Fulfillment by Amazon (FBA) is an Amazon solution that allows sellers to send their products to Amazon, and Amazon will store, pack, ship, and assist with customer service on the sellers’ behalf. Put simply, Amazon takes what would otherwise be a logistical nightmare off your shoulders so you can focus on building your brand.

Fulfilled By Merchant (FBM) is when a seller lists a product on Amazon and handles the warehousing and shipping aspect of things. Sellers use their own resources and send the item directly to the buyers instead of paying a service fee to Amazon. In FBM, the seller assumes complete responsibility for warehousing, shipping, and customer service.

FBA (Fullfilled by Amazon) is an Amazon service that enables sellers to send inventory to Amazon so that they can store, ship and handle returns of your products for a fee. FBM (Fulfilled by Merchant) is where the seller stores, ships and handles returns on their own.

So, what is Amazon FBA and why is it used more than FBM? Well, FBA is better for high volume, higher margin products where sellers don’t want to handle storing and shipping products. FBM is better for smaller scale, small margin products or one-off products where the seller doesn’t mind storing and shipping products. If you like having more control over your inventory then FBM is for you, however, if you like the idea of Amazon storing and dealing with returns, then FBA is the way to go.

If you’d like to get an idea of how much it will cost selling a given product through FBA vs FBM, check out our Profitability Calculator in our free Chrome Extension.