Leveraging Amazon FBA for Your Online Sales Success

What you’ll learn:

• How Fulfillment by Amazon (FBA) works and what it takes to get started

• The key costs to consider, including fulfillment, storage, and long-term inventory fees

• The biggest pros and cons of using FBA to scale your ecommerce business

• How FBA compares to Seller-Fulfilled Prime and when each model makes sense

• Tips and tools to optimize your FBA strategy and boost profitability

For ecommerce sellers looking to expand their reach and streamline operations, Fulfillment by Amazon (FBA) remains one of the most powerful logistics tools available.

As of 2025, more than 80% of active Amazon marketplace sellers rely on FBA to store, pack, and ship their products. Even more compelling, nearly 60% of sellers who use FBA reach profitability within their first year — a clear indicator of how effective the program can be when applied strategically.

That said, Amazon FBA isn’t a one-size-fits-all solution. While it offers significant advantages like Prime eligibility, simplified logistics, and built-in customer support, it also brings added fees, limited branding control, and the need for ongoing inventory oversight.

In this guide, we’ll explore how Amazon FBA works, what it really costs, and how to decide if it’s the right fit for your business. We’ll also share tips for optimizing your FBA strategy and compare it to other fulfillment options available through Amazon.

How does Amazon FBA work?

Fulfillment by Amazon (FBA) is a service that lets sellers outsource key parts of their ecommerce operations to Amazon, including storage, shipping, customer service, and returns.

To get started with FBA, sellers go through the following steps:

1. Set up your FBA account: After creating a seller account, log in to Seller Central and enable FBA for your listings. You can also review cost estimates for each product before enrolling.

2. List your products: Add your items to the Amazon catalog and mark them as FBA inventory so Amazon knows to handle fulfillment for those SKUs.

3. Prepare your inventory: Make sure your products are packaged and labeled according to Amazon’s guidelines for safety, security, and compliance before shipping.

4. Ship to Amazon: Create a shipping plan, label your boxes, and send your inventory to Amazon’s fulfillment centers. Amazon will take over from there, storing your products and fulfilling orders as they come in.

From that point on, Amazon manages warehousing, delivery, and customer support, while you stay focused on growing your business and keeping products in stock.

What does Amazon FBA cost?

Selling through Amazon FBA involves several layers of cost, some standard for all sellers, others based on your product type, inventory behavior, and fulfillment method.

Amazon offers two selling plans:

• Individual plan: No monthly subscription fee, but you pay $0.99 per item sold. Best for sellers with fewer than 40 monthly orders.

• Professional plan: $39.99 per month, with no per-item fee. Recommended for growing sellers who want access to advanced tools, APIs, advertising, and bulk listing features.

In addition to your selling plan, FBA adds fees for fulfillment, storage, and inventory management. These include per-unit fulfillment fees, monthly storage fees, and additional charges for aged or non-compliant inventory.

We’ll break those down in the following sections, including how product type (like hazardous goods), inventory health, and peak seasonality can impact your overall FBA costs.

Dangerous vs. non-dangerous goods.

Before using FBA, you’ll need to determine whether your products are classified as dangerous goods, also known as hazmat.

Dangerous goods include items that contain flammable, pressurized, corrosive, or otherwise hazardous components. Common examples are:

• Lithium battery-powered electronics

• Aerosol sprays

• Magnetic materials

• Certain cosmetics or household chemicals

Explosives and weapons are strictly prohibited.

Amazon requires sellers to submit a safety data sheet (SDS) or exemption sheet during product review. If your item is classified as hazmat, it will be routed through the FBA Dangerous Goods program, and you’ll face higher fulfillment and storage fees due to added safety handling and specialized storage requirements.

By contrast, non-dangerous goods can be stored and shipped through standard FBA processes at lower rates.

Knowing your product’s classification upfront helps you avoid delays and price your listings more accurately.

Fulfillment fees.

Fulfillment fees cover everything Amazon does to get your product to the customer, from picking and packing to shipping, customer service, and processing returns. These fees vary based on the size, weight, and category of your product.

The two main categories Amazon uses to calculate FBA fulfillment fees are:

• Non-apparel: Standard-size products start at a few dollars per unit for lightweight items, with costs rising for heavier or oversized goods. Bulky or special-size items can incur significantly higher fees.

• Apparel: Clothing items typically cost slightly more to fulfill than non-apparel of the same size and weight. This is due to extra handling requirements like folding, tagging, and packaging.

Amazon calculates shipping weight based on whichever is greater, actual weight or dimensional weight. Because of this, sellers should carefully review product packaging and size classifications in Seller Central to avoid unexpected fee increases.

Always refer to Amazon’s FBA Revenue Calculator to estimate fees for your specific products before listing them.

Inventory storage fees.

Amazon charges monthly fees based on the amount of space your inventory occupies in its fulfillment centers. The fee is calculated using the daily average storage volume (in cubic feet) of your products. Fees depend on size category (standard vs. oversize) and season (off‑peak vs. peak).

Here are the current US rate ranges:

• For standard‑size items:

  • January through September (off‑peak): $0.78 per cubic foot per month is the base monthly storage fee

  • October through December (peak): $2.40 per cubic foot per month is the base monthly storage fee

• For oversized items:

  • Off‐peak months: $0.56 per cubic foot per month is the base monthly storage fee

  • Peak season: $1.40 is the base monthly storage fee

Long-term storage fees.

Amazon charges additional fees for inventory that sits in fulfillment centers for too long. These are now referred to as aged inventory surcharges, and they apply monthly once your products have been stored for over 181 days.

These fees increase the longer your inventory remains unsold, especially after 271 and 366 days, which can significantly impact your profitability.

To avoid these charges, sellers should regularly monitor inventory aging reports in Seller Central, create removal orders for stagnant stock, or use promotions to drive turnover before the surcharge kicks in.

Inventory report.

The FBA inventory report is a data tool within Amazon Seller Central that helps sellers track and manage FBA inventory performance.

This report provides insights into:

• Current inventory levels

• Sell-through rates

• Excess and aged inventory

• Competitive pricing ranges

• Storage volume and associated costs

It also ties into your Inventory Performance Index (IPI) — Amazon’s internal score that reflects how well you manage stock levels, avoid overstock, and reduce stranded or unsellable inventory.

Monitoring this report regularly can help sellers:

• Avoid long-term storage fees

• Improve IPI scores

• Keep inventory balanced and optimized

• Identify opportunities to liquidate or promote slow-moving products

Sellers with low IPI scores may face storage limits or additional fees, so keeping tabs on your inventory health is key to maintaining efficient FBA operations.

Amazon FBA pros

While this isn’t a complete list, here are some of the biggest things that stand out about the Amazon FBA program:

Logistics support and scalability.

Fulfillment by Amazon (FBA) gives sellers instant access to Amazon’s world-class logistics network, removing the need to manage warehousing, packing, or shipping in-house.

Instead of storing inventory in your home or managing a third-party warehouse, FBA handles:

• Picking and packing

• Fast, reliable shipping

• Customer service and returns

This allows sellers to scale quickly without investing in their own infrastructure. Whether you're fulfilling 10 orders or 10,000, Amazon's system adapts with you, making it easier to focus on product sourcing, marketing, and growth.

For a predictable fee, you offload the most time-consuming parts of ecommerce and gain the operational support of one of the world’s largest logistics engines.

Get all the benefits of Amazon Prime.

FBA products are automatically eligible for Amazon Prime, giving sellers access to millions of loyal Prime members.

This means your listings:

• Display the Prime badge

• Qualify for free, two-day shipping

• Appear more prominently in search results and filters

You don’t have to manage premium shipping options or pass extra costs onto customers. It’s all included in your FBA fulfillment fees, making it easier to compete on speed, convenience, and trust.

Win the Buy Box.

The Buy Box is the area on a product detail page where customers can quickly click “Add to Cart” or “Buy Now.” Winning that spot can significantly impact your sales, especially in competitive product categories.

Sellers who use FBA are often prioritized for Buy Box placement because Amazon considers fulfillment speed, delivery reliability, and customer service, all of which are built into the FBA program.

While there’s no guaranteed formula, using FBA improves your chances by meeting Amazon’s performance standards more consistently.

Shipping rates discounts.

FBA gives sellers access to Amazon’s deeply negotiated shipping rates, which are often more cost-effective than handling fulfillment on your own.

While you do pay fulfillment fees, the built-in shipping discounts can offset those costs. In many cases, using FBA is more affordable than managing packaging, carrier relationships, and logistics internally.

These shipping savings, combined with faster delivery and Prime eligibility, can make FBA a smart move for scaling efficiently.

24/7 customer support.

Amazon offers its own, 24/7 customer service for FBA sellers. You can also use their FBA platform to care for your customer service needs, routing all of your services through one platform for easy management.

More storage space.

Without FBA, how much inventory could you realistically store? Do you have a warehouse or means to rent one? Are you capable of moving and managing inventory on that scale?

This is where the Fulfillment by Amazon program wins. For a cost, Amazon sellers have access to unlimited storage space because Amazon has warehouses all over the country that can hold a lot of goods.

Multi-channel fulfillment.

Not only does FBA allow you to sell to targeted customers through the Amazon platform, but you can gain access to new multi-channel fulfillment solutions.

Amazon Multi-Channel Fulfillment (MCF) allows you to sell your FBA products on various platforms and channels, such as BigCommerce and eBay, while still having Amazon fulfill them.

Amazon FBA cons

Because no two people are the same, it’s important to look at the potential reasons FBA services might not be the right solution for your needs. Here are some of the factors to consider:

It can be costly.

While FBA offers convenience and scale, it also comes with fees that can add up quickly, especially for low-priced or slow-moving products.

Fulfillment and storage costs are based on size, weight, and inventory turnover, which means smaller-margin items may not be profitable once FBA fees are applied.

That’s why it’s important to use Amazon’s FBA Revenue Calculator before enrolling a product. It helps you forecast costs and determine if FBA is the right fit for your pricing strategy.

Requires continual inventory management.

Amazon has a list of requirements for products coming into the warehouse to be fulfilled through FBA.

You will have to ensure that your products are prepared accordingly before sending them off to Amazon, including how they are packaged, providing proper labeling and shipping following the FBA inventory warehousing guidelines.

Limited branding.

Because Amazon packs and ships your products from its fulfillment centers, you will likely have limited branding opportunities.

If you are using Amazon’s fulfillment center, the shipping boxes they use will invariably be covered in their logo and branding. Even if you have control of your product packaging on the inside, the first thing customers will see is that the package is from Amazon.

Commingling.

Amazon commingles its products with the same manufacturer ID from various third-party merchants. In essence, they are pooling together like products.

Commingling is designed to increase fulfillment efficiency by Amazon. While this is a benefit for Amazon, for merchants, this can lead to their products being mixed in with low-quality items from less professional sellers.

More returns.

In many cases, there have been sellers who see an increase in the number of returns or their frequency. This is due, in part, to Amazon’s open return policy.

However, Amazon now handles the processing. While they used to have returns shipped back to them, and you would have to arrange to have them then forwarded to you, Amazon now allows returns to go directly back to your facility.

Should you use Amazon FBA?

After reviewing all the information, you will need to decide whether or not Amazon FBA is a good idea for your business.

To be clear, Amazon is a competitive marketplace, no matter what product or service you plan to sell. However, the opportunities present are hard to pass up for forward-thinking entrepreneurs, especially those just getting started.

or small or ecommerce businesses, utilizing an already established fulfillment program and infrastructure as well as resources like Amazon Seller Central can make the most challenging half of the process worth it in the end.

Amazon FBA vs. Seller-Fulfilled Prime

If you want access to Prime customers without using FBA, Seller-Fulfilled Prime (SFP) offers an alternative. With SFP, you fulfill orders from your own facility while still displaying the Prime badge, but you must meet Amazon’s strict delivery and performance standards.

Here’s how they compare:

• Fulfillment & shipping costs: FBA charges fulfillment and storage fees, but leverages Amazon’s bulk shipping discounts. With SFP, you cover 100% of the shipping cost, which can eat into margins, especially for fast or nationwide delivery.

• Inventory control: FBA handles storage and logistics for you. SFP requires you to store, track, and fulfill inventory yourself, adding complexity and overhead.

• Operational effort: SFP puts full responsibility for logistics on the seller. This can be challenging for small or early-stage brands without the infrastructure to support high fulfillment standards.

SFP can be a good fit if you have an efficient in-house fulfillment system or sell products that are expensive to store through FBA (like large or low-margin items). But for most sellers, especially those scaling or just starting out, FBA offers a faster, lower-lift path to Prime eligibility.

How to maximize FBA sales

There is plenty of valuable insight to be gleaned to help you maximize your FBA sales from the start. If you want to increase your profits and streamline your growth using this service, here are a few tips and tactics to keep in mind:

Use online analytics tools.

Use online analytics tools to research the most profitable and popular items available on Amazon and determine which are the best product categories to sell in.

The bestsellers are often at the top for a reason. See what they're doing and take notes.

Be smart about your product selection.

Think about sales rank but also about what you get in exchange.

High-ranking Amazon products are competitive but will sell quickly and keep inventory moving. Low-ranking products could cause stagnant inventory and long-term fees. However, they may also allow you to become a leading seller since there’s less competition.

Bundle items when you can.

One of the most challenging parts of Amazon selling is competing with dozens of near-identical listings that may have a handful of reviews or a few dollars in price difference, but are otherwise indiscernible.

Merchants can stand out by creating bundled Amazon listings that draw people’s attention and offer more for their money.

Build your brand.

Merchants must take the time to create a brand step-by-step and put it in a position that creates success and reaches their target audience. 

It’s not just about being in the buy box. It’s about ensuring that you are selling high-quality products and sourcing them from a reputable manufacturer or distributor.

It would be best if you also got good reviews to ensure your metrics qualify you for the buy box and maximize your sales opportunities.

Respond promptly to customers.

One of the most significant factors in choosing a seller on Amazon is how well they respond and engage when provoked.

If a user has a question, answer it promptly and politely to let everyone know that you’re there when they need you.

Using Amazon FBA the right way

As with all things, Fulfillment by Amazon only works if you integrate it correctly and use it properly. To accomplish this, there are some best practices and overall themes that you need to follow, including:

Start small.

You don’t have to sell everything, and you shouldn’t.

Remember, Amazon FBA costs money for storage and warehousing. Until you know what will sell, consider trying a few items and working your way into different products as time goes on.

Choose a well-cultivated selection of items and list them through FBA so that you have a slightly easier time learning the best practices when just starting.

Be smart when choosing your products.

As mentioned above, you must be very careful in product selection. Just because you think something would sell doesn’t mean that it will.

The market is competitive on Amazon, and you need to choose the most profitable products to avoid stagnant inventory, allowing your products to stand out even if they’re not the top-selling items.

The final word

Fulfillment by Amazon is a powerful tool, but like any tool, its value depends on how you use it.

FBA can help you scale faster, reach Prime members, and streamline your logistics, all without building a fulfillment operation from scratch. But it also comes with costs, limitations, and responsibilities that sellers must plan for carefully.

For many ecommerce businesses, especially those just starting out or expanding to new channels, FBA offers the speed, trust, and support to compete at a higher level. Just make sure to run the numbers, understand your margins, and use Amazon’s data tools to stay in control of your inventory and performance.

When used strategically, Amazon FBA isn’t just a fulfillment option — it’s a growth engine.