Amazon sellers today face unprecedented challenges - pandemic disruptions, inventory restrictions, and supply chain crises have created turbulent waters for profitability. As FBA (Fulfillment by Amazon) no longer remains the only lifeline, many sellers are exploring alternatives like FBM (Fulfilled by Merchant) and SFP (Seller Fulfilled Prime) as potential solutions. This analysis examines the pros and cons of these three primary fulfillment methods to help sellers identify the best approach for their business.
FBM: Complete Control vs. Operational Burden
Fulfilled by Merchant (FBM) means sellers handle all aspects of order fulfillment - storage, picking, packing, shipping, and customer service - either through their own facilities or third-party logistics providers (3PLs). This model offers complete control over the fulfillment process, freeing sellers from Amazon's warehouse constraints and policy changes.
However, this autonomy comes with significant responsibilities. FBM sellers must manage customer service, returns, and all logistical operations. While FBA's inventory restrictions have renewed interest in FBM, this approach has notable disadvantages: products lose the coveted Prime badge that drives traffic and conversions, making it harder to win the Buy Box.
That said, the Buy Box isn't exclusive to Prime products. FBM sellers can compete by matching or exceeding Amazon's Prime shipping speeds, or by enrolling in the Seller Fulfilled Prime program.
SFP: The Prime Advantage with Stringent Requirements
Seller Fulfilled Prime (SFP) allows merchants to fulfill orders from their own warehouses or 3PLs while displaying the Prime badge. Amazon reports Prime members spend twice as much as non-Prime customers, making this hybrid approach particularly attractive.
However, SFP comes with rigorous requirements that deter many sellers. The program demands:
- 99% on-time delivery rate
- Order cancellation rate below 0.5%
- Nationwide shipping coverage with Saturday delivery
Sellers must complete a 5-90 day trial period, fulfilling at least 200 Prime orders with 99% on-time delivery, using Amazon-approved shipping services for 95% of orders, while maintaining under 1% cancellation rate. During this trial, products don't display the Prime badge.
Failure to meet SFP standards typically won't suspend your entire Amazon account - you simply lose SFP privileges but can continue selling. Switching to FBA would restore the Prime badge.
FBM Advantages and Disadvantages: The Control vs. Efficiency Trade-off
The following table compares FBM's key benefits and drawbacks, most of which also apply to Seller Fulfilled Prime:
| Advantages | Disadvantages |
|---|---|
| Complete control over fulfillment process | No Prime badge (unless enrolled in SFP) |
| No FBA storage limits or fees | Harder to win Buy Box without Prime status |
| Better for large, heavy, or slow-moving items | Must handle all customer service and returns |
| Ideal for customized or fragile products | Requires significant logistics infrastructure |
| No long-term storage fees | Must maintain high performance metrics |
For sellers facing FBA restrictions or handling specialized products, FBM and SFP present viable alternatives - but only for those prepared to invest in the necessary logistics capabilities and maintain Amazon's demanding performance standards.