What is FBA (Fulfillment by Amazon)?

FBA (Fulfillment by Amazon) is a fulfillment service offered by Amazon that lets third-party sellers store inventory in Amazon's network of fulfillment centers while Amazon handles picking, packing, shipping, customer service, and returns. For a seller, FBA turns logistics — arguably the most operationally demanding part of e-commerce — into an outsourced, pay-for-service model backed by Amazon's infrastructure, speed, and customer reach.

How it works in plain terms

• Sellers list products on Amazon and choose to use FBA for fulfillment.
• Sellers prepare and send inventory to Amazon’s designated fulfillment centers following Amazon’s packaging and labeling rules.
• Amazon receives the products, stores them in its warehouses, and makes them available for purchase on Amazon’s marketplace.
• When a customer orders, Amazon picks, packs, ships the item, and manages delivery tracking, returns, refunds, and customer support.

Key benefits for beginners

• Simplified operations — Sellers don’t need to maintain their own warehouse or hire fulfillment staff.
• Prime eligibility — FBA items typically qualify for Amazon Prime’s fast shipping badge, which increases visibility and conversion.
• Scalability — Amazon’s fulfillment network can handle spikes in demand during seasonal sales or promotions.
• Customer trust — Amazon handles returns and customer service using its established processes, which many buyers trust.

Important cost components to understand

• Fulfillment fees — Per-unit fees covering picking, packing, and outbound shipping. These vary by size and weight.
• Monthly storage fees — Charged based on cubic feet used in Amazon’s warehouses, and they can increase seasonally during peak months.
• Long-term storage fees — Additional charges for inventory stored beyond a certain threshold of days.
• Other fees — Labeling, removal, return processing, and optional services such as preparation or inventory placement.

When FBA makes sense for a beginner seller

• You want to remove the complexity of order fulfillment and returns so you can focus on sourcing, marketing, and growing listings.
• Your product margins can absorb FBA fees and still leave a profit.
• You want Prime visibility to improve conversion and sales velocity.

When FBA might not be a fit

• Very low-margin or bulky and heavy products where FBA fees would erode profits.
• Highly regulated items that require special handling or seller-managed compliance.
• Sellers who prefer full control over packaging, branding, or custom inserts.

Common terms associated with FBA

• FNSKU — The unique identifier Amazon assigns to each seller SKU for inventory tracking.
• Inbound shipment — The shipment plan sellers create to send inventory to Amazon’s warehouses.
• Removal order — A request to have Amazon return or dispose of inventory.
• Storage fee — The monthly cost to store inventory at Amazon facilities.

Real-life example

A small electronics seller sources phone accessories from a manufacturer, ships pallets to Amazon’s fulfillment centers, and uses FBA to serve orders across the country. Amazon’s fast shipping increases the seller’s conversion rate, while Amazon handles returns and customer support, freeing the seller to add new SKUs and run advertising campaigns.

Final beginner tips

• Use Amazon’s fee calculator before sending inventory to estimate costs and margins.
• Follow Amazon’s packaging and labeling guidelines exactly to avoid processing delays or fees.
• Start with a small test shipment to learn the flow before scaling volumes.

FBA is a practical way for new merchants to access enterprise-grade fulfillment without building warehousing or logistics capabilities. With awareness of costs and Amazon’s operational rules, FBA can accelerate growth while reducing the day-to-day logistics burden for a beginner seller.