The Ultimate Guide to Amazon Fulfillment Models

Why Amazon Fulfillment Strategy Matters in 2025

For ecommerce brands, fulfillment is more than a back-end process—it’s a profit driver. Amazon has raised storage fees, tightened performance requirements, and changed the rules for Seller Fulfilled Prime (SFP). At the same time, customer expectations for fast, free, and reliable delivery have only grown.

The question for sellers in 2025 isn’t simply whether to choose Fulfilled by Amazon (FBA) or Fulfilled by Merchant (FBM). The real challenge is how to balance FBA, FBM, and SFP in a way that protects margins, wins the Buy Box, and keeps customers loyal.

What Each Fulfillment Model Means

Fulfilled by Amazon (FBA) allows sellers to send inventory directly into Amazon’s fulfillment centers. Amazon then handles storage, picking, packing, shipping, customer service, and returns. The Prime badge is automatically applied to eligible products, which helps conversion, but sellers face high fulfillment and storage fees as well as aged inventory surcharges.

Fulfilled by Merchant (FBM) puts more responsibility on the seller or their 3PL partner. You store inventory outside of Amazon and ship orders directly to customers. This gives you control over packaging, carriers, and branding, while avoiding Amazon’s storage fees. However, FBM listings do not automatically qualify for Prime, which can lower conversion rates compared to Prime-enabled listings.

Seller Fulfilled Prime (SFP) is a hybrid model. Sellers keep inventory with themselves or a 3PL but still display the Prime badge if they meet Amazon’s strict requirements. These include same-day or next-day processing, weekend shipping, and consistently high on-time delivery rates. The benefit is control over inventory and packaging with Prime visibility, but the challenge lies in meeting Amazon’s service-level agreements without destroying margins on shipping.

When FBA Works Best

FBA is still a powerful tool in 2025. It works particularly well for small, light, and fast-moving products where storage costs are manageable and sell-through is consistent. The Prime badge boosts Buy Box visibility, and having Amazon handle returns and customer service reduces operational strain.

However, sellers must be cautious. Aged inventory surcharges can add up quickly if items do not sell on schedule. Large or bulky items are especially risky in FBA because of high dimensional weight fees. Brands should use FBA selectively—reserving it for SKUs with predictable demand and steady sales velocity.

When FBM Makes More Sense

FBM has become increasingly attractive as Amazon fees rise. This model works best for oversized, slow-moving, or custom products that would rack up storage penalties in FBA. It also suits items that require special packaging, bundles, or fragile handling that Amazon’s fulfillment centers may not support.

The trade-off is that FBM listings don’t automatically carry the Prime badge. To stay competitive, brands using FBM must optimize for fast shipping times, transparent delivery estimates, and excellent customer service. FBM offers flexibility across multiple channels, making it ideal for brands that want to sell on Amazon while also supporting wholesale and direct-to-consumer fulfillment.

When SFP Is the Right Choice

Seller Fulfilled Prime bridges the gap between FBA and FBM. It gives sellers control over inventory and packaging while still providing the Prime badge that drives conversions. In 2025, SFP is best suited for margin-rich products where higher shipping costs can be absorbed. It also works well for brands with established logistics infrastructure—or those partnered with a 3PL capable of weekend operations, tight cut-off times, and nationwide or regional 2-day coverage.

That said, SFP is not for every seller. The program has strict rules, and failure to meet them can mean losing Prime eligibility. High postage costs for 2-day shipping also put pressure on margins. For brands that can maintain compliance, however, SFP is a way to keep the Prime badge without locking up inventory in Amazon’s fulfillment network.

Why Most Sellers Use a Hybrid Approach

Very few brands rely on a single fulfillment strategy anymore. The most successful sellers in 2025 use a hybrid approach that assigns each SKU to the most cost-effective model. For example, small and fast-moving products may go to FBA, bulky or seasonal items may stay in FBM, and high-margin SKUs may be run through SFP for Prime conversion.

This blended strategy balances risk, reduces costs, and ensures that stockouts at FBA don’t automatically mean lost sales. With the right allocation, sellers can protect contribution margins while still benefiting from the conversion lift of Prime.

The Metrics That Really Matter

Regardless of fulfillment method, brands should monitor a few key performance indicators to stay competitive on Amazon:

• Contribution margin per SKU after all fees and shipping costs
• Buy Box percentage and Prime vs. non-Prime conversion rates
• On-time ship and delivery performance for FBM and SFP orders
• Aged inventory levels and removal trends for FBA
• Return rates and reasons, which impact product profitability
• Forecast accuracy, ensuring stock levels align with demand

How a 3PL Helps Optimize Fulfillment

Managing multiple fulfillment models on your own can be overwhelming. This is where a specialized 3PL like Snapl adds value. We help brands:

• Prepare and send inventory into Amazon through FBA prep services, including labeling, polybagging, and compliant palletizing.
• Run FBM programs with efficient pick/pack operations, negotiated carrier rates, and branded packaging for a better customer experience.
• Qualify and maintain SFP compliance by supporting Prime-level order cutoffs, weekend operations, and real-time tracking integrations.

By working with a 3PL, brands can compare costs across models, build SKU-level fulfillment plans, and scale without overextending operations.

Choosing the Right Strategy for 2025

There’s no one-size-fits-all answer to FBM vs. FBA vs. SFP. The right fulfillment mix depends on SKU profiles, product margins, sales velocity, and brand goals. In 2025, the brands that win on Amazon are those that treat fulfillment as a strategic advantage, not just a cost center.

Start by modeling true costs across all three methods, then build a hybrid plan that maximizes conversion without sacrificing profitability.

Build Your Hybrid Fulfillment Strategy

Snapl helps ecommerce brands navigate Amazon fulfillment with confidence. Whether you need FBA prep, FBM fulfillment, or SFP support, our bonded and non-bonded facilities in New Jersey and Massachusetts are designed to scale with your growth.

Get in touch today for a custom fulfillment plan tailored to your brand.