inventory sync ensures that your Amazon FBM listings reflect accurate stock levels, preventing overselling. Automated shipping label generation and carrier rate comparison help FBM sellers ship orders quickly and cost-effectively, maintaining the performance metrics Amazon requires for account health.