FBA vs FBM: which is more profitable, SKU by SKU?

“Should we use FBA or ship it ourselves?” is one of the first questions a brand asks about Amazon, and it is usually asked about the whole business. That is the wrong unit. FBA’s fees are set by each product’s size, weight and how long it sits in a warehouse, and your own costs vary the same way, so the right answer often differs between two products in the same range. This guide gives you the per-unit sum, runs it on four example products and turns the results into a decision table. For how FBA works, read what Amazon FBA is and when it pays; for every fee tier, our Amazon FBA fees UK guide.

FBA vs FBM at a glance

FBA means Amazon stores your stock and picks, packs and delivers each order; your products qualify for Prime and free delivery, and Amazon provides customer service and handles returns¹. FBM, fulfilment by merchant, means you or your 3PL do all of that. Seller Fulfilled Prime sits between them: you ship, but keep the Prime badge, if you meet Amazon’s standards¹¹.

What matters for profit is which cost lines change:

The referral fee drops out of the comparison because you pay it either way. Leave it out, and you are left with a clean like-for-like.

Can you sell through Amazon without FBA?

Yes. Plenty of established sellers fulfil some or all of their Amazon orders themselves, and nothing in Amazon’s rules requires FBA. What you take on is the operation, and a set of metrics Amazon uses to judge it:

• Cancellation rate under 2.5%, measured over seven days, on seller-fulfilled orders⁷.
• Valid tracking rate of 95% over 30 days; seller-fulfilled offers below it may be deactivated⁸.
• Late shipment rate, measured over 10 and 30 days; a high rate puts seller-fulfilled offers at risk of deactivation⁹.

Buy Shipping, Amazon’s label-buying service, takes some of the sting out. If you buy labels through it and dispatch on time, you are protected from A-to-z claims about delivery problems affecting your Order Defect Rate, although you still carry the financial loss, and feedback that only concerns late or missing parcels can be struck through¹⁰.

You also own customer service and returns, which FBA would otherwise handle¹. For a brand with a warehouse and a customer service team already serving its website, that is often a small step. For a brand that relies on a 3PL, it means checking that the 3PL can meet same-day dispatch and Amazon’s tracking rules before switching anything.

Prime eligibility: the difference that moves conversion

The cost comparison is only half the decision. Amazon says products sold through FBA qualify for Prime and free delivery¹; plain FBM offers do not carry the badge. That matters most where shoppers filter for Prime and where the competing offers on the first page already show it.

You can have the badge without FBA through Seller Fulfilled Prime, but the bar is high. In the UK it requires a Professional account, a 99% on-time shipment rate, cancellations of 0.5% or less, Buy Shipping on at least 98% of Prime orders, approved carriers and dispatch on a weekend day as well as weekdays¹². Our Seller Fulfilled Prime guide covers the trial, the carriers and the costs.

So there are really three options to compare for each product: FBA, Seller Fulfilled Prime and plain FBM.

The per-unit formula

Work out both sides for one unit sold, using your real cover (how long a unit sits before it sells) rather than Amazon’s minimums.

The 1.015 is the 1.5% fuel and logistics surcharge on UK FBA fulfilment fees since 17 April 2026⁵. The 1.02 is the 2% digital services fee, which Amazon applies to FBA fees as well as selling fees on UK sales⁶. The difference between the two lines is what FBA saves or costs you on every unit, before Prime does anything for sales.

Four products, worked through

Here is the sum for four products from a hypothetical homeware brand that ships about 60 parcels a day across its channels, so it qualifies for Amazon Shipping’s 50-to-99-parcel band. For FBM it uses two-day services. Amazon’s fees, storage rates and the carrier rates are published figures; packaging, labour, space, customer service and freight are illustrative, so replace them with your own.

The FBA fees are from Amazon’s 2026 UK tables: £1.52 for a low-price light envelope up to 60 g³; £3.49 for a standard parcel up to 2.9 kg; and £4.35 plus £0.15 for each kilogram above 760 g for standard oversize light², where we count each started kilogram. The phone case gets low-price FBA rates because it is priced below £20 and weighs under 400 g³. Storage is £0.76 per cubic foot a month for standard-size and £0.55 for oversize from January to September⁴. The labels are from Amazon Shipping’s published UK rate card¹⁵.

Three lessons come out of the table:

• Small and standard parcels favour FBA, often by more than people expect. Amazon’s fee covers the label, the packing and the customer service for less than most brands pay for the label alone.
• Bulky, slow products favour FBM. The ottoman pays for 19 kg it does not weigh, and for two months of space. FBM saves £3.86 a unit, and from October, when oversize storage rises to £0.87 per cubic foot⁴, the gap widens.
• Carrier bands matter as much as Amazon’s. The bathroom cabinet is 62 cm long, 1 cm over the carrier’s medium-parcel limit of 61 cm, so it pays the large-parcel rate¹⁵. Repackaged at 60 cm, its FBM cost would fall to about £8.02, roughly level with FBA. Check both rate cards before you decide, and before you design the box.

Then ask what Prime is worth

Where FBM is cheaper, you still have to ask whether losing the badge costs more in sales. Say the ottoman leaves £26.42 a unit after VAT, referral fee, cost of goods and advertising, before fulfilment (illustrative). Through FBA it makes £13.23 a unit; through FBM, £17.09.

For the ottoman that is £3.86 ÷ £13.23 = 29%. If the Prime badge lifts its sales by more than 29%, FBA makes more money despite the higher cost per unit; if not, FBM does. Amazon does not publish a conversion uplift you can rely on for a single product, so the honest way to find out is a test: one product, one change, four to six weeks, the same advertising. Or take the third route: Seller Fulfilled Prime keeps the badge at a cost close to FBM’s, and on the same assumptions it makes £16.17 a unit.

The decision table

This is how we start the conversation with a brand. It is our practice, not an Amazon rule, and every row is a default to test with the sum above, not a verdict.

The aged inventory surcharge, returns processing fee and dangerous goods charges are set out in our FBA fees guide.

The hybrid approach

Very few of the brands we work with run a single model. The pattern we see most often has three parts:

1. FBA for the core range: the small and standard-size products that sell every day. They earn Prime, and Amazon carries the operational risk.
2. Seller Fulfilled Prime or FBM for the bulky and slow lines, shipped from the brand’s own warehouse or 3PL, which usually already serves its website and trade customers.
3. A merchant-fulfilled fallback for FBA lines. When an FBA product is about to run out, switching the offer back to merchant fulfilment from the brand’s own stock keeps it selling while replenishment is in transit. This is our practice; plan it before you need it.

The hybrid also protects you from capacity limits, which cap how much stock you can send to FBA; our inventory management playbook covers how to plan within them. And it gives you something to compare. A brand that only uses FBA rarely knows what its own fulfilment would cost, and so never knows whether FBA is a bargain or a habit.

Amazon Multi-Channel Fulfilment

Multi-Channel Fulfilment (MCF) runs the other way: it uses your FBA stock to fulfil orders from outside Amazon, including your own website, through integrations such as Shopify and WooCommerce. No referral fee is charged on MCF orders. Sortable items up to 45.72 × 35.56 × 20.32 cm and 9 kg can ship in packaging without Amazon branding, and there are two speeds, Standard (48 hours) and Expedited (next day)¹³.

It is not priced like FBA. UK MCF fees rose by an average of 3.5% per unit on 29 May 2026, for single-unit orders on envelopes and parcels and for all oversize orders, and a 1.5% fuel and logistics surcharge has applied since 2 May 2026¹⁴. The fee per item falls as the order gets bigger:

MCF rates are from Amazon’s 2026 UK MCF table¹⁴ and FBA rates from its 2026 UK fee table², both before the 1.5% surcharge.

So MCF makes sense when your website orders are small and multi-unit, when you do not have a warehouse of your own, or when holding one pool of stock saves more than the fee premium. For single-unit orders it often costs more than shipping the parcel yourself. Whether TikTok Shop orders can go through MCF depends on TikTok’s own UK fulfilment rules, which our guide to running Amazon, TikTok Shop and your own site together covers.

Run the comparison on your own catalogue

1. Export your catalogue with dimensions, weights, prices and monthly sales for each product.
2. Work out FBA’s cost per unit for each with the FBA calculator, using the cover you actually hold.
3. Cost your own fulfilment for the same products with your real carrier rates, packaging and labour.
4. Rank by the difference. Products where FBA is cheaper stay in FBA. For the rest, work out the uplift FBA would need, and test the closest calls.
5. Repeat every quarter, and every October, when FBA storage roughly doubles for standard-size stock⁴.

The decision is worth getting right because it compounds: fulfilment is often the second-largest Amazon cost after the referral fee, and it changes your break-even ACoS, and so how hard you can advertise each product. Our seller fees guide puts it alongside everything else Amazon charges, and the Profit X-Ray shows profit after advertising for your whole account.