Fulfillment by Amazon (FBA) is a service where Amazon stores your products, then picks, packs, and ships your orders and handles customer service and returns for them. A business sends inventory to an Amazon fulfillment center, a customer buys, and Amazon does the rest.

It is one of the few fulfillment options that can deliver the online shopping trifecta: free shipping, fast delivery, and free returns. That is why FBA has become the leading fulfillment service for so many growing ecommerce businesses.

This guide covers how Amazon FBA works, what it costs in 2026, its advantages and drawbacks, and what to do when you start selling on more channels than Amazon.

What is Amazon FBA?

Sellers have several options for Amazon order fulfillment. They can pack and ship products themselves, through Fulfillment by Merchant (FBM) or Seller Fulfilled Prime, or they can outsource to a 3PL. Amazon FBA is Amazon’s own fulfillment service: Amazon receives and stores your inventory, then picks, packs, and ships ecommerce orders.

FBA acts as the middleman for the whole fulfillment process, which begins when a customer places an order and ends when they receive it. If a customer needs an exchange or refund, FBA uses Amazon’s logistics network to complete the return, and customers get access to Amazon customer service.

Outside the Amazon marketplace, Amazon also offers Multi-Channel Fulfillment (MCF). It lets brands take orders from their own website, social media, or other marketplaces and still have Amazon pick, pack, and ship them from FBA stock.

How does Amazon FBA work?

FBA requires an Amazon seller account. Business owners can use an existing customer account or create a new seller account with a business email. A seller account needs a phone number, government ID, an internationally chargeable credit card, and a bank account to receive sales proceeds.

Once the account is set up, the FBA process is straightforward:

1. Set up FBA in Seller Central. Choose the FBA services you need, such as Multi-Channel Fulfillment for orders from your own or third-party sites.
2. Create FBA product listings. Add products to the Amazon catalog, create a unique product identifier (such as a UPC or ISBN) and a SKU, and include product details such as a description and images.
3. Prepare and ship products to Amazon. Amazon stopped prepping and labeling inventory at US fulfillment centers on January 1, 2026, so you or your supplier must prep and label units to Amazon’s guidelines before sending them to a designated fulfillment center.
4. Amazon stores the products. Amazon houses your inventory at a fulfillment center, for a storage fee, until a customer orders.
5. Amazon handles the order. Amazon packs and ships the order from its fulfillment center, updates your inventory, and manages customer service if there is a return or refund.

FBA is not free, so the next section covers what it costs.

Amazon FBA fees explained

FBA costs stack across several categories, and each one matters before you commit a product to the program. The figures below reflect Amazon’s published changes as of October 2026.

• Selling plan. Individual sellers pay $0.99 per unit sold. Professional sellers pay a flat $39.99 a month regardless of volume, which is the better deal above roughly 40 units a month.
• Referral fee. Amazon takes a percentage of each sale. It is 15% in most categories and ranges from 8% to 45% depending on the category. Amazon held referral fee rates steady for 2026.
• Fulfillment fee. This covers picking, packing, and shipping, and depends on the item’s size tier, weight, and price. Items priced under $10 use separate Low-Price FBA rates. Amazon raised fulfillment fees on January 15, 2026, by about $0.08 per unit on average, according to Amazon.
• Fuel and logistics surcharge. On April 17, 2026, Amazon added a 3.5% surcharge to FBA fulfillment fees in the US and Canada, and from May 2, 2026 for Multi-Channel Fulfillment. It applies to the fulfillment fee, not the sale price. On a $5.00 fulfillment fee, it adds about 18 cents.
• Peak-season fees. Amazon adds temporary peak fulfillment fees over the holidays. This season they run from October 15, 2026 to January 14, 2027, and the surcharge applies on top.
• Storage fee. Charged per cubic foot per month, with higher rates from October through December than from January through September. Inventory that sits too long also triggers aged inventory surcharges.
• Other fees. These include inbound placement fees, removal and disposal fees, and surcharges for aged or low-stock inventory.

Your Inventory Performance Index (IPI) score affects how much you can store. Amazon’s minimum threshold is 400, and sellers below it face storage limits, so aim for 500 or more to keep a buffer.

Use the FBA Revenue Calculator to see the exact costs for a specific product. Amazon adjusts these rates at least once a year, so treat the figures above as a guide and check Seller Central before you decide.

Five reasons ecommerce businesses use Amazon FBA

There is a reason thousands of ecommerce businesses use Amazon FBA. Here are five.

1. Incentives for new sellers and new products

Amazon runs programs that lower the cost of starting out. New Seller Incentives offer benefits such as advertising credits and discounts for new sellers. The FBA New Selection Program, updated on July 30, 2026, offers free storage, returns, and liquidations on the first 200 units for 120 days of eligible new-to-FBA branded products. The two programs do not stack, and New Seller Incentives apply first, so check Seller Central for what you qualify for.

2. Access to an advanced fulfillment network

Amazon has one of the most advanced fulfillment networks in the world. Beyond storage, packing, and shipping, FBA includes access to Amazon customer service.

• FBA customer support. Rather than run customer service yourself, you can rely on Amazon to handle phone or email support for no extra charge.
• FBA customer returns. Amazon manages returns through its own returns center, so you avoid the hassle and customers get a simple, free way to return items.

3. The delivery speed shoppers expect

Shoppers expect fast, free delivery, and Prime eligibility signals both. FBA makes your products eligible for Prime two-day shipping and the perks shoppers have come to expect.

4. Cost-effective to scale

Unlike fixed-cost warehousing, FBA charges you only for the storage space you use and the orders Amazon fulfills. Shipping is built into the fees, with no extra charge for Prime two-day delivery. Programs such as FBA Subscribe & Save, which lets you offer discounts on eligible products, can help you grow over time.

5. Better odds in search and the Buy Box

FBA is one of the factors Amazon weighs when deciding who wins the Buy Box, the “Add to Cart” button on a product listing, because Prime-eligible offers appeal to shoppers. See our guide to winning the Amazon Buy Box for the other factors.

What are the disadvantages of using Amazon FBA?

Despite the benefits, FBA has real drawbacks. Consider these five.

1. Platform risk

The most obvious disadvantage of relying on Amazon is platform risk. A seller that only sells through Amazon has a single point of failure. If Amazon has delays in its fulfillment centers or with its delivery drivers, your business has delays too. If Amazon removes your listings or suspends your account, which happens more often than many sellers expect, your sales stop.

2. Unbranded product packaging

Packaging is part of the brand experience, and orders shipped by FBA arrive in Amazon-branded packaging. For a small business, that makes it harder to build brand awareness and to delight customers at the unboxing.

3. A higher return rate

The ease of returns through Amazon can increase how often customers send products back. Clear expectations and descriptive listings help, but some customers will use Amazon’s free and easy returns freely.

4. More competition

When you sell on Amazon, you compete against every other seller in your niche and sometimes Amazon itself. Your brand story is reduced to your listing pages. Amazon also has data on every product on the platform, and has been known to launch its own products in categories where it sees strong demand.

5. Additional monthly costs

Monthly FBA fees can add up, especially storage fees for unsold stock. You are responsible for prepping and labeling units, and Amazon charges removal and disposal fees for inventory it deems unsellable.

Is Amazon FBA worth it?

There is no single answer. It depends on whether your products stay profitable after FBA fees. In most cases, FBA is a good option for businesses that sell small, fast-moving products, such as apparel.

High turnover limits storage fees, helps keep your IPI score healthy, and protects you from the cost of returns. If you are just starting out with FBA, send only your best sellers or your highest-margin products to test it. In the end, the decision depends on demand for the product and the profitability of the business.

Amazon FBA for multichannel sellers

Many sellers start on Amazon and then add their own website, eBay, Walmart, or TikTok Shop. Once you do, FBA is only one of your fulfillment locations, and the hard part becomes keeping stock accurate across all of them. Our guide to multichannel selling covers the wider picture. These are the common approaches:

• Use Multi-Channel Fulfillment. Ship orders from other channels using your FBA stock, with Amazon MCF.
• Split your stock. Keep fast-selling Amazon products in FBA and hold other stock in your own warehouse or with a 3PL, so you can ship to other channels with your own packaging.
• Mix FBA and FBM. Move bulky, slow-moving, or low-margin items out of FBA. Our guide to FBM vs FBA explains how, including how to move products from FBA to FBM.

When FBA stops being enough

These signs suggest it is time to add another fulfillment option alongside FBA:

• A growing share of your sales comes from channels other than Amazon.
• FBA fees take too much of the margin on slow movers or bulky products.
• Storage limits or your IPI score are holding back restocking.
• You want branded packaging, inserts, or direct contact with customers.
• Too much of your revenue depends on one account staying in good standing.

Weigh the options in our comparison of Amazon FBA vs 3PL. If you also sell on Walmart, see Walmart WFS vs Amazon FBA.

Linnworks and Amazon FBA

Linnworks for Amazon FBA sellers keeps inventory and orders in one place, so FBA fits into a wider operation. Linnworks connects to 100+ native channel integrations and syncs stock across them in under 10 minutes. With shipping management built in, it also helps you manage carriers, labels, and tracking for orders you fulfill yourself. You can:

• Maintain accurate stock levels with automatic stock sync
• Route orders to FBA, your own warehouse, a 3PL, or drop-ship vendors with rules you define
• Use warehouse transfers to track stock moving between locations
• Avoid overselling when stock is split between FBA and other locations

More Amazon FBA guides

• Amazon FBM vs FBA: which fulfillment method is best, and how to move from FBA to FBM
• Amazon FBA vs 3PL: which is right for your business
• Amazon FBA inventory management and warehousing
• Amazon inventory management software and strategies
• Walmart WFS vs Amazon FBA
• Seller Fulfilled Prime explained
• Fulfilling FBA with the replenishment report
• Selling internationally on eBay with eBay International Shipping

Frequently asked questions