Amazon FBM: you ship the orders, and Amazon keeps score
Amazon FBM, Fulfilled by Merchant, means you store, pack and ship your own Amazon orders instead of using FBA. This guide explains how it works, the performance targets Amazon enforces, the shipping tools and costs, Seller Fulfilled Prime, and when FBM is the better choice.
Key takeaways
- With FBM you store inventory, ship orders and handle customer service yourself, from your own or a partner's location.
- Amazon enforces targets on seller fulfilled orders: order defect rate under 1%, cancellation rate under 2.5%, late shipment rate under 4%, valid tracking over 95%.
- Amazon Buy Shipping offers pre-negotiated label rates and protection against delivery claims when you ship on time.
- FBM avoids FBA fulfillment and storage fees, but you carry shipping, packaging, storage and labor costs yourself.
- Seller Fulfilled Prime adds the Prime badge to FBM offers after a 30 day trial, with stricter targets such as 93.5% on time delivery.
What Amazon FBM is
Amazon FBM stands for Fulfilled by Merchant. You list products in the Amazon store, and when a customer orders, you pick, pack and ship the order yourself, from your own warehouse, a home, or a partner's location. Amazon calls FBM a suite of solutions for sellers who fulfill orders directly: shipping settings, label buying, inventory tools and programs such as Seller Fulfilled Prime.
The alternative is Fulfillment by Amazon, where you send stock to Amazon's fulfillment centers and Amazon ships, handles customer service and processes returns. Amazon lets you use either for your whole catalog, or FBM for some products and FBA for others.
The trade is control for responsibility. With FBM you control packaging, stock and the post-order experience, and Amazon measures every order you ship against its targets for defects, cancellations, late shipments and tracking.
- FBM
- Fulfilled by MerchantYou store, pack and ship your own Amazon orders
- Also called
- Merchant fulfilledOr seller fulfilled; the network is the MFN
- Tools
- Buy Shipping, VeeqoPlus shipping settings and Multi-Location Inventory
- Prime
- Through Seller Fulfilled PrimeAfter meeting performance requirements
How FBM works, from order to delivery
- A customer orders; the order appears in Manage Orders in Seller Central.
- You pick and pack the item within the handling time you set.
- You buy a label, through Amazon Buy Shipping or your own carrier account.
- You confirm shipment with a valid tracking number before the expected ship date.
- The carrier delivers by the promised date.
- You answer buyer messages and process returns and refunds.
Amazon says to confirm shipment within your stated handling time. If you buy the label through Buy Shipping, the order is confirmed and tracked automatically. For returns, Amazon automatically enrolls US sellers in its prepaid returns label program and authorizes requests that meet its policy; requests outside the policy come to you, and you need to respond to all return requests within 24 hours.
If you cannot ship for a stretch, Amazon seller vacation mode sets your self-fulfilled listings to Inactive rather than letting orders go late.
How to set up FBM in Seller Central
Amazon recommends a Professional selling account for FBM, at $39.99 a month plus selling fees, so you can use the full range of services. Then list products, either by matching an existing listing or creating a new detail page, and configure the settings that decide what delivery date customers see.
| Setting | What it controls | Amazon's suggestion |
|---|---|---|
| Handling time | Days between the order and handing the package to the carrier | Match your real operations, or enable Automated Handling Time |
| Transit time | Days the carrier needs | Set in shipping templates |
| Capacity limit | How many orders you can ship a day | Keep it to what you can reliably ship |
| Shipping Settings Automation | Delivery dates from your location, the customer's and past deliveries | Shorter, more exact dates |
| Return settings | Your return address and policies | Match or exceed Amazon's policy |
| Multi-Location Inventory | Stock synced across several locations | For sellers shipping from more than one place |
Amazon reports that sellers who used Shipping Settings Automation sold 10% more units on average, based on its study of US third party sellers in the first half of 2022. Shorter, more exact delivery dates make an offer more attractive; they also have to be kept, since late deliveries count against you.
FBM performance targets Amazon enforces
Amazon's Order Performance policy sets minimum standards for seller fulfilled orders, and it enforces them. You can see each metric in the Customer Service Performance and Shipping Performance sections of the Account Health dashboard. These are the numbers every FBM seller has to watch.
| Metric | Target | Measured over | If you miss it |
|---|---|---|---|
| Order defect rate | Under 1% | 60 days | May lose or restrict selling privileges |
| Cancellation rate | Under 2.5% | 7 days | May lose or restrict selling privileges |
| Late shipment rate | Under 4% | 10 and 30 days | May suspend FBM privileges or deactivate offers |
| Valid tracking rate | Over 95% | 30 days, per category | May restrict non-FBA sales in the category |
| On-time delivery rate | At least 90%; 95% recommended | Tracked seller fulfilled items | May restrict seller fulfilled listings |
| Business hour delivery rate | 90% or higher | 14 days, business orders | FBM offers may be deactivated for business customers |
Order defect rate combines three things: negative feedback of 1 or 2 stars, A-to-z Guarantee claims, and service credit card chargebacks. Amazon counts them by order date. A claim Amazon decides was not your fault does not count, and neither does a fraud chargeback. Our guide to Amazon account suspension covers what happens when these numbers slip too far.
Handling time and tracking: the two most missed rules
Handling time is the period between receiving an order and giving the package to the carrier. Amazon's policy says that from June 29, 2026, sellers must set accurate handling times for seller fulfilled SKUs: your actual handling time has to consistently match the one you configured. If you consistently ship at least a day faster than stated, the SKU shows as non-compliant.
Amazon's recommended fix is Automated Handling Time, which sets handling times from your recent shipping history and gives late shipment rate protection. The requirement does not apply to custom, handmade, or heavy and bulky less-than-truckload shipments.
Tracking that counts as valid
- A carrier that is integrated with Amazon
- The carrier chosen from the drop-down in Manage Orders
- The tracking number entered exactly, with no special characters
- The carrier name matching the tracking number
- Tracking confirmed or corrected before the order is delivered
What makes tracking invalid
- A misspelled carrier name, or extra words in it
- The wrong carrier for the tracking number
- Blank tracking information
- Tracking added after delivery, which does not count
- A carrier Amazon does not integrate with
These come from Amazon's late shipment rate help page. Buying labels through Amazon Buy Shipping removes most of the risk, because the order is confirmed and tracked automatically.
Amazon Buy Shipping and Veeqo
Amazon Buy Shipping lets you buy and print labels in Seller Central for UPS, FedEx, USPS and other carriers. Amazon says its pre-negotiated rates are over 31% lower on average than retail ground rates for UPS, FedEx and USPS. It also gives account health protection: Amazon refunds the cost of claims when customers report that a package did not arrive, if you meet the conditions.
Veeqo, an Amazon company, is free multichannel shipping software. Amazon says it can manage inventory and orders from Amazon, eBay, Etsy, Shopify and Walmart, buy labels at low rates, and give up to 5% back in credits on eligible shipments.
| Tool | What it does | Conditions Amazon names |
|---|---|---|
| Amazon Buy Shipping | Labels at pre-negotiated rates, automatic confirmation and tracking | For A-to-z claim protection: label through Buy Shipping, ship on time, answer buyer messages within 48 hours |
| Veeqo | Free shipping and inventory software across channels | Up to 5% back on eligible shipments |
| Amazon Shipping | Amazon's own parcel network, two to five day delivery | For Amazon and other channels |
| Shipping API and integrators | Buy Shipping through your own software | Same Buy Shipping benefits |
Amazon also says Buy Shipping users get more Amazon-paid refunds for A-to-z claims and more SAFE-T claim reimbursements than sellers who ship on time with outside labels. For a seller fulfilled business, that protection is often worth more than the rate discount.
Amazon FBM fees and costs
Amazon charges no fulfillment fee for FBM. You pay your selling plan and the referral fee on each sale, which varies by category and is a percentage of the total price or a minimum amount, whichever is greater. Everything else is your cost: storage, packaging, labor, shipping labels and returns. Amazon's own answer is that FBM costs vary by product weight and dimensions.
| Cost line | FBM | FBA |
|---|---|---|
| Selling plan and referral fee | Yes | Yes |
| Fulfillment fee per unit | No; you pay shipping and packing instead | Yes, Amazon's FBA fee |
| Storage | Your own space or 3PL | Amazon's monthly storage fees |
| Shipping labels | Yours, cheaper through Buy Shipping | Included in the FBA fee |
| Customer service and returns | Your time and return labels | Handled by Amazon |
| Inbound shipping to Amazon | None | Yes, to fulfillment centers |
Take an illustrative product at $40 that weighs 3 pounds. Say the referral fee is $6, the label through Buy Shipping $7.50, packaging $1 and packing labor $1.50. FBM fulfillment then costs $10 an order before storage. Whether that beats FBA depends on the FBA fee for the same size and weight, which Amazon's Revenue Calculator shows side by side for a real product.
Amazon's Revenue Calculator is one of the free tools for Amazon sellers we keep a list of.
Seller Fulfilled Prime: the Prime badge for FBM
Seller Fulfilled Prime puts the Prime badge on products you ship yourself. Amazon says you prequalify by fulfilling a minimum number of packages and meeting performance requirements, then pass a 30 day trial. You need a Professional account and a US default shipping address. Amazon also says the Prime badge helps increase your likelihood of becoming the Featured Offer.
| Requirement | Seller Fulfilled Prime standard |
|---|---|
| On-time delivery | At least 93.5% |
| Valid tracking rate | At least 99%, first scan by an Amazon integrated carrier |
| Cancellation rate | 0.5% or less |
| Volume | At least 100 Prime packages a month, shipped consistently |
| Order cut-off | 2:00 p.m. or later on weekdays, 10:30 a.m. or later on weekends |
| Weekends | Receive, pack and ship Prime orders on Saturday, Sunday or both |
| Shipping | Free standard shipping to the contiguous US for all customers |
| Returns | Process and refund within two business days of arrival |
Performance is reviewed weekly, Sunday to Saturday. A first miss brings an email; a second disables Prime offers; a third revokes enrollment. Amazon handles post-order customer service for Prime items, including returns and refunds. Premium Shipping, for one and two day delivery without the badge, is the other option Amazon names after meeting performance requirements.
When FBM is the right choice
Heavy and bulky products
Amazon names heavy or bulky items as a reason sellers use FBM.
Slow moving inventory
Stock that sells slowly avoids FBA storage costs when you keep it yourself.
Temperature sensitive goods
Products that cannot be sold through FBA can still ship FBM.
Custom and handmade products
Made to order items, and a personal touch in the box.
Several sales channels
One stock pool for Amazon, your site, eBay, Etsy or Walmart, through Veeqo or Multi-Location Inventory.
Testing a product
List without sending stock to Amazon first; move to FBA if it sells.
Many sellers use both. One Amazon seller quoted on Amazon's own site says FBA and FBM together let them keep custom work while also having a more automatic sales stream. Our guides to Amazon FBA vs FBM and how Amazon FBA works cover the other side of the decision.
Customer service and returns under FBM
Outside Seller Fulfilled Prime, customer service is yours. Amazon asks FBM sellers to check for buyer requested cancellations in Manage Orders, answer questions through Buyer-Seller Messaging, and respond to return requests within 24 hours in Manage Returns, where you can authorize, close or complete a return.
Answering fast is also a claim defense. To be eligible for A-to-z claim protection with Buy Shipping labels, Amazon says you must respond to any customer inquiry in Buyer-Seller Messaging within 48 hours. The Fulfillment Insights Dashboard compares promised and actual delivery times, which shows where late deliveries start.
If daily order and message handling is the part you cannot staff, our Amazon virtual assistant service covers it, and our full account management service includes account health monitoring.
Common FBM mistakes
Optimistic handling times
A short stated handling time you do not meet raises late shipment rate; from June 29, 2026 it must match reality.
Confirming late
Shipment is late if not confirmed by the expected ship date, even if the box left on time.
Invalid tracking
A misspelled carrier or wrong carrier makes tracking invalid. Buy Shipping avoids it.
Canceling out of stock orders
Seller cancellations count; keep inventory synced across channels.
Slow return responses
Return requests need an answer within 24 hours.
Pricing without shipping
Label, packaging and labor per order decide whether FBM beats FBA.
For a second opinion on whether a product belongs in FBM or FBA, our FBA inventory consulting service compares the two for your catalog. If you use a supplier to ship, see our guide to Amazon dropshipping for the seller of record rules.
Amazon FBM: FAQ
What does FBM mean on Amazon?
Fulfilled by Merchant: you store, pack and ship your own Amazon orders and handle customer service, instead of using Fulfillment by Amazon.
Does Amazon charge fees for FBM?
There is no FBM fulfillment fee. You pay your selling plan and the referral fee on each sale, and your own shipping, packaging, storage and labor costs.
What performance targets apply to FBM sellers?
Amazon's Order Performance policy asks for an order defect rate under 1%, cancellation rate under 2.5%, late shipment rate under 4% and valid tracking rate over 95%, plus an on-time delivery rate of at least 90%.
Can FBM products get the Prime badge?
Yes, through Seller Fulfilled Prime, after prequalifying on performance and passing a 30 day trial. Amazon requires, among other things, 93.5% on-time delivery and 99% valid tracking.
What is Amazon Buy Shipping?
Amazon's label service in Seller Central. Amazon says its rates are over 31% lower on average than retail ground rates, and it offers protection against delivery claims if you ship on time.
What is Veeqo?
Free multichannel shipping software from Amazon for managing inventory and orders across Amazon, eBay, Etsy, Shopify and Walmart, with up to 5% back on eligible shipments.
How fast do I need to ship FBM orders?
Within the handling time you set. From June 29, 2026 Amazon requires handling times that match how fast you actually ship; Automated Handling Time is Amazon's recommended way to comply.
Who handles returns for FBM orders?
You do, although Amazon automatically enrolls US sellers in prepaid return labels and authorizes requests within its policy. You must respond to return requests within 24 hours.
When is FBM better than FBA?
For heavy or bulky items, slow moving stock, temperature sensitive goods, custom products, or when you already run a warehouse and sell on several channels.
Can I use FBA and FBM at the same time?
Yes. Amazon lets you use FBM for some products and FBA for others.
What happens if my late shipment rate goes above 4%?
Amazon's policy says it may suspend your Fulfilled by Merchant selling privileges or deactivate seller fulfilled offers with high rates of late shipments.
Do I need a Professional account for FBM?
Amazon recommends it for the full range of FBM services, and Seller Fulfilled Prime requires it.
Sources
- Amazon FBM (Fulfilled by Merchant), Sell on AmazonLast verified September 24, 2026.
- Order Performance program policy, Seller Central helpLast verified September 24, 2026.
- Order Defect Rate, Seller Central helpLast verified September 24, 2026.
- Late Shipment Rate, Seller Central helpLast verified September 24, 2026.
- Seller Fulfilled Prime, Sell on AmazonLast verified September 24, 2026.
- Seller Fulfilled Prime performance requirements, Seller Central helpLast verified September 24, 2026.
- Seller Fulfilled Prime program policy, Seller Central helpLast verified September 24, 2026.
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