FBA (Fulfillment by Amazon)

FBA (Fulfillment by Amazon) is Amazon's logistics program in which sellers send inventory to Amazon's fulfillment centers, and Amazon stores the products, then picks, packs, ships, and handles customer service and returns for each order. FBA products qualify for Prime delivery, which typically improves visibility and conversion on the marketplace.

Amazon launched FBA in 2006, and it has since become the default fulfillment model for most third-party sellers — a group that Amazon reports now accounts for more than 60% of all units sold in its store.

How does FBA work?

The seller remains the owner and seller of record of the products; Amazon acts purely as the logistics provider. The cycle has four steps:

1. Prep and ship inbound. You label units to FBA specifications and send them to the fulfillment centers Amazon assigns.
2. Storage. Amazon stores your stock and makes the listings Prime-eligible.
3. Fulfillment. When a customer orders, Amazon picks, packs, and ships the unit under its delivery promise.
4. Post-sale. Amazon handles delivery questions, most returns, and refunds through its own customer service.

Everything upstream of the fulfillment center — sourcing, import, compliance, pricing, advertising — stays the seller's responsibility.

What does FBA cost?

FBA pricing has two main components, both charged per Amazon's published rate cards:

Fee type	What it covers	What drives it
Fulfillment fee	Pick, pack, shipping, customer service	Unit size tier and weight
Monthly storage fee	Warehouse space	Volume stored; higher rates in Q4 (October–December)

Surcharges apply on top — most notably aged-inventory fees for stock sitting too long and low-inventory-level fees for chronically under-stocked ASINs. Amazon also scores your stock efficiency through the Inventory Performance Index (IPI); a low IPI can cap how much inventory you're allowed to send in. Because fees scale with size and weight, oversized or slow-moving products are where FBA economics most often break down.

FBA vs. FBM vs. 3PL: what's the difference?

Model	Who fulfills the order	Channels covered	Prime badge
FBA	Amazon, from its own fulfillment network	Amazon only	Yes, by default
FBM	You, from your own warehouse or partner	Amazon orders, self-shipped	No (unless Seller Fulfilled Prime)
3PL	An independent logistics company	Amazon (as FBM), D2C, other marketplaces — one inventory pool	No

Many established brands run a hybrid: FBA for fast-moving Amazon SKUs, a 3PL for D2C and other marketplaces.

How does FBA work in Europe?

This is where FBA gets operationally heavy for non-EU brands. Selling through FBA in Europe means importing inventory before Amazon will touch it: your company (or a partner) must act as the importer of record, hold an EORI number, and clear customs — often under DDP terms.

The bigger trap is VAT: storing goods in an EU country creates a local VAT registration obligation in that country. Amazon's Pan-European FBA program improves delivery speed and fees by spreading your stock across fulfillment centers in multiple EU countries — but each storage country adds another VAT registration and filing obligation. Programs like the EU's One-Stop Shop (OSS) simplify cross-border B2C reporting, but they do not remove registrations triggered by where inventory physically sits.

For physical-goods brands, this is why European FBA expansion is rarely just a logistics decision — it is a tax and compliance footprint decision. A merchant of record for physical goods absorbs that footprint by becoming the legal seller, so the brand can use FBA's logistics without building the compliance stack behind it.

What do sellers get wrong with FBA?

The most common mistakes we see operating Amazon accounts across the US and Europe:

• Treating FBA fees as fixed. Size-tier boundaries matter; a small packaging change can move a product down a tier and permanently cut the fulfillment fee.
• Over-sending inventory before Q4. Storage fees rise in October–December, and aged-inventory surcharges punish stock that doesn't sell through.
• Expanding into EU FBA before the compliance is ready. Missing VAT registrations or import setup can freeze inventory at the border or force a marketplace suspension later.
• Assuming FBA replaces operations. FBA is fulfillment only — listing quality, advertising, pricing, and account health remain entirely on the seller.

FAQ

Does FBA make my products Prime-eligible?
Yes. Inventory fulfilled through FBA carries the Prime badge by default, which is one of the main commercial reasons sellers choose it over shipping orders themselves.

Do I need VAT registrations to use FBA in Europe?
Yes — storing inventory in an EU country triggers a VAT registration obligation there, and Pan-European FBA multiplies this across every storage country. The OSS scheme simplifies B2C reporting but does not remove storage-based registrations.

Is FBA the same as using a 3PL?
No. FBA only fulfills orders sold through Amazon and grants the Prime badge; a 3PL is channel-agnostic and can serve your D2C store and other marketplaces from one inventory pool. Many brands use both.

Running FBA in Europe means VAT registrations, imports, and compliance in every country you store stock. eBrands takes all of that on as your Merchant of Record — see how our Amazon operations work.