What is Amazon FBA? How it works in the UK, what it costs and when it pays

Fulfilment by Amazon is usually explained to people starting a side business. This guide is for a different reader: a brand that already sells, already has a warehouse or a 3PL, and wants to know whether handing fulfilment to Amazon will leave it with more profit or less. For the detail on each step, read our guides to FBA prep and labelling and sending stock with Send to Amazon; for current rates, the UK FBA fees guide.

What Amazon FBA is

Amazon describes FBA simply: you send products to its fulfilment centres, and it picks, packs and delivers them and provides customer service¹. Its sales page adds that Amazon handles returns and refunds, and deals with unsold stock when you choose to recover or dispose of it². Customer enquiries, refunds and returns for FBA items bought on Amazon are handled by Amazon’s own team³.

What you get in return for the fees is mostly two things: Amazon’s delivery promise, which makes your offer eligible for Prime and free delivery¹, and the removal of a chunk of operational work you would otherwise staff and pay for.

There are three ways to fulfil an Amazon.co.uk order, and most of the brands we work with use more than one:

Seller Fulfilled Prime requires a Professional account, a UK warehouse, on-time shipping of 99% or more and cancellations below 0.5%². It is the main alternative when you want the Prime badge on a product that FBA makes too expensive.

Since 31 March 2026 there is one more difference worth knowing. Amazon has ended commingling, so customers who buy from you receive units from your own stock, including returns and removals¹⁰. Brand owners in Brand Registry can keep using their own barcodes without Amazon stickers; resellers must label every unit¹⁰.

How Amazon FBA works, step by step

The order matters here, because a mistake at an early step shows up as a cost or a delay at a later one.

Amazon says inventory is generally scanned and available for sale within a few working days of reaching a fulfilment centre, and lists the shipment statuses above¹. Two of the steps changed in 2026. Amazon stopped offering prep and labelling services for FBA shipments in its European stores from 1 July 2026⁹, so every unit must now arrive ready to sell. And how much you can send each month is capped by a capacity limit, measured in cubic feet per storage type; new Professional accounts that have used FBA for less than 39 weeks have no limit while they build a sales record¹¹. Our inventory management playbook covers how to plan within those limits.

What FBA adds to your costs

This guide deliberately has no fee table: rates change several times a year, and we keep them in one place, the Amazon FBA fees UK guide. What matters here is which cost lines FBA adds and how each one behaves.

• The referral fee does not change. You pay Amazon’s selling fee on every sale however it is fulfilled, so leave it out of the FBA decision.
• A fulfilment fee per unit sold, set by size tier and weight. It covers picking, packing, delivery, customer service and returns handling². A 1.5% fuel and logistics surcharge has applied to UK fulfilment fees since 17 April 2026².
• Monthly storage, by volume. Standard-size products pay £0.76 per cubic foot a month from January to September and £1.51 from October to December⁴. Volume, not value, drives it.
• The aged inventory surcharge, charged monthly on stock held for 241 days or more, from £1.18 per cubic foot in the first band⁵.
• Returns processing. In the UK it applies to clothing, accessories and footwear at 50% of the unit’s fulfilment fee, and to other products when returns exceed a category threshold, such as 7.14% for home and kitchen⁶.
• Seasonal peak fees on many UK FBA orders delivered between 15 October 2026 and 14 January 2027⁸.
• Getting stock in: freight to Amazon, plus prep and labelling, which you now do yourself or pay a prep centre for⁹.

There is also good news for cheaper products. Low-price FBA rates apply automatically to eligible products, with the same delivery speeds as standard FBA, and the UK price threshold for most categories rose from £10 to £20 on 5 January 2026⁷.

For your own numbers, the FBA calculator works out the fees per product, and our seller fees guide puts them alongside everything else Amazon charges.

When FBA raises net profit

FBA earns its fees in three ways.

Conversion. The Prime badge and fast, free delivery are what many shoppers filter for. Amazon’s UK page claims that three out of four FBA orders reach the customer in a day or less, and that sellers saw a 35% sales uplift on average when moving products to FBA². Treat the second figure with care: Amazon says it comes from an analysis in 2019 and 2020, is not specific to any product and is not a guarantee². In the accounts we manage, the gain is largest where the competing offers on page one already carry the badge and yours does not.

Cost you no longer carry. Picking, packing, postage, packaging, customer service and returns handling all move into one fee. For a small parcel that fee is often close to what a brand pays to do the same job itself, once labour and space are counted honestly.

Reach beyond Amazon. Multi-Channel Fulfilment ships orders from your own website and other channels out of the same FBA stock¹², so one pool of inventory can serve several channels.

When FBA lowers net profit

The same fee structure works against some products:

• Bulky products. Storage is charged per cubic foot⁴, and oversize fulfilment fees are high, so a large, light product can cost more to hold and ship through FBA than through a courier you have negotiated with.
• Slow sellers. Every month a unit sits at Amazon it pays storage, and from 241 days the aged surcharge on top⁵. A product that sells a few units a week needs either small, frequent shipments or a different fulfilment route.
• High-return categories. Clothing and footwear pay a returns processing fee on every return⁶, and other categories pay one above their return-rate threshold.
• Very cheap products. A fixed per-unit fee takes a large share of a low price. The wider low-price band helps⁷, but at £8 or £12 the fulfilment fee is still a big slice of the margin.

A worked example: two products, one decision

Here are two products from a hypothetical homeware brand. The storage rates are Amazon’s⁴; the fulfilment fees, freight and own-fulfilment costs are illustrative, so replace them with your own. Labour is costed at the National Living Wage of £12.71 an hour¹³.

The utensil set is cheaper to fulfil through FBA by about £1 a unit before Prime does anything for conversion. That is an easy decision.

The storage box costs £5.34 a unit more through FBA. Whether that is worth paying depends on how many extra sales Prime brings, and you can work out the answer:

Say the storage box leaves £23.60 a unit before fulfilment. The break-even uplift is £5.34 ÷ (£23.60 − £19.69) = 137%. FBA would need to more than double the box’s sales just to match the profit from shipping it yourself, and it costs more again from October, when the oversize storage rate rises to £0.87⁴. For a product like this we would look at Seller Fulfilled Prime to keep the badge, or at FBA with much smaller, more frequent shipments to cut the storage line.

Is Amazon FBA worth it for your brand?

Not as a single answer. In our experience the right question is “which products?”, and the answer usually splits a catalogue three ways:

1. FBA by default: small and standard-size products that sell steadily. The fee is competitive and Prime helps conversion.
2. FBA with care: seasonal, high-return or mid-size products. Use it, but control cover tightly, watch return rates, and plan around the peak period⁸.
3. Elsewhere: bulky, slow, fragile or made-to-order products. Seller Fulfilled Prime or your own fulfilment usually leaves more profit.

Revisit the split when fees change, when a product’s sales rate changes, and every October, when storage roughly doubles for standard-size stock⁴.

How to start Amazon FBA in the UK

If you already sell on Amazon.co.uk, every seller account can use FBA¹. The steps for a brand are:

1. Choose the products. Run the per-unit comparison above for each one, starting with your best sellers.
2. Check your plan and barcodes. You need the Professional plan, £25 a month excluding VAT². If you are the brand owner in Brand Registry, your products may be able to use their manufacturer barcodes without Amazon labels¹⁰.
3. Convert the offers to FBA in Seller Central¹.
4. Prep and label to Amazon’s rules. Our FBA prep guide covers what each product type needs and what it costs to do in-house or through a prep centre.
5. Create the shipment in Send to Amazon. Our shipment guide walks through each step, box content information and carrier choices.
6. Plan stock and capacity from the first shipment, using the inventory management playbook.

Then judge it the way you would any other cost: on profit per product, after fees and advertising. The Profit X-Ray shows that for your own account, and the break-even ACoS guide shows how fulfilment costs flow through to what you can afford to spend on ads.