What is fulfillment by Amazon and how does it work?

If you sell products online, you have probably come across the term Amazon FBA at some point. Whether you are a brand looking to expand into new markets or a business already active on Amazon, understanding how Fulfillment by Amazon works can make a significant difference in how you scale. At Distrilink, we help brands activate and grow on Amazon and other major European marketplaces, so we know firsthand how powerful this fulfillment model can be when used strategically.

What is Fulfillment by Amazon (FBA)?

Fulfillment by Amazon (FBA) is a logistics and fulfillment service offered by Amazon in which sellers send their inventory to Amazon’s warehouses, and Amazon handles storage, packing, shipping, customer service, and returns on their behalf. In short, you supply the products and Amazon takes care of the rest of the order journey.

Launched to help third-party sellers compete at scale, FBA gives businesses access to Amazon’s global logistics network without needing to build their own. Products fulfilled through FBA automatically qualify for Amazon Prime, which means customers receive faster delivery and sellers benefit from increased visibility in search results. It is a model designed to remove operational barriers and let sellers focus on growing their product range and brand.

How does Fulfillment by Amazon actually work?

Amazon FBA works in four core steps: you send your inventory to an Amazon fulfillment center, Amazon stores your products, a customer places an order, and Amazon picks, packs, and ships the product directly to the buyer. Amazon also manages any returns or customer inquiries related to that order.

Here is a closer look at each stage of the process:

1. Inventory preparation: You prepare your products according to Amazon’s labeling and packaging requirements and ship them to a designated Amazon fulfillment center.
2. Storage: Amazon stores your products in its warehouse until a customer purchases them. Storage fees apply based on the volume your inventory occupies.
3. Order processing: When a customer places an order, Amazon’s system automatically routes it to the nearest fulfillment center that holds your stock.
4. Picking and packing: Amazon staff pick the product, pack it according to their standards, and attach the shipping label.
5. Delivery: The order is shipped using Amazon’s carrier network, often with next-day or two-day delivery for Prime members.
6. Returns and customer service: Amazon handles all post-purchase communication and return logistics on your behalf.

This end-to-end process means sellers can operate at high volume without managing physical logistics themselves.

What does Fulfillment by Amazon cost?

Amazon FBA costs consist of two main components: fulfillment fees and storage fees. Fulfillment fees are charged per unit shipped and vary based on the product’s size and weight. Storage fees are charged monthly based on the cubic space your inventory occupies in the fulfillment center.

In addition to these core fees, sellers should be aware of a few other potential costs:

• Long-term storage fees: Products stored for more than 365 days incur additional charges, which incentivizes sellers to manage inventory efficiently.
• Returns processing fees: Depending on the product category, Amazon may charge a fee when processing a customer return.
• Removal fees: If you want unsold inventory returned to you or disposed of, Amazon charges a fee per unit.
• Labeling and prep fees: If you do not prepare your products to Amazon’s standards yourself, Amazon can do it for a fee per item.

The actual fee amounts change periodically, so it is always worth checking Amazon’s current fee schedule directly in Seller Central before committing to a pricing strategy. Understanding your total landed cost, including FBA fees, is essential for maintaining healthy margins.

What’s the difference between FBA and FBM?

The key difference between FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) is who handles the logistics. With FBA, Amazon stores, packs, and ships your products. With FBM, you as the seller are responsible for storing inventory, fulfilling orders, and managing returns yourself or through a third-party logistics provider.

Each model has its advantages depending on your situation:

• FBA is generally better suited for high-volume sellers, products with consistent demand, and businesses that want Prime eligibility without managing their own warehouse operations.
• FBM gives sellers more control over packaging, branding, and fulfillment speed. It can also be more cost-effective for large, heavy, or slow-moving products where FBA storage fees would erode margins.

Some sellers use both models simultaneously, applying FBA to their best-selling products and FBM to items that are less cost-efficient to store in Amazon’s warehouses. This hybrid approach, sometimes called a mixed fulfillment strategy, can help optimize costs while maintaining Prime eligibility where it matters most.

Who should use Fulfillment by Amazon?

Amazon FBA is best suited for sellers who want to scale efficiently without building their own logistics infrastructure. It works particularly well for brands with consistent product demand, compact and lightweight items, and businesses that want to compete for Prime placement without managing warehouse operations.

FBA tends to deliver the most value for:

• Brands entering Amazon for the first time who want a fast, structured route to market
• Businesses with a growing product catalog that would be difficult to fulfill manually at scale
• Companies targeting international Amazon marketplaces who want to leverage Amazon’s cross-border fulfillment capabilities
• Sellers who want to win the Buy Box more consistently, as FBA products often receive a ranking advantage

FBA may be less ideal for businesses with very low margins, oversized products, or highly seasonal inventory that risks incurring long-term storage fees. In those cases, a hybrid approach or FBM may be more financially sensible.

How do you get started with Fulfillment by Amazon?

To get started with Amazon FBA, you need an active Amazon Seller Central account with a Professional selling plan, at least one product listed on Amazon, and inventory prepared according to Amazon’s packaging and labeling requirements. Once those are in place, you can enroll your listings in FBA and create your first shipment plan.

Here is a step-by-step overview of the process:

1. Create or log into your Seller Central account: If you do not already have one, register as a seller and select the Professional plan, which is required for FBA access.
2. List your products: Add your products to Amazon’s catalog with complete and optimized product detail pages.
3. Convert listings to FBA: In Seller Central, change the fulfillment method for your products from merchant-fulfilled to Amazon-fulfilled.
4. Prepare your inventory: Follow Amazon’s requirements for labeling, packaging, and product condition. Each unit needs a scannable barcode that Amazon can track.
5. Create a shipment plan: Use the Seller Central shipping workflow to generate a shipment plan, which tells you how many units to send and to which fulfillment center.
6. Ship your inventory: Send your products to the assigned fulfillment center using an approved carrier.
7. Go live: Once Amazon receives and processes your inventory, your listings become active and Amazon handles fulfillment from that point forward.

The setup process is straightforward for most product types, but getting it right from the start, especially around labeling and inventory planning, makes a real difference in avoiding unnecessary fees or delays.

How Distrilink helps with Amazon FBA

At Distrilink, we help brands grow quickly and in a controlled way on online marketplaces. Rather than building your own marketplace team, IT infrastructure, or logistics operation from scratch, you can activate and scale through us immediately. We currently represent more than 25 brands and are connected to all major European marketplaces.

Our approach to Amazon FBA covers the full operational picture:

• Account activation and setup: We handle the technical setup of your Amazon presence from day one.
• Content and optimization: We create and optimize your product listings to maximize visibility and conversion.
• Logistics and fulfillment: With our own in-house warehouse, we manage inventory preparation, labeling, and shipment to Amazon fulfillment centers.
• Advertising and marketing: We run data-driven campaigns to accelerate growth on the platform.
• Customer service: We manage post-purchase communication so you do not have to.
• Performance reporting: Through our Distrilink Acceleration Platform, you have clear, centralized insight into how your brand performs across all channels.

We take on the full operational execution, from activation and optimization to logistics and customer service, so you can expand your e-commerce footprint without adding complexity. Want to find out how we can help your brand scale on Amazon? Get in touch with us and let’s talk about what is possible.

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