【Logistic 101】What is Fulfillment By Amazon? Pros & Cons

What is Amazon FBA? 

Amazon FBA (Fulfillment by Amazon) is a popular service offered by Amazon, one of the services under amazon logistics, that allows e-commerce businesses to outsource their order fulfillment and storage. By using FBA, businesses can take advantage of Amazon’s vast network of fulfillment centers to store, pick, pack, and ship their products to customers. This reduces the time and effort required to manage fulfillment operations, allowing businesses to focus on other aspects of their operations. 

It allows businesses to store their products in Amazon’s fulfillment centers. When a customer places an order, Amazon picks, packs, and ships the product on behalf of the business. Amazon also handles customer service and returns, making it a comprehensive fulfillment solution for e-commerce businesses. 

Author Name:Tiffany Lee – Marketing Analyst at FreightAmigo

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People or enterprises who may be suitable for this service:  

  • Individual sellers who are preparing to sell products on Amazon due to warehousing or manpower problems. 
  • Small businesses that want to expand their online presence and offer fulfillment services through Amazon. 
  • Medium and large enterprises that need to optimize their supply chain and expand their business scale through Amazon’s logistics services. 
  • Owners and businesses who need to reduce their logistics and inventory management workload. 
  • Individuals and businesses who want to store inventory in Amazon warehouses and utilize Amazon’s customer service team to process orders and returns. 
  • Owners and businesses who want to sell their goods globally and deliver them to international customer 

Benefits of FBA 

  1. Reduced Time and Effort – By outsourcing fulfillment operations to Amazon, businesses can reduce the time and effort required to manage their own fulfillment. 
  2. Access to Prime Customers – Products fulfilled by Amazon are eligible for Prime shipping, giving businesses access to a wider audience of Prime customers. 
  3. Enhanced Customer Service – Amazon handles customer service and returns, providing businesses with a comprehensive and reliable customer service solution. 
  4. Increased Efficiency – By leveraging Amazon’s vast network of fulfillment centers, businesses can improve the efficiency of their fulfillment operations and reduce shipping times. 
  5. Improved Cash Flow – By using FBA, businesses can reduce their inventory costs and improve their cash flow, as they only pay for storage and fulfillment services as they are needed. 

Drawbacks of FBA 

  1. FBA fees: A downside to using FBA is that the FBA fees can be pretty costly. Depending on the size and weight of your product, the fees to fulfill your order are roughly 30-40% of your product price. You need to calculate the fees before selling a product to determine the profitability. 
  2. FBA storage fees. On top of FBA fees, Amazon also charges you to keep your items stored in their fulfillment centers. There are two types of storage fees: Monthly and and FBA aged inventory surcharge. Properly managing your inventory will help you avoid the aged inventory surcharges, as they can become very expensive. 
  3. Inventory capacity limits. Amazon has implemented an FBA storage capacity system to prevent sellers from overstocking their inventory. The amount you are allowed to send in depends on your sales history and IPI score. 
  4. Higher return rates: While this is very convenient for customers, the ease of returning items on Amazon may cause you to experience higher return rates compared to other marketplaces. 

Simplify your logistics process with efficient services 

FreightAmigo’s efficient service can provide sellers with efficient logistics solutions. With comprehensive services including customs clearance, cargo insurance and trade finance, sellers can simplify their logistics processes and benefit from our digitized logistics procurement process. Our system enables FBA sellers to focus on growing their business. Additionally, our experienced team can provide expert advice and insights from the logistics industry to help sellers navigate the complexities of international shipping and customs regulations. 


There Are Different Options For Cargo Transportation. If You Want To Choose The Most Convenient And Suitable Solution, It Is Best To Have The Full Support Of Logistics Experts! If You Are Planning To Ship Goods Overseas, Please Go To The FreightAmigo Page For Inquiries.