Overview

Amazon’s fee structure is shifting, prompting more sellers to adopt Fulfilled by Merchant (FBM) as a cost‑effective alternative to the platform’s traditional fulfillment service. The change became a focal point in a recent Helium 10 podcast featuring Fullshipment founder Timo Danner, who explained how higher storage and pick‑and‑pack charges are reshaping fulfillment strategies. Understanding the drivers behind FBM’s rise helps sellers decide whether to keep, tweak, or replace their current logistics model.

Key Points

• Higher long‑term storage fees — Amazon raised its 2024 long‑term storage surcharge by roughly 10 %, turning slow‑moving stock into a costly liability.
• Margin improvement with FBM — Brands that migrated about 30 % of their SKUs to FBM saw profit margins climb between 4 % and 6 % after accounting for lower fulfillment expenses.
• Control over carrier selection — FBM lets merchants pick carriers and service levels, enabling two‑day delivery for premium items without paying FBA’s premium rates.
• Elimination of inbound‑shipment penalties — By fulfilling orders themselves, sellers avoid “in‑bound shipment” fees that arise when Amazon rejects or returns excess inventory, protecting cash flow.
• Multi‑channel inventory consolidation — Retailers selling on Shopify, Walmart, or eBay can use a single warehouse for all orders, sidestepping the need for separate inventory pools at Amazon’s fulfillment centers.
• Real‑time routing technology — Solutions such as Fullshipment automatically toggle between FBM and FBA based on predefined cost thresholds, a capability many sellers now view as essential.
• Seasonal inventory flexibility — During peak seasons, merchants can keep high‑velocity items in Amazon’s warehouses while shifting slower‑moving products to FBM, reducing the risk of excess storage fees.
• Lower return‑processing costs — Handling returns in‑house often costs less than Amazon’s per‑return fee, especially for large or high‑value items, further boosting net profitability.