2021 Fulfillment by Amazon Review: Pricing, Features, and Alternatives

Fulfillment by Amazon (FBA) is a 3PL company that offers multichannel order fulfillment services geared toward Amazon sales. It handles receiving, storage, pick & pack, shipping, customer service, refunds, and returns management for each order.

FBA is best for Amazon-based sellers, ecommerce retailers, and brick-and-mortar stores looking to venture into online selling. Its wide network of 185 warehouses creates efficient distribution for global sales, plus every FBA order is Prime eligible.

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When to Use FBA

According to Jungle Scout’s 2021 State of the Amazon Seller Report, 57% of Amazon sellers use FBA to fulfill all of their orders, while an additional 34% use FBA combined with other fulfillment methods.

Seeing as 91% of Amazon’s millions of active sellers use it, FBA certainly has its advantages. Despite its popularity, top sellers recommend thoroughly reading the company’s policies and fee guides, and using Amazon’s calculator tools to see just how profitable the business relationship would be before diving in.

In particular, we recommend FBA for:

• Amazon sellers: FBA provides post-sale servicing, automatic Prime designation, search engine optimization, and additional benefits for Amazon orders—making it the best choice for Amazon sellers (or multichannel sellers with a focus on Amazon sales).
• Small and lightweight products: FBA’s pricing structure favors manageable, easy-to-ship goods; it even offers a “Small and Light” program with discounted fulfillment fees for eligible products.
• Inventory with quick turnover: If your goods sell quickly, you’ll be able to avoid FBA’s expensive storage fees by maintaining healthy inventory levels through frequent stock replenishment. The company’s free inbound-shipment receiving makes this a practical approach.
• Developing small businesses: Most young businesses don’t have their own logistics in place—which is where FBA comes in. The cost of setting up an independent warehouse and fulfillment facility is significantly higher than outsourcing the process to FBA. The same goes for customer service capabilities, which can be pricey to staff or outsource.
• Brick-and-mortar stores planning to expand online: FBA offers brick-and-mortar stores a convenient means of expanding into the ecommerce space. Owners can continue to dedicate most of their time and resources to retail sales while FBA handles their online orders.

When to Use an Alternative

With its stringent requirements, costly fees, and associated risks, the service isn’t ideal for every business or product.

We don’t recommend FBA for:

• Multichannel sellers: FBA is compatible with multichannel sales, but not cost-effective unless Amazon is your primary marketplace. For merchants who focus their business on other selling platforms (such as their own website) but still want to reach Amazon customers, we recommend using FBM (Fulfillment by Merchant) through ShipBob.
• Well-established businesses: If your operation is developed to the point of having its own logistics and/or customer service team in place, FBA’s high costs likely won’t be worthwhile. The same applies if you’re able to mitigate the expenses involved in fulfilling your own orders.
• Oversized or heavy products: FBA’s pricing structure can be extremely costly for large or heavy goods. Other fulfillment partners, such as Red Stag, have a business model tailored to bulky products, so your shipping discounts will be deeper and your fulfillment fees reduced.
• Special-handling needs: Products that require certain types of special handling are a risky match for FBA’s services. Though the company has climate control in some of its warehouses, it’s not guaranteed that your temp-sensitive goods will be stored in the right environment. Additionally, FBA has a history with the FDA, and imposes restrictions on most FDA-regulated products. ShipBob is equipped with FDA-certified climate control and trained handling, making it the best fulfillment choice for food, beverages, cosmetics, medical equipment, and dietary supplements.

FBA Overview

FBA functions similarly to most third-party fulfillment companies, but with a few notable differences. Here’s an overview of the company’s services and features:

• Warehousing: FBA has a vast warehouse network of 110 US fulfillment centers, plus 75 more across the globe. To put this in perspective, many competing fulfillment companies have three or four total warehouses. When using FBA, inventory can be strategically distributed worldwide with virtually unlimited scalability.
• Order fulfillment: Orders are picked and packed with Amazon-branded packaging. No branded or otherwise custom packing elements can be used.
• Shipping: FBA primarily uses Amazon Logistics to ship orders, but multichannel orders can be sent out with other couriers for a 5% surcharge. All Amazon orders receive two-day or same-day Prime shipping.
• Multichannel capabilities: FBA can process orders from any sales channel, and its available software integrations are extensive.
• Post-sale servicing: Every customer interaction for your orders, from inquiries to returns to refunds, is handled by FBA. Its customer service representatives are available by phone, email, or live chat 24/7.
• Seller Support: Client support for FBA users is an extension of Amazon’s Seller Support team. There is no direct phone number or help line to contact Seller Support, so you must fill out a request form online for a representative to contact you.
• Amazon benefits: FBA users receive special advantages on Amazon’s platform. The site’s search engine algorithm prioritizes listings shipped by FBA, and FBA sellers are more likely to land the coveted “Buy Box” spot. Additionally, listings can feature the “Subscribe & Save” option to achieve consistent repeat customers.
• Auxiliary software: Due to its popularity, a host of programs and apps have been developed to assist FBA users and Amazon sellers in general. This software can advance your automation, reporting, account monitoring, sales forecasting, and inventory management capabilities—plus much more.
• Special services: FBA’s range of special services differs dramatically from most fulfillment providers. The company offers other unique services like refund management and customer service. Conversely, standard value-add services such as kitting, assembly, branded packaging, and reporting, aren’t available through FBA.

The Amazon FBA lifecycle

FBA uses Amazon’s vast infrastructure to tailor the fulfillment process in favor of expediency and customer experience. Here’s a deeper look into the steps of the process:

• Inbound Shipping & Receiving
• Storage
• Order Fulfillment
• Customer Service and Returns

If you’re new to Amazon and don’t yet have a seller account, you’ll need to make in order to use FBA.

Once registered, you’ll send your inventory to an Amazon fulfillment center on a shipping pallet or through a freight forwarding company directly from your supplier. Alternatively, a service like ShipBob can prep and send your inbound FBA shipments for you.

After it’s received, the merchandise can be further distributed across FBA’s warehouse network to optimize logistics.

When selling on Amazon using FBA, you can’t sell prohibited products including gift cards, alcoholic beverages (including non-alcoholic beer), and prescriptions. Using a logistics company like ShipBob will help you avoid sending Amazon any unauthorized shipments thanks to its FBA prep center and inspection service.

To store your products in an Amazon fulfillment center, you’ll pay an inventory storage fee. These fees depend on the size of your items and the time during which they’re stored. Amazon FBA storage fees start at 48 cents/cubic foot and go up to $3.63/cubic foot during the busier seasons such as Thanksgiving and Christmas.

Amazon stores inventory either in bulk or in individual accessible locations—primed for “picking” orders. Media products are stored on library-type shelving in vertical, spine out positions with loose stacking to avoid “shelf wear.” Specialty items, like food or high-value goods, may be placed in specific secure or climate-controlled areas of the fulfillment center as appropriate.

FBA has implemented a storage system often referred to as “inventory commingling,” which has created a new level of risk for sellers. The company attempts to streamline distribution by grouping identical products from different sellers in their warehouse facilities, which means that the goods another retailer bought and shipped to FBA could be sent to the customer who made a purchase on your listing.

This practice has led to counterfeit and faulty products making their way into the supply chain—harming the reputation and eligibility of sellers at no fault of their own. It’s a risk that should be assessed by anyone selling goods that aren’t unique to their store.

When a customer places an order on Amazon or another sales channel, FBA picks, packs, and ships the merchandise.

In addition to inventory storage fees, you’ll pay a fulfillment fee that covers all of these processes. These FBA fees start at $1.79/unit for small items (weighing 10 ounces or less) and go up to $200+ per unit for special, oversized products (like hot tubs and deep freezers). The charge includes labor, shipping costs, and packing materials—but it’s worth noting that custom/branded packing is not an option.

In alignment with the platform’s focus on speed and convenience, turnaround time for order fulfillment is very quick—largely thanks to the warehouses’ ample workforce.

Amazon customers get tracking information from the company and receive their orders within two business days, thanks to fast Prime shipping.

As orders come in and stock depletes, you’ll need to manage your inventory in accordance with Amazon’s Restock Report. This report provides recommendations on what to replenish, when to do so, and how much to ship.

Keeping proper inventory levels allows you to maximize sales by meeting demand without overstocking. Plus, it increases the chances of your goods being eligible for free same-day or next-day shipping, which is a major incentive to buy.

If post-sale servicing is needed (such as customer assistance, order returns, or refunds), Amazon handles the interaction. The company’s team of representatives is available to customers 24/7 through multiple communication channels.

Returns are handled, discarded, and/or restocked to your specifications, and the platform manages refund payments.

A map of Amazon’s US warehouse locations

FBA Pricing

FBA fees change periodically and fluctuate throughout the year, which is an important detail to factor in when determining profitability.

Here’s a look at the company’s pricing:

FBA’s pricing structure is complex, especially when compared to other fulfillment providers. To ensure profitability and avoid surprise charges, it’s crucial to understand order fulfillment costs and the company’s pricing model thoroughly.

Thankfully, Amazon’s Seller Central site features a host of resources to explain, calculate, and predict your FBA fees. Your costs will greatly depend on what you’re selling and which processes are involved. Here’s a look at the charges you can expect:

• Seller fees: Selling on Amazon comes at a cost, regardless of how you fulfill your orders. A professional seller account is $39.99 per month, or individual sellers can opt to pay 99 cents per item sold.
• Inbound shipping: You’ll cover the cost of shipping your merchandise to FBA, which varies depending on the shipment’s origin and attributes. Amazon has negotiated shipping discounts through its partnered carriers.
• Fulfillment fees: The FBA costs to pick an order from its storage location(s), pack it, ship it, and handle customer service and returns start at $1.79 per unit and go up to $200+ for special, oversized items. The total of this charge takes many factors into consideration, including:
  • Size
  • Weight
  • Quantity
  • Category
  • Sales channel
  • Shipping speed (for multichannel orders)

Multichannel sellers should note that FBA charges greater fulfillment fees to fulfill non-Amazon orders (we’ll go into those exact costs later on). It also tacks on an additional 40 cents or more for items in certain categories, such as apparel and dangerous goods, regardless of sales channel.

• Stock removal fee: FBA charges a removal fee of 50 cents to 60 cents per unit if you want to pull inventory from Amazon and/or dispose of unsold stock. It’s worth noting that many sellers have had issues with delayed stock removal, meaning their inventory has stayed in FBA’s warehouses for weeks or even months after they paid for and requested its removal. This problem incurs unexpected storage costs and reduced revenue for affected merchants.
• Labeling fee: Amazon has strict barcode label specifications for all stock received by FBA. If not labeled properly, you may be assessed a labeling fee of 20 cents per unit.
• FBA prep service and FBA unplanned prep service: FBA has stringent product packaging and prep guidelines. To avoid handling them yourself, you can opt to have Amazon pack and prep your products upon inbound receiving for a fee. If you don’t opt in to FBA’s prep service in advance, you’ll incur an unplanned prep fee for sending improperly prepared products. These charges vary by product type and attributes, and they range from $1.00-$2.20 per unit.
• Returns processing: The cost of a potential return is included in the fulfillment fee for most items, but goods in certain categories (such as apparel and accessories) don’t qualify for this service. For those particular products, FBA bills a return processing fee equal to the original fulfillment fee. If the returned products need repackaging for resale, Amazon charges an additional repackaging fee.
• Storage fees: The cost of storing your products at an FBA warehouse starts at 48 cents per cubic foot of space and goes up to $3.63 per cubic foot. FBA storage fees vary by season, increasing by 250% or more during the months of October–December. The assessed cost also depends on the size of the product, and whether it falls into the “dangerous goods” category.

• Long-term storage fees: For inventory held at an FBA warehouse longer than 181 days, sellers incur long-term storage fees. Between 181 and 365 days of storage, an additional 25 cents+ per cubic foot may be added to your fees. Beyond 365 days of storage, an additional 50 cents may be tacked on, or your costs will increase to $6.90 per cubic foot (whichever is greater).
• Additional tools: Though Amazon doesn’t provide these, downloadable tools such as Sellics, InventoryLab, and Jungle Scout exist to make selling with FBA easier (and more profitable). These apps boost your marketing, inventory management, and reporting capabilities by integrating with your Amazon account. Third-party tools such as these can incur a cost of up to $100+ per month, so it’s important to factor them in when calculating your outlay.

Examples of FBA Fulfillment Fees

Tablet case Size category: Small standard Dimensions: 13.8 x 9 x 0.7 inches	T-shirt Size category: Large standard  Dimensions: 14 x 10 x 0.76 inches	Baby cot Size category: Small oversize Dimensions: 24 x 7.5 x 6 inches	Television Size category: Large oversize Dimensions: 54 x 35 x 3.5 inches
2.88 oz shipping weight	12.32 oz shipping weight	7.9 lb shipping weight	41 lb shipping weight
$2.70 /unit	$4.65 /unit	$11.32 /unit	$76.57 /unit

Source: Amazon

These fees—combined with other Amazon charges—are likely more expensive than the cost of hiring another SFP (Seller-Fulfilled Prime)-eligible fulfillment provider such as Red Stag or ShipMonk. But, for many Amazon-focused sellers, the steep costs are worth it for the advantages that FBA provides. Plus, you’re paying for FBA’s end-to-end services—adding convenience on your part.

Additionally, buyers have an idea of what to expect when it comes to customer service because they’re dealing directly with Amazon. Outsourced, 24/7 customer service is a hefty investment when sought elsewhere, so it’s an important consideration when it comes to FBA costs. This especially applies to sellers dealing in goods with a naturally high return rate, like electronics or apparel.

Amazon FBA Storage Fees by Season

*Although smaller, standard products require more complex shelving, drawers, and bins for storage.

As you can see in the table above, Amazon FBA fees increase dramatically during the holiday season. This is something to watch closely if you use FBA, and it’s a major reason that volume sellers rarely use FBA as their sole storage option.

Instead, power sellers often store the bulk of their inventory themselves in cheap storage units or a company warehouse. Then, they periodically ship just enough stock to FBA to cover forecast sales.

Fulfillment by Amazon Key Features

Outsourcing fulfillment is a cost-effective way to facilitate and promote your business’ growth. It allows owners to redirect their time toward more profitable tasks (such as product development, sourcing, or marketing) and is far simpler than staffing your own warehouse operation.

FBA is a popular choice for Amazon and multichannel sellers to outsource fulfillment, but it’s certainly not the only contender. Thousands of other 3PL companies exist to help ecommerce businesses sell and grow—many of which are more functional and economical than FBA.

Beyond the standard features of the fulfillment, warehousing, and distribution processes, FBA provides a host of advantages that attract clients despite the competition. Here are some of the company’s key features:

Post-Sale Servicing

Prime Eligibility and Shipping

Competitive Amazon Advantages

FBA listings get a significant edge over non-FBA items in Amazon’s search engine algorithm. This leads to higher rankings for FBA products in Amazon’s product search results—which leads to more sales.

Another advantage is prioritization in Amazon’s Buy Box, which is the “Add to Cart” button on most product listings. When viewing a product sold by multiple sellers, hitting this button will add one chosen listing to the customer’s cart.

The platform selects which listing gets to “own the Buy Box” using an algorithm that considers price, shipping speed, seller metrics, and fulfillment method. The most heavily weighted factor in determining Buy Box ownership? Use of FBA.

The Buy Box (A) is the spot every Amazon seller wants their listing to occupy. The top listing is what automatically sells when the “Add to Cart” button is clicked. FBA Prime-eligible products take preference if there’s a price tie, and can even win the Buy Box over lower-priced non-FBA products (B).

Multi-Channel Fulfillment

If you use sales channels other than Amazon (such as your own Shopify store and/or other online marketplaces like eBay) you can use FBA to fill those orders too. Amazon calls this service Multi-Channel Fulfillment, or MCF.

For multichannel FBA users, inventory storage fees remain the same, but MCF fulfillment fees are higher. MCF orders don’t incur an added Amazon seller fee.

With most MCF orders, you can select between three different shipping methods: Standard, Expedited Two-Day, and Priority One-Day (products within certain size categories have more restricted options). This is helpful if you offer a range of shipping options on your own ecommerce store or website.

Here’s a look at what MCF orders cost to fulfill through FBA:

Examples of FBA Multichannel Fulfillment Fees

Tablet case Size category: Small standard Dimensions: 13.8 x 9 x 0.7 inches	T-shirt Size category: Large standard  Dimensions: 14 x 10 x 0.76 inches	Baby cot Size category: Small oversize Dimensions: 24 x 7.5 x 6 inches	Television Size category: Large oversize Dimensions: 54 x 35 x 3.5 inches
2.88 oz shipping weight	12.32 oz shipping weight	7.9 lb shipping weight	41 lb shipping weight
$5.29	$6.20	$13.80	$86.15
$6.26	$7.69	$14.83	N/A
$12.80	$13.80	$23.10	N/A

Source: Amazon

If an MCF order contains multiple units, the cost per unit decreases. So the T-shirt that costs $5.95 to fulfill on its own would cost $4.20 to fulfill in an order along with one other item, or $3.55 to fulfill in a three-item order.

Like with Amazon orders, the MCF fee accounts for the entire process of picking items from inventory, packing, and shipping. But, Amazon does not handle post-sales servicing for MCF orders. This means that you’ll need to field all multichannel customer inquiries, returns, and refunds yourself (or hire employees to do so).

If you compare Amazon’s MCF fees to the shipping rates you’d pay to fulfill orders yourself, you’ll likely find MCF is a pretty good deal. While this is the case, multichannel sellers who don’t focus mainly on Amazon sales are better off partnering with a cheaper 3PL, such as ShipBob.

Small and Light

Subscribe & Save

The Subscribe & Save feature on Amazon gives customers a discount and free shipping when they sign up for a product subscription—which is a recurring, automated purchase. This gives customers a convenient, regular delivery at their chosen interval and helps sellers obtain repeat customers. It’s one of the best ways to have consistent revenue with Amazon.

The Subscribe & Save buying option can be offered to customers on your FBA listings as a convenient scheduled purchase.

It doesn’t cost anything for sellers to offer the Subscribe & Save feature. However, merchants will need to meet minimum requirements (such as a feedback rating of 4.7 or higher) and maintain good standing with the platform. The feature is only available to sellers who have been using FBA for three months or more.

Visit Fulfillment by Amazon

FBA Integrations

FBA’s proprietary turnkey integrations are pretty limited, but thanks to its open APIs and enormous popularity, thousands of FBA integrations are readily available through third-party developers.

Plus, FBA directly integrates with certain ecommerce integration service providers such as WebBee. This makes it possible to quickly and easily integrate with any of your necessary tools or platforms—though it may come at an additional cost.

Other companies, such as Zapier have created numerous plug-and-play integrations to connect FBA and Amazon Seller Central to a host of other apps and programs you may use.

If you’re unable to find your desired integration pre-made, FBA’s developer friendly APIs make it possible to have a connection custom made fairly easily. But, unlike other fulfillment partners such as ShipBob or Red Stag, FBA does not offer integration development as a value-add service.

Here’s a list of FBA’s current direct integrations:

• Ecommerce platforms and marketplaces: WooCommerce, VTEX, 3dcart, Shopify, WebBee, Bytestand
• Freight and shipping solutions: AfterShip
• Operations, inventory, and order management: ChannelAdvisor, Listing Mirror, Orderhive, Zentail, Skubana, Sellbrite, Sellercloud

What FBA Users Think

There aren’t many FBA user reviews or ratings available online, and much of the scrutiny you will find is of the entire Amazon marketplace platform (rather than Fulfillment by Amazon itself).

Amazon Services Seller Forums is a great place to get insight into what it’s like to use FBA as an online merchant. Since it’s mainly a resource for solutions, assistance, and discourse rather than ratings and reviews, the posts are not reflective of the benefits of FBA. But the questions and discussion posed by FBA users are highly valuable.

In reviews, forum posts, and comments alike, users report complications due to FBA’s labeling protocol, lost items and shipments, and difficulty with Amazon’s Seller Support. Much of this likely ties in to FBA’s error rate, which—unlike nearly every other fulfillment provider—is undisclosed.

The YouTube personality “Darren – FBA Elite” is highly vocal about his personal experiences with FBA and Amazon. In one of his videos, he describes 10 loss-making issues he ran into while selling on the platform though FBA.

A screenshot of Darren – FBA Elite’s YouTube video entitled “What They DON’T Tell You! | Amazon FBA Review 2020”

Though most of the hurdles Darren describes relate to being a seller on Amazon rather than outsourcing fulfillment to FBA, these issues are important to acknowledge. He reports receiving negative reviews from customers who were sent dirty, used merchandise that had been previously returned—despite his actions to prevent FBA from reselling returned items from his inventory.

Darren describes this and other instances of ineffective client support from the company, and ultimately advises FBA users to avoid dealing with Seller Support unless absolutely necessary.

He also criticizes the fulfillment provider for remeasuring his products and increasing his fulfillment fees, which is a common theme in FBA reviews across the board. Darren and other savvy users recommend using specialized software such as Helium 10 to monitor your FBA account—which says a lot about the company’s lack of transparency.

Positive user reviews of FBA mention benefiting from the company’s fast shipping and outsourced customer service. Many describe the relationship as “simple” and “hassle-free,” but even 5-star reviews mention the high cost of the convenience that FBA provides.

• G2: 4.5-star rating from 12 reviews
• FulfillmentCompanies.net FBA review

Alternatives to FBA

Using FBA is one of the three methods that Amazon sellers can choose from to fulfill their orders. The other options are:

• Fulfillment by Merchant (FBM): The seller is responsible for all aspects of order fulfillment, plus handling returns and providing customer service. There are no strict packaging or delivery speed requirements, but not all FBM orders are Prime-eligible.
• Seller-Fulfilled Prime (SFP): The seller is responsible for the entire fulfillment and post-sale process, but each order is Prime-eligible. Fulfillment can be performed in-house or outsourced to a 3PL, but orders must ship on the same day and have guaranteed two day delivery.

Sellers who use either of the two methods above to fulfill their Amazon orders are considered part of the platform’s MFN (Merchant Fulfilled Network).

Competing in an online marketplace like Amazon can have costs and complications that some businesses aren’t ready for—particularly when it comes to FBA. If your business isn’t in the right stage to use FBA there are other ways to get your products to Amazon customers.

Alternatives to Fulfillment by Amazon include:

Ship to Amazon Customers Yourself

As part of Amazon’s Merchant Fulfilled Network, you can ship products to Amazon customers without paying to store your products at a warehouse. Instead, you’ll store them at your own home, store, or facility until they’re ready to go out to a customer.

With this method you’ll still pay a monthly selling fee (plus a per-item selling fee) for the ability to sell on the Amazon marketplace. You’ll also have to manage your own inventory and all fulfillment processes, or hire a staff to do so for you. In-house fulfillment is ideal for sellers with lower profit margins who need to control costs.

Ship to Amazon Customers Using Third-Party Fulfillment

Amazon fulfillment can also be outsourced to third-party providers other than FBA. Many competing companies offer services, specialties, and other benefits that FBA can’t provide.

For multichannel sellers who only receive a minority of their sales from Amazon, this option is usually the most economical choice. The same goes for merchants dealing in goods that require special handling.

Here’s a look at some of the top fulfillment options:

Bottom Line

FBA isn’t just about fulfillment. It’s about leveraging Amazon’s brand and the Prime loyalty program to boost your exposure and sales on the Amazon marketplace.

FBA offers decent fulfillment rates and seamless order processing for Amazon sales, but it can be tricky to use. Sellers must keep a diligent eye on their accumulating fees, inventory preparations, and standing with the platform. Additionally, it opens the door for fraud such as counterfeit merchandise and listing hijacking, so sellers must also be wary of their reputation with customers.

Ultimately, for most merchants who make roughly 80% or more of their sales on Amazon, outsourcing fulfillment through FBA is likely the best option.

Many factors play into your profitability with FBA—especially the size and weight of your goods. Be sure to calculate your anticipated FBA costs and consider other fulfillment providers for special-handling needs such as Red Stag Fulfillment.

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