FBA or FBM: getting inventory to the customer

Fulfilment is where an operational decision quietly becomes a financial one. Send the wrong product into Amazon's warehouses and you pay storage on something that will not move. Ship it yourself without the systems for it and you fail the delivery metrics that keep your account healthy. The choice is per product, not per business.

Three ways to deliver

• Fulfilment by Amazon. You send inventory to Amazon; they store, pick, pack, ship and handle most customer service and returns. Prime eligibility comes with it. You pay per unit and by volume stored, and you give up control of how your product is handled.
• Merchant fulfilment. You hold the stock and ship each order yourself. You keep control and margin, and you take on delivery performance, returns handling and customer messaging.
• Seller Fulfilled Prime. You ship yourself but display the Prime badge. Amazon requires a Professional selling account, a domestic U.S. address as the default shipping address, and passing prequalification performance requirements before a 30-day trial, which you must complete while meeting all performance requirements to become enrolled.¹ It is the demanding option, and it exists for sellers who already run real logistics.

Prep and labelling, so the first shipment is not rejected

Amazon's published guidance sets out what a unit must look like when it arrives.²

• Bagged products go in transparent, completely sealed bags that do not extend more than three inches beyond the product's dimensions.
• A suffocation warning is required on any bag with an opening larger than 5 inches.
• The FNSKU label — Amazon's own identifier for your unit — should be 1 to 2 inches tall and 2 to 3 inches wide, printed in black ink on non-reflective adhesive paper, ideally on a laser printer at 300 DPI, and must carry the scannable barcode, the FNSKU, the product title and the condition.
• Every other barcode on the outside must be removed, covered with opaque tape, or blacked out so it cannot be scanned. Two scannable barcodes on one box is the single most common receiving problem.

Capacity limits and the index behind them

You cannot send Amazon unlimited stock. Capacity limits are announced in the third full week of each month through the Capacity Monitor in Seller Central and by email, giving one confirmed month plus estimates for the following two. Limits are influenced by the Inventory Performance Index along with sales forecasts for your products, shipment lead time and warehouse capacity. Sellers can request additional capacity by naming a reservation fee; requests are granted starting with the highest fee per cubic foot, and performance credits are designed to offset up to 100% of that fee as long as the products sell through.³

The practical reading: efficient sellers get room, and inefficient ones get squeezed exactly when they want to grow. Sending in too much of a slow product costs you twice — storage now, and capacity later.

Storage is a clock

Amazon charges monthly storage by the space your inventory occupies, and an aged inventory surcharge on units stored more than 181 days, alongside returns processing in some categories and removal or disposal fees when you take stock back.⁴ None of these appear in the margin you calculated in lesson 1 unless you put them there.

Six months is the number to hold in your head. Buy quantities you can sell in less than that, and the surcharge never appears. Buy a year's worth to get a better unit price and you have traded a discount for a recurring charge and a capacity problem.

When shipping it yourself is the better answer

• Heavy or bulky products, where fulfilment fees consume the margin.
• Slow sellers that would age in storage.
• High-value or fragile goods you would rather pack yourself.
• Products you already ship from an existing warehouse or a prep centre that can post as well as prepare.
• During a capacity squeeze, when merchant fulfilment keeps a listing alive while your limit resets.

The cost of this route is metrics. Late shipments, cancellations and missing tracking are measured, and they are the subject of lesson 12. If you cannot dispatch reliably on the days you promised, Amazon's warehouse is cheaper than it looks.

Mistakes that cost a shipment

• Leaving the manufacturer's barcode visible next to your FNSKU label.
• Bags without a suffocation warning where the opening is larger than five inches.
• Measuring the product rather than the packed unit. Fees follow the packed dimensions.
• Sending six months of stock to get a unit price discount. Storage, ageing and capacity all bite.
• Ignoring the capacity announcement in the third week of the month and planning a restock you cannot send.
• Choosing merchant fulfilment without a dispatch routine. The metrics are unforgiving and automatic.
• Printing labels on an inkjet. Smudged barcodes are unscannable barcodes.

Next

Lesson 11 is the listing and the launch: what a product page has to do, keywords, images, the Buy Box, first sales, and the review rules that carry federal penalties.