RedHat Prep · 4 min read · Published
FBA vs FBM vs 3PL: which fulfillment option fits your business?
FBA, FBM and a 3PL answer one question: who stores and ships your orders. Here is how they differ and how to choose.
FBA, FBM and a 3PL are three answers to the same question: who stores your products and ships your orders? FBA means Amazon does it. FBM means you do it. A 3PL means a third-party warehouse does it for you. They are not mutually exclusive, and many sellers use more than one.
What is FBA (Fulfillment by Amazon)?
You send your inventory to Amazon's fulfillment centres. When an order comes in, Amazon picks, packs and ships it, and handles customer service and returns for those orders. In return you pay Amazon fees for fulfillment and storage, and you must prepare your inventory to Amazon's rules (labels, packaging and so on) before it arrives. Amazon's rules and fees change, so check Seller Central for the current ones.
Good for: sellers whose sales are mostly on Amazon and who want Amazon to handle delivery and customer service.
Watch for: fees that rise with size, weight and storage time, strict prep requirements, and less control over the customer experience.
What is FBM (Fulfillment by Merchant)?
You keep the inventory and ship each order yourself, or have someone ship it for you. You set the packaging, the carrier and the speed, and you handle the customer questions and returns. The inventory can be in your own space or at a 3PL.
Good for: items that are large, slow-moving or hard to prep for Amazon, brands that want to control packaging and the unboxing experience, and sellers on several channels.
Watch for: the time packing and shipping takes, and delivery speed, because customers compare you to Amazon.
Where does a 3PL fit?
A 3PL is the service that does the storing, packing and shipping, so it is a way of doing FBM without doing it yourself. You send the inventory to the 3PL, orders from your store or marketplaces flow to them, and they ship. Some 3PLs, including us, also prepare and label inventory for Amazon FBA and Walmart WFS, and can deliver it to nearby Amazon fulfillment centres. Read more in what a 3PL is.
Good for: sellers who sell on their own store and marketplaces, who are outgrowing their space or time, or who want to ship across the border without a US warehouse.
Watch for: minimums, what the price includes and how fast they ship. We list the questions in how to choose a 3PL.
How to choose
- Where do most of your sales come from? Mostly Amazon points to FBA. A mix of your own store, Amazon and other marketplaces points to a 3PL for the non-Amazon orders.
- What are you selling? Small, light, fast-moving items suit FBA. Bulky, fragile, low-margin or slow items can lose money on FBA fees, so FBM through a 3PL may fit better.
- How much control do you want? FBM and a 3PL let you decide the packaging, inserts and carriers.
- How much time do you have? If packing is taking over your week, outsource it.
- Do you ship to the US from Canada? A 3PL with cross-border carriers can handle it. Rules and duties change, so ask who handles the customs paperwork.
Compare by cost, not by label
Price each option for one typical month: units, orders, items per order, storage and shipping. Include your own time. Then compare the totals. Our published prices make that easy for the 3PL side, and this guide shows how to read any quote.
How we fit
We prepare inventory for Amazon FBA and Walmart WFS, we pick, pack and ship DTC and B2B orders, and we can deliver to Amazon fulfillment centres in southern Ontario, all from our warehouse in Milton in the Toronto area. There is no order minimum.
FAQ
Common questions
Can I use FBA and FBM together?
Yes. Many sellers send their fast-moving products to FBA and ship the rest themselves or through a 3PL. Amazon lets you list the same product under both, subject to its rules.
Is FBA always cheaper than using a 3PL?
No. It depends on the size and weight of your items, how long they sit in storage and how many orders you ship. Price a typical month both ways.
Does a 3PL replace FBA prep?
No, they do different jobs. Prep gets your inventory ready for Amazon's warehouses. A 3PL ships orders to your customers. Some providers do both.
What about Walmart?
Walmart's program, WFS, works like FBA: you send inventory to Walmart and it ships the orders, and you prepare the inventory to Walmart's rules first.
Not sure which fits?
Tell us what you sell and where. We will say plainly whether FBA, a 3PL or both make sense.