Amazon’s Fulfilled by Merchant (FBM) program, often overshadowed by the company’s Fulfillment by Amazon (FBA) service, is gaining new momentum as sellers explore fresh opportunities created by shifting market conditions, evolving consumer expectations, and strategic updates from the company.
For years, FBA has dominated conversations about Amazon’s third-party ecosystem, with its promise of Prime eligibility, fast delivery, and seamless logistics. However, the FBM model, where sellers handle storage, packaging, and shipping directly, is beginning to attract renewed interest as merchants reassess the costs and flexibility associated with Amazon’s fulfillment network.
One major driver of this trend is rising logistics expenses. With fulfillment fees increasing over recent years and storage costs at Amazon warehouses fluctuating seasonally, some small and medium-sized sellers have found it increasingly difficult to maintain profitability within FBA. FBM, by contrast, gives sellers more direct control over their operations, allowing them to leverage independent warehouses, third-party logistics providers, or even in-house teams to manage inventory.
Recent improvements in non-Amazon logistics networks have also enhanced the appeal of FBM. Companies like ShipBob, Deliverr, and Flexport have invested heavily in technology that integrates directly with Amazon’s seller tools. This infrastructure enables FBM sellers to offer competitive delivery times that rival Amazon’s in-house network. Some have even managed to qualify for Seller Fulfilled Prime, a program that allows merchants to display the Prime badge while shipping from their own facilities.
Another factor fueling FBM’s resurgence is the growth of bulky or specialized product categories. Sellers offering oversized goods, fragile items, or products requiring custom packaging often find Amazon’s fulfillment network ill-suited to their needs. FBM provides the flexibility to manage unique handling requirements without incurring the steep surcharges associated with FBA. For categories such as furniture, sporting equipment, and home improvement tools, this flexibility can make the difference between sustainable margins and unsellable listings.
Global supply chain shifts have also played a role. As more sellers import directly from manufacturers in Asia and Europe, many are establishing their own distribution centers in the United States to reduce lead times and shipping risks. By combining FBM with regional warehouses, sellers can position themselves closer to their customer base while retaining more control over inventory flow.
Consumer expectations remain a key challenge for FBM sellers. Amazon shoppers have grown accustomed to rapid delivery and transparent tracking, features that FBA guarantees by default. To compete effectively, FBM merchants must adopt robust shipping practices and maintain high performance metrics. Late shipments or poor customer communication can quickly lead to penalties, negative reviews, or loss of visibility in search rankings.
Nevertheless, Amazon itself has taken steps to improve the viability of FBM. The company recently streamlined its performance dashboard for FBM sellers, making it easier to monitor order defect rates, on-time delivery, and customer satisfaction. It has also expanded integrations with third-party shipping carriers, enabling sellers to access discounted rates and automated label generation directly through Seller Central.
Industry analysts view these changes as part of Amazon’s effort to diversify its logistics ecosystem and reduce strain on its own warehouses during peak seasons. By encouraging more sellers to adopt FBM, the company can balance network demand while still maintaining a wide selection of goods for customers.
For sellers, the new opportunities presented by FBM are not without risks. Managing fulfillment independently requires upfront investment in infrastructure, staffing, and technology. Mistakes in order processing can erode customer trust, while scaling quickly without reliable logistics partners can create bottlenecks. Yet for many, the trade-offs are worthwhile, particularly in categories where FBA costs outweigh its benefits.
Some FBM sellers are also leveraging the model to build stronger brand identities. By maintaining control over packaging, inserts, and post-sale engagement, they can deliver personalized experiences that are difficult to achieve through FBA’s standardized processes. This approach not only fosters brand loyalty but also positions sellers to expand beyond Amazon into multi-channel retailing on platforms like eBay, Walmart Marketplace, and Shopify.
The competitive landscape for Amazon’s third-party sellers remains intense. FBA will likely continue to dominate for high-velocity, small-to-medium-sized products that benefit from Prime eligibility and centralized logistics. However, FBM’s resurgence highlights the growing diversity of seller strategies within Amazon’s ecosystem.
Looking ahead, Amazon’s balance between FBA and FBM could shape the future of its marketplace. As more sellers adopt hybrid strategies—using FBA for fast-moving inventory and FBM for bulky or specialized products—the platform may evolve into a more flexible environment for global merchants.
The renewed interest in FBM underscores a broader truth about Amazon’s marketplace: there is no one-size-fits-all solution for success. Sellers are increasingly tailoring their fulfillment strategies to align with product characteristics, cost structures, and customer expectations. For those willing to invest in operational excellence, FBM now represents more than just an alternative—it is an expanding set of opportunities within the world’s largest e-commerce marketplace.