Amazon FBA vs FBM in Australia: How to Decide for Each SKU, With a Worked A$ Example

Use FBA for a SKU when Amazon's per-unit fee is lower than what it costs you to pick, pack, post and service the order yourself, and use FBM when it is not. As of October 2026 Amazon charges A$9.22 (excluding GST) to fulfil a 501 to 1,000 g parcel priced at A$13 or more. That fee is the number your own all-in cost has to beat. Most sellers end up with a mix.

What is the difference between FBA and FBM?

With Fulfilment by Amazon (FBA) you send stock to an Amazon fulfilment centre. Amazon stores it, picks and packs each order, delivers it and handles customer service and returns. Amazon states that all shipping costs are included in the fulfilment fee.

With fulfilment by merchant (FBM, also called fulfilment by seller) the stock stays with you. You pack, choose the carrier, print the label, upload tracking and answer buyers. Amazon's own guidance says FBM can suit products that are not ideal for FBA, such as hazardous goods that do not meet fulfilment centre requirements or seasonal products that would incur excessive storage fees. It also says you keep control of inventory and packaging and can stay profitable on tighter margins.

There is a third path for domestic FBM orders: Amazon Easy Ship. It needs a Professional plan and an eligible Australian pick-up address, and fees start from A$3.81 per package excluding GST for Zone A and up to 0.5 kg, as at 1 August 2025. Rates are updated periodically, so check the Easy Ship page.

How do FBA and FBM compare side by side?

The FBA size rule is from Amazon's pricing page. Amazon says stock is typically available within three working days of delivery to a fulfilment centre, so plan the lead time before a launch or sale event.

What does FBA cost compared with doing it yourself?

FBA charges a fulfilment fee per unit by size tier, shipping weight and whether the item sells for A$13 or more, plus monthly storage. The full rate card is in Amazon Australia FBA fees. Storage is A$37.00 per cubic metre per month from January to September and A$51.80 from October to December for standard-size items, both excluding GST. See storage fees for the aged-stock surcharges.

FBM has no Amazon fulfilment fee. The referral fee is the same under both. What you add is your own cost, and sellers usually undercount it. Include:

1. Packaging materials and labels.
2. Labour at your real hourly cost, including peaks.
3. Postage or courier charges by weight band and zone.
4. Returns freight and the time to process returns.
5. Customer-service time.
6. Any A-to-z claim or late-shipment cost you absorb.

For postage rates on the common FBM route, see Amazon FBM with Australia Post. Amazon does not publish a seller's own labour or courier rate, and neither do we, so measure your own.

Worked example: three SKUs, FBA against FBM

This is illustrative. It uses Amazon's published FBA rates and referral fee for the Home and Kitchen category (13%), all excluding GST. Your FBM cost is the unknown, so the table shows the break-even rather than an invented postage price.

Sources: parcel fee bands and the A$13 price split; Home and Kitchen referral rate of 13%. SKU A is under A$13, so it uses the lower column. Because the referral fee is paid on both routes, the comparison turns on the fulfilment line alone.

Now add storage. A unit packed at 20 x 15 x 10 cm is 0.003 cubic metres. At the January to September rate that is A$0.11 per month (0.003 x A$37.00). A unit that sits for four months costs about A$0.44 in storage. Small next to a A$9.22 fulfilment fee, but it grows with slow sellers and with the aged-stock surcharges.

How to read it: SKU A at A$12 has a thin margin, and a courier charge for a 250 g parcel can easily exceed A$6.43 once packaging and labour are in, so FBA usually wins. SKU C is heavy, so postage dominates your FBM cost; get a real courier quote for 4.5 kg and compare it with A$10.19. If you ship each order yourself at A$14 all-in, FBA saves A$3.81 a unit on SKU C. Run your own numbers in the FBA calculator.

Which SKUs should stay FBM?

Keep a SKU on FBM when one of these is true:

• It cannot go into FBA. Items over the size or weight limit, or hazardous goods that fail fulfilment centre rules. See dangerous goods on Amazon Australia.
• It sells slowly. Storage and aged-inventory fees punish stock that sits.
• It is made to order or customised. You cannot send it in ahead of demand.
• Your margin is too thin for the FBA fee and you already ship cheaply from your own warehouse.
• You already run a logistics operation and only need Amazon for demand.

Which SKUs should go into FBA?

• Fast sellers under about 2 kg, where Amazon's fee is hard to beat.
• Products where delivery speed drives the Buy Box. FBA offers support Amazon's delivery promise, and free shipping on eligible orders over A$59 applies to all Amazon.com.au customers. See Buy Box.
• Lines you want to sell during peak events, where your own team would be swamped.

New to FBA? Amazon's FBA New Selection programme cuts the referral fee to 5% for 120 days from the buyable date on eligible new-to-FBA parent ASINs, capped at 100 standard-size or 50 oversize units per parent ASIN.

Can you run FBA and FBM on the same account?

Yes, and many Australian sellers do. Stock you send to FBA is fulfilled by Amazon. Stock you keep is fulfilled by you. Amazon's pricing page describes FBA as having no subscription fee, carrier contract or minimum inventory requirement, so there is no lock-in to trying a handful of SKUs.

A related option is Multi-Channel Fulfilment, where Amazon ships orders from other channels from your FBA stock. That is a separate decision covered in Amazon multi-channel fulfilment. For the full FBA process see the Amazon FBA Australia guide.

How to run the test on a new SKU

1. Measure packed dimensions and weight, not product dimensions, and find the FBA fee row.
2. Get two real courier quotes and time one pack run for the FBM cost.
3. Subtract both from the price after referral fee and GST.
4. Add ads and expected returns to both columns.
5. Start with a small FBA batch and compare sell-through and margin after 60 to 90 days.

Pricing and fees on this page exclude GST. This is general information, not tax advice; confirm GST treatment with the ATO or a registered tax agent.

FAQ

Is FBA cheaper than FBM in Australia? Not always. FBA is cheaper when your own pick, pack, postage and service cost is above Amazon's fee for that size and weight. For a 600 g item priced at A$25 the FBA fee is A$9.22 excluding GST, so FBM only wins if you ship for less than that.

Do I pay a referral fee on FBM orders? Yes. Referral fees apply to total sales price including delivery and gift wrapping, whichever way you fulfil, with no minimum or maximum. FBA adds a fulfilment fee on top.

Can I switch a SKU from FBM to FBA later? Yes. You create a shipment and send stock in. Because the fulfilment centre network and prep rules are separate steps, read Send to Amazon shipments and the prep and labelling requirements first.

Which is better for a new seller? FBA removes shipping and service work and suits fast-moving small products, and the New Selection programme can cut early fees. If you have no stock yet or sell made-to-order items, begin with FBM.

Are there size limits for FBA in Australia? Yes. Products larger than 116 x 116 x 102 cm or heavier than 23 kg are prohibited from FBA, with listed exceptions for certain TVs and monitors.

Does Amazon Easy Ship count as FBM? Easy Ship is for orders on products not registered in FBA, so it sits on the FBM side. It needs a Professional plan and an eligible Australian pick-up address.

Can hazardous goods use FBA? Only if they pass Amazon's dangerous goods review. Amazon names hazardous goods that do not meet fulfilment centre requirements as a reason to fulfil yourself.

Next step

Work through your top ten SKUs using the break-even table above and move only the clear FBA winners first. If you want a second set of eyes on the numbers, Blooprint is an Amazon SPN verified partner that works with Amazon.com.au sellers remotely from Bengaluru, and Amazon FBA management in Australia covers inventory planning. The Australia hub lists the rest of this series.