Amazon FBM vs FBA: what actually changes, and where prep fits

FBM and FBA are two ways of fulfilling Amazon orders. With FBM (Fulfilled by Merchant), the seller or its fulfilment partner holds the stock and fulfils each customer order. With FBA (Fulfilment by Amazon), the seller sends inventory into Amazon's fulfilment network and Amazon fulfils eligible customer orders from that stock, including the customer service and returns around them. FBA prep is the work required before inventory is sent into Amazon's network. Replenishment is the ongoing movement of more inventory into that network, to the seller's plan and Amazon's current shipment requirements. Many sellers use both models, because the operational responsibilities are genuinely different.

The short answer

The difference is not the sales channel. In both models Amazon is the marketplace where the order is placed. What changes is who fulfils the order once it is placed. With FBM, fulfilment stays on the seller’s side: the seller, or a third-party fulfilment partner acting for the seller, stores the stock, picks and packs each order, and hands it to a carrier. With FBA, the seller ships inventory into Amazon’s fulfilment network in advance, and Amazon picks, packs and ships eligible customer orders from that inventory, along with the associated customer service and returns. Everything below follows from that one split in responsibility.

1. Who holds the stock?

Under FBM, stock stays with the seller or its fulfilment partner, in the seller’s own warehouse or a third-party one. The seller decides where inventory sits and how much to hold. Under FBA, the inventory you allocate to FBA is sent into Amazon’s fulfilment network, where Amazon stores it until an order is placed, and it may be held across more than one fulfilment centre.

A practical consequence is that FBA stock and non-FBA stock are two separate positions. Once units are sent into Amazon’s network they are managed under Amazon’s processes, while anything you keep back stays under your own control. Many sellers deliberately hold buffer stock outside Amazon so they can replenish FBA without running the whole business through it.

2. Who picks, packs and ships the order?

With FBM, the picking, packing and carrier handoff all happen on the seller’s side. If you run this yourself it is your own operation; if you use a 3PL, that partner picks, checks, packs and hands the order to a carrier, much like a direct store order. Amazon’s Buy Shipping tools can be used to buy and print carrier labels at negotiated rates, but the physical fulfilment is yours to run.

With FBA, Amazon does the fulfilment. Once an eligible order is placed, Amazon picks, packs and ships it from the inventory in its network, and handles the customer service around that order. The seller’s operational job for FBA is upstream: getting correctly prepared inventory into the network in the first place.

3. Control over packing and delivery works differently

Because FBM fulfilment runs on your side, it usually gives more direct control over how an order is packed and shipped: the packaging and presentation, any inserts, the carrier and service chosen for a given parcel, and the dispatch process itself. That control depends on how your own operation or your 3PL is set up. It is not automatic simply because an order is FBM.

With FBA, fulfilment follows Amazon’s own processes and the requirements of any programme the product is enrolled in, and Amazon decides how eligible orders are picked, packed and shipped from its network. Neither model is universally better. FBM tends to suit orders where packing presentation or carrier choice matters; FBA tends to suit sellers who want to hand the fulfilment step to Amazon and, where products qualify, offer Prime delivery on those listings.

4. Returns follow different operational paths

Returns are one of the clearest operational differences. For FBM orders, returns come back through the seller’s own return operation, or that of the seller’s fulfilment partner, and are inspected, graded and either put back into sellable stock or held as exceptions under the seller’s agreed rules. That is the same reverse-logistics discipline as any direct channel, covered by returns management.

For FBA orders, Amazon manages the customer return and the related customer service under its current programme rules, and the outcome for the underlying inventory is handled through Amazon’s processes. Units can later be removed from Amazon’s network back to the seller, at which point they re-enter the seller’s own returns and rework operation. The exact FBA return and reimbursement rules are set by Amazon and change over time, so they are worth checking against current Amazon documentation rather than assumed.

5. Where FBA prep fits

FBA prep is the work that happens before inventory is sent into Amazon’s network, so that Amazon will receive and store it. Depending on the product and Amazon’s current requirements, that can include product labelling (for example an FNSKU barcode where a product does not use an eligible manufacturer barcode), packaging where required, and preparing the shipment itself: cartonising to the plan, and applying the Amazon shipment and box labels generated in the Send to Amazon workflow.

Not every unit needs the same preparation, and requirements differ by product, so prep is applied where Amazon’s guidelines call for it rather than uniformly. A third-party partner can carry out this preparation on the seller’s behalf. This is the operational side of Amazon fulfilment and FBA prep: inspecting, preparing, labelling where required, cartonising and dispatching into Amazon’s network. Using a prep provider does not guarantee that Amazon will accept a shipment; it prepares stock to the requirements that apply.

6. Where FBA replenishment fits

FBA inventory gets used up as orders ship, so it has to be topped up. Replenishment is the ongoing process of preparing and sending additional inventory into Amazon’s network, according to the seller’s inventory plan and Amazon’s current shipment requirements. In practice, a seller often holds buffer stock outside Amazon, in their own or a 3PL’s warehousing and inventory operation, and draws on it to prepare and dispatch the next FBA shipment when stock needs topping up.

A fulfilment partner can handle the physical preparation and outbound movement of each replenishment shipment. What a partner does not do is decide Amazon inventory policy: how much to send and when is the seller’s decision, made against their own plan and Amazon’s requirements. There is no automatic forecasting or autonomous restocking behind it. Replenishment is a prepared, dispatched shipment, not an algorithm.

7. Can a seller use both FBM and FBA?

Yes. Amazon is explicit that a seller can use FBM, FBA, or a combination of both to meet the needs of their business. The two models are not mutually exclusive, and many sellers run them side by side. Reasons vary: a seller might keep bulky or slow-moving lines on FBM while putting fast-moving, Prime-eligible lines into FBA; hold some inventory back as an FBM buffer against an FBA stockout; or fulfil a launch or a demand spike on FBM while FBA stock is being replenished.

The right split depends on the products, the order profile and where stock sits. This article does not argue that one model is better, or that a hybrid is always right. Those are commercial decisions for the seller, not a universal rule.

8. What does a hybrid FBM and FBA operation look like?

When a seller runs both, one wider inventory operation can sit behind several flows: merchant-fulfilled Amazon orders picked, packed and shipped directly; FBA shipments prepared and dispatched into Amazon’s network; replenishment of that FBA stock over time; returns and any removals coming back for inspection and rework; and often other sales channels such as a DTC store, TikTok Shop or B2B orders.

The important detail is that these flows stay operationally distinct even when they draw on the same wider stock position. Inventory that has already been sent into Amazon’s network is under Amazon’s control and is not the same pool as the stock a 3PL still holds. The two are tracked separately, and orders are not routed automatically between them. That coordination across channels is the marketplace and multi-channel fulfilment model: one stock operation, different agreed rules per channel, rather than one undifferentiated pool.

Questions to ask before choosing an operating model

• Where do you want inventory held: with you, a fulfilment partner, or inside Amazon’s network?
• How much direct control do you need over packing, presentation and carrier choice?
• Which products or order profiles suit merchant fulfilment, and which suit FBA?
• How will buffer stock be held and managed outside Amazon?
• Who will prepare and dispatch your FBA shipments?
• How will replenishment decisions be made, and against whose plan?
• How will merchant-fulfilled returns be received and processed?
• How will Amazon removals or returned inventory be reviewed when they come back?
• How will your other sales channels share the same wider stock operation?

Frequently asked questions