Amazon FBM vs 3PL is a comparison between two fulfillment approaches for Amazon sellers: self-managed Fulfilled by Merchant, where the seller handles storage, packing, and shipping directly; and third-party logistics, where the seller outsources these operations to an external warehouse partner while maintaining control over branding and customer experience. Both options fall under the FBM umbrella on Amazon. The distinction lies in who performs the physical fulfillment work.
The right choice depends on order volume, growth trajectory, and how you want to spend your time. Sellers processing fewer than 50 orders monthly with existing warehouse space often handle fulfillment themselves. Sellers scaling beyond that threshold, expanding to multiple sales channels, or pursuing Prime eligibility frequently partner with a 3PL to maintain service quality without the operational burden.
This guide explains what FBM and 3PL fulfillment involve, compares the key differences, identifies when each approach makes sense, breaks down costs, and covers how Seller Fulfilled Prime factors into the decision. By the end, you’ll have a clear framework for choosing the fulfillment model that fits your Amazon business.
What Is Amazon FBM?
Amazon FBM (Fulfilled by Merchant) is a fulfillment method where the seller manages every step of order fulfillment: storing inventory, picking and packing orders, shipping packages, and handling returns. Amazon hosts the product listing and processes the sale, but the seller or the seller’s designated partner handles physical fulfillment.
FBM sellers maintain complete control over the fulfillment process. This includes choosing packaging materials, selecting shipping carriers, setting handling times, and managing customer communication about delivery. The trade-off for this control is responsibility. FBM sellers must meet Amazon’s performance standards independently.
Amazon monitors FBM seller metrics through the Account Health Dashboard. Key requirements include maintaining an on-time delivery rate (OTDR) of 90% or higher, a valid tracking rate of 95% or higher, and an order defect rate below 1%. Falling below these thresholds can result in account warnings or suspension.
FBM works well for sellers who want direct oversight of their fulfillment operations. However, handling fulfillment yourself is not the only option available to FBM sellers.
What Is a 3PL for Amazon Sellers?
A 3PL (third-party logistics provider) is an external company that handles warehousing, order processing, and shipping on behalf of a seller. For Amazon sellers, using a 3PL means outsourcing FBM fulfillment operations while retaining FBM status on the platform. The seller remains the merchant of record; the 3PL simply executes the physical fulfillment.
3PL services for Amazon sellers typically include receiving and storing inventory, picking and packing orders as they come in, shipping packages via negotiated carrier rates, processing returns, and providing inventory reporting. Many 3PLs integrate directly with Amazon Seller Central, pulling orders automatically and uploading tracking information without manual intervention.
The distinction between using a 3PL and using FBA (Fulfilled by Amazon) matters. FBA means Amazon stores and ships your products from Amazon warehouses. A 3PL partnership keeps your inventory in a third-party warehouse, giving you more flexibility over storage terms, packaging options, and multi-channel fulfillment. Products fulfilled through a 3PL still appear as FBM on Amazon.
A 3PL provider offers professional-grade fulfillment infrastructure without requiring sellers to build their own warehouse operations. Understanding what each option provides is the first step toward making the right decision.
Amazon FBM vs 3PL: Key Differences
The core difference between FBM self-fulfillment and 3PL fulfillment is who performs the physical work. FBM sellers who fulfill orders themselves handle every operational task. Sellers who partner with a 3PL delegate those tasks to a specialized fulfillment company.
Control vs. capacity represents the fundamental trade-off. Self-fulfillment provides direct oversight of every package but limits growth to what you can personally manage. A 3PL partnership trades some direct control for professional infrastructure that scales with demand.
Multi-channel capability is a significant differentiator. Sellers managing their own FBM fulfillment typically focus on Amazon because coordinating inventory across platforms requires additional systems and effort. A 3PL maintains a single inventory pool that can fulfill orders from Amazon, Shopify, Walmart, TikTok Shop, and other channels simultaneously. This eliminates the need to split inventory or manage separate fulfillment workflows per platform.
Cost structure also differs substantially. Self-fulfillment costs include space (rent or opportunity cost), supplies, shipping at retail rates, and your time. 3PL costs are typically itemized: storage fees per cubic foot or pallet, pick and pack fees per order, and shipping at the 3PL’s negotiated rates. The 3PL model converts variable personal effort into predictable per-order costs.
These differences matter because they determine which approach fits your business stage and goals.
When to Use Amazon FBM (Self-Fulfillment)
Self-managed FBM fulfillment works best under specific conditions. The following indicators suggest handling fulfillment yourself makes sense:
Low order volume. Sellers processing fewer than 50 orders per month can often manage fulfillment without it consuming excessive time. At this volume, the fixed costs of a 3PL partnership may not provide proportional value.
Specialized handling requirements. Products requiring unique preparation, custom assembly, or quality checks that only you can perform may benefit from direct oversight. Handmade items, customized products, or goods requiring specialized inspection fall into this category.
Existing infrastructure. Sellers with warehouse space, packing stations, and staff already in place face lower barriers to self-fulfillment. The infrastructure cost is already absorbed.
Maximum control priority. Some sellers prioritize direct oversight of every package over operational efficiency. Self-fulfillment provides that visibility.
Product testing phase. New products with uncertain demand may warrant self-fulfillment initially. This avoids committing inventory to external storage before validating product-market fit.
Self-fulfillment has real advantages for sellers in these situations. The model becomes problematic when order volume exceeds personal capacity, when fulfillment errors increase, or when growth opportunities pass because operations consume all available time. These are signs you may need a 3PL partner.
When to Use a 3PL for Amazon FBM
Four indicators signal that a 3PL partnership would benefit your Amazon business:
Order volume exceeds your reliable capacity. When fulfillment consistently takes more time than you can allocate while maintaining accuracy and speed, outsourcing prevents service quality from degrading. Most sellers hit this threshold somewhere between 100-300 orders per month, though the number varies based on product complexity and available time.
Error rates or late shipments are increasing. Rising order defect rates, late delivery complaints, or inventory discrepancies indicate operational strain. A 3PL with professional systems and trained staff can restore accuracy before metrics trigger Amazon account health issues.
Multi-channel expansion is a priority. Selling on Shopify, Walmart, TikTok Shop, or other platforms alongside Amazon becomes significantly easier with a 3PL managing unified inventory. Without centralized fulfillment, multi-channel selling requires either splitting inventory (risky for stockouts) or juggling multiple fulfillment workflows (time-intensive and error-prone).
Growth opportunities are passing because fulfillment consumes your time. If you’re declining wholesale opportunities, delaying product launches, or neglecting marketing because packing boxes takes priority, the opportunity cost of self-fulfillment exceeds its savings.
Some sellers use a hybrid model: storing bulk inventory at a 3PL while maintaining a smaller FBA allocation for products that benefit from Prime visibility. The 3PL replenishes FBA stock as needed, combining the storage cost advantages of third-party warehousing with FBA’s Prime eligibility for select SKUs.
One major reason sellers partner with a 3PL is to pursue Prime badge eligibility through Seller Fulfilled Prime.
Can You Get the Prime Badge Without FBA?
Yes. Seller Fulfilled Prime (SFP) allows FBM sellers to display the Prime badge on their listings while fulfilling orders from their own warehouse or through a 3PL partner. The program requires meeting strict performance standards that demonstrate Prime-level service.
Seller Fulfilled Prime Requirements
SFP eligibility requires meeting the following performance thresholds:
- On-time delivery rate of 93.5% or higher
- Valid tracking rate of 99% or higher
- Cancellation rate below 0.5%
- Nationwide delivery coverage with one-day and two-day shipping options
- Zero-day handling time (orders ship the same day)
- Weekend delivery and pickup capabilities
- Use of Amazon Buy Shipping for shipping labels
The SFP trial period requires completing at least 100 Prime orders over 30 days while maintaining these metrics. As of June 2025, Amazon limits sellers to three SFP trial attempts per calendar year, with graduation blackout periods around Prime Day and Black Friday preventing new enrollments during peak seasons.
How 3PLs Help Meet SFP Standards
Meeting SFP requirements independently presents significant challenges. Zero-day handling time means every order received by the cutoff must ship that same day, a demanding standard for sellers managing fulfillment alongside other business responsibilities.
3PLs with SFP experience provide several advantages:
Strategic warehouse locations. 3PLs with fulfillment centers across multiple regions can reach customers within one-day or two-day shipping windows more reliably than a single-location seller.
Professional operations infrastructure. Trained staff, optimized picking workflows, and quality control processes maintain the accuracy metrics SFP requires.
Carrier relationships. Established 3PLs have negotiated rates and reliable pickup schedules with carriers that support the delivery speed requirements.
Systems designed for same-day processing. Order management systems that prioritize SFP orders and track cutoff times help maintain zero-day handling compliance.
Meeting SFP requirements comes with costs. Understanding the full cost picture helps clarify whether self-fulfillment or 3PL partnership makes financial sense for your situation.
Cost Comparison: FBM Self-Fulfillment vs 3PL
Fulfillment costs break down into different categories depending on the approach.
FBM Self-Fulfillment Costs
Storage space. Rent for warehouse or storage space, or the opportunity cost of using garage, basement, or spare room space that could serve other purposes.
Packing supplies. Boxes, poly mailers, tape, void fill, labels, and printer supplies. Costs vary by product size and packaging requirements.
Shipping. Carrier rates at retail pricing unless you negotiate volume discounts directly. Small-volume shippers typically pay higher per-package rates than 3PLs with aggregated volume.
Time. The hours spent picking, packing, labeling, scheduling pickups, and managing carrier issues. This represents real cost whether valued at hourly wage equivalent or opportunity cost of activities not pursued.
3PL Costs
Storage fees. Typically charged per cubic foot ($0.50-1.50 monthly) or per pallet ($15-40 monthly). Rates vary by location, commitment terms, and warehouse type.
Pick and pack fees. Per-order charges covering labor to retrieve items, pack them, and prepare for shipping. Standard rates range from $2-4 per order for simple single-item shipments, with additional per-item fees for multi-item orders.
Shipping. 3PLs pass through carrier costs, often at negotiated rates below retail pricing. The discount varies by 3PL volume and carrier relationships.
Additional services. Kitting, custom packaging inserts, returns processing, and FBA prep services typically carry additional per-unit or per-order fees.
Example Comparison
A seller shipping 200 orders per month with average package weight of 2 lbs might compare costs as follows:
Self-fulfillment estimate:
- Shipping (retail rates): $1,400-1,600
- Supplies: $150-200
- Storage (allocated rent): $200-300
- Time (20 hours × $25/hr opportunity cost): $500
- Total: $2,250-2,600
3PL estimate:
- Storage (50 cubic feet): $50-75
- Pick and pack (200 orders × $3): $600
- Shipping (negotiated rates): $1,200-1,400
- Total: $1,850-2,075
The 3PL option in this example costs less while eliminating 20+ hours of monthly labor. Actual figures vary based on product dimensions, shipping zones, and specific 3PL pricing. Requesting quotes from multiple 3PLs with your actual product and volume data provides accurate comparison numbers.
ShipBuddies fulfillment services offer Amazon sellers a path from self-fulfillment to professional 3PL operations with transparent pricing.
How ShipBuddies Supports Amazon FBM Sellers
ShipBuddies provides FBM sellers with professional-grade fulfillment through direct integration with Amazon Seller Central. Orders flow automatically from Amazon to the ShipBuddies warehouse management system, and tracking information uploads to Seller Central without manual intervention.
Multi-channel fulfillment from a single inventory pool supports sellers expanding beyond Amazon. The same inventory serves Amazon, Shopify, WooCommerce, and other sales channels, eliminating the need to split stock or manage separate fulfillment workflows.
SFP-ready operations include same-day processing capabilities, carrier integrations supporting one-day and two-day delivery nationwide, and systems designed to maintain the accuracy metrics Seller Fulfilled Prime requires.
Branded packaging options let sellers maintain their unboxing experience. Custom boxes, branded tape, package inserts, and other presentation elements are available for sellers prioritizing brand consistency.
Ready to scale your Amazon FBM operations? Request a quote to see how ShipBuddies can support your fulfillment needs.
Frequently Asked Questions
What is the difference between FBM and 3PL?
FBM (Fulfilled by Merchant) is Amazon’s designation for seller-managed fulfillment. A 3PL (third-party logistics provider) is a company that can handle FBM fulfillment operations on the seller’s behalf. Using a 3PL means the seller remains FBM on Amazon while outsourcing physical fulfillment to an external partner.
Is a 3PL worth it for Amazon sellers?
A 3PL becomes worth it when order volume exceeds your reliable capacity, when fulfillment errors are increasing, when you want to expand to multiple sales channels, or when fulfillment operations prevent you from pursuing growth opportunities. Sellers processing 100+ orders monthly often find 3PL partnership cost-effective.
Can I use a 3PL for Amazon FBM orders?
Yes. Many Amazon sellers outsource FBM fulfillment to 3PLs while maintaining FBM status on Amazon. The 3PL stores inventory, processes orders, and ships packages. The seller remains the merchant of record on Amazon.
How much does a 3PL cost for Amazon FBM?
3PL costs typically include storage fees ($0.50-1.50 per cubic foot monthly), pick and pack fees ($2-4 per order), and shipping at negotiated carrier rates. Total costs vary based on product size, order volume, and service requirements. Most 3PLs provide custom quotes based on specific business details.
Can FBM sellers get the Prime badge?
Yes, through Seller Fulfilled Prime (SFP). This program allows FBM sellers to display the Prime badge by meeting strict performance requirements including 93.5%+ on-time delivery, 99%+ valid tracking, zero-day handling time, and nationwide one-day/two-day delivery capability.
What are the requirements for Seller Fulfilled Prime?
SFP requires maintaining 93.5%+ on-time delivery rate, 99%+ valid tracking rate, under 0.5% cancellation rate, zero-day handling time, nationwide 1-2 day delivery coverage, weekend shipping capability, and use of Amazon Buy Shipping. A 30-day trial with 100+ Prime orders is required for enrollment.
Is FBM or FBA better for new sellers?
FBA is often simpler for new sellers because it provides automatic Prime eligibility and Amazon handles fulfillment operations. FBM with a 3PL makes sense for new sellers who want brand control through custom packaging, plan to sell on multiple channels from the start, or have products that don’t fit FBA well (oversized, slow-moving, or requiring special handling).
What are the disadvantages of self-fulfilling Amazon FBM?
Self-fulfillment requires significant time investment, limits scalability to personal capacity, makes Prime eligibility through SFP challenging to achieve independently, and restricts multi-channel growth due to the complexity of managing separate fulfillment workflows. Error rates and late shipments can increase as volume grows beyond manageable levels.
Making the Right Choice for Your Amazon Business
The Amazon FBM vs 3PL decision comes down to where you are now and where you want to go. Self-fulfillment works for sellers with low volume, specialized handling needs, or strong preference for direct control. A 3PL partnership makes sense for sellers scaling beyond personal capacity, expanding to multiple channels, or pursuing Prime eligibility through Seller Fulfilled Prime.
Neither option is universally better. The right choice depends on your order volume, growth plans, product characteristics, and how you want to allocate your time. Sellers outgrowing self-fulfillment often find that 3PL partnership costs less than the opportunity cost of continuing to pack boxes themselves.
Get a quote to see how ShipBuddies can support your Amazon FBM fulfillment as your business grows.
