FBA (Fulfilled by Amazon)

FBA — Fulfilled by Amazon — is the arrangement where you send your inventory to Amazon and Amazon does the rest: storing it, picking and packing each order, shipping it under Prime, and absorbing most customer service and return handling. In exchange, you pay per-unit fulfillment fees and monthly storage, and you give up control of packaging and inventory placement.

For fast-moving consumer products, the Prime badge is the reason sellers accept that trade.

How FBA Works, Step by Step

1. List the product and set the listing to Amazon-fulfilled.
2. Create a shipment plan in Seller Central. Amazon assigns which fulfillment centers your units go to — often splitting one shipment across several buildings.
3. Prep the inventory to Amazon's requirements: FNSKU labels, poly bags with suffocation warnings, bubble wrap for fragile goods, bundle and set labeling, expiration dating where required.
4. Ship it in, with carton content data so receiving can check units in accurately.
5. Amazon receives and stocks the units across its network.
6. Orders ship automatically, with Prime delivery speeds.
7. Amazon handles returns and most customer contact.

What FBA Costs

FBA billing has three layers, and sellers routinely model only the first:

• Fulfillment fee — per unit shipped, set by the item's size tier and weight. Bulk and weight escalate this fast.
• Storage fee — monthly, billed by cubic foot, higher in the Q4 peak months, with long-term storage fees on units that age past Amazon's threshold.
• Program and placement fees — inbound placement charges, prep and labeling fees for non-compliant units, removal and disposal fees, and returns processing on some categories.

Referral fees apply to every Amazon sale regardless of who fulfills it.

Amazon revises these schedules regularly, so model your unit economics against the current fee schedule in Seller Central, not a number from a blog post — including this one. The structural point that doesn't change: FBA fees scale with size, weight, and dwell time, which is why bulky slow movers are the worst FBA candidates and small fast movers are the best.

For a practical breakdown on one of the fees sellers can actually control, see how to lower Amazon's placement fee.

The Prep Requirement Most Sellers Underestimate

Amazon will not accept inventory that isn't prepped to spec. Depending on the product, that means:

• FNSKU labels applied so the unit is uniquely traceable to your account, with any manufacturer barcode covered.
• Poly bagging with the required suffocation warning on bags above a certain size.
• Bubble wrap or protective packaging for fragile items.
• "Sold as set" labeling on multi-packs so receivers don't split them.
• Expiration date labeling for consumables.
• Carton content and shipping labels on every box.

Getting this wrong costs money twice: Amazon charges to fix it, and the shipment sits unreceived while your listing goes out of stock.

Suppliers usually won't do this correctly, and doing it at home doesn't scale. That's the gap a prep center fills — Honeybee receives supplier inventory, preps it to Amazon's requirements, and forwards it to the assigned centers (details here).

When FBA Isn't the Right Answer

Move a product to FBM or a 3PL when:

• Size-tier fees dominate the margin (bulky or heavy goods).
• Inventory turns slowly and storage fees accumulate.
• Unboxing is part of your brand and Amazon's plain box undermines it.
• You sell across Shopify, eBay, and Etsy too, and splitting inventory between Amazon's network and your own creates two stock positions to forecast.
• Storage limits cap what you can send in during your peak.

Plenty of mature sellers run both: FBA for the fast-moving core, FBM for everything the fee schedule punishes.