FBA vs FBM Calculator
The FBA versus FBM decision is not settled by comparing profit on one unit. Fulfilled by Merchant almost always looks better per unit because you skip the FBA fulfillment fee, but you take on shipping, packaging, labor, storage, and customer service, and the listing normally loses the Prime badge, which cuts conversion. This calculator builds both profit-per-unit figures, applies your expected conversion drop to the FBM volume, and compares the two on monthly profit, which is the number that actually pays your bills. It also reports the conversion drop at which the two methods break even.
Compare FBA and FBM monthly profit
How the FBA versus FBM comparison works
The calculation runs two independent profit chains and then scales them by the volume each method can realistically achieve. The referral fee is common to both, because Amazon charges it on every sale regardless of who ships the parcel:
- Referral fee = selling price × referral rate. Identical under both methods, so it never decides the outcome; it simply lowers both sides by the same amount.
- FBA profit per unit = price − landed cost − referral fee − FBA fulfillment fee − FBA storage per unit. The fulfillment fee is one bundled charge that already covers picking, packing, carrier postage, customer service, and returns handling.
- FBM profit per unit = price − landed cost − referral fee − your shipping − packaging − labor − your storage. That is five separate line items replacing one, and every one of them is yours to manage.
- FBM units = FBA units × (1 − conversion drop). This is the step most comparisons skip. Removing the Prime badge changes the offer shown to a Prime shopper, and fewer of them buy.
- Monthly profit = profit per unit × units, calculated separately for each method. The larger figure is the winner, and the gap between them is what the decision is worth per month.
- Break-even conversion drop = 1 − (FBA profit per unit ÷ FBM profit per unit). Below that drop FBM comes out ahead; above it FBA does. When FBA already earns more per unit, the result is negative, which means FBM would need higher conversion than FBA rather than lower, and no realistic scenario gets it there.
Two inputs decide most outcomes. The first is labor. Picking, packing, printing labels, answering buyer messages, and handling returns take time, and that time has a price whether or not you invoice yourself for it. A seller who enters $0.00 for labor is not modeling FBM, they are modeling a version of FBM in which they work for free. Take the wage you would pay someone to do the job, divide by the orders they can process in an hour, and use that.
The second is the conversion drop. Sellers who have run the switch on a single listing commonly report declines in the 20-40% range, sharpest on commodity products where multiple offers sit on one detail page and the Prime filter removes you from consideration entirely. Products with strong brand demand, where shoppers search your name rather than a generic phrase, lose less. Treat any figure you have not measured on your own listing as a guess, and test it on one SKU before moving a catalog.
Where FBM genuinely wins
FBM has four repeatable advantages. Oversize and heavy items carry the largest FBA fulfillment fees, so the amount you avoid is largest exactly where FBM is easiest to justify. Slow-turning inventory accumulates monthly storage and, past the aging thresholds, surcharges that FBA levies on top; a SKU that turns twice a year is paying rent at Amazon rates, which is covered in more depth on the storage and aged inventory calculator. High-value or fragile goods benefit from your own inspection and packing standards, and from keeping units out of commingled inventory. Finally, a seller who already leases a warehouse with staff on payroll has fixed costs that are paid whether or not those people ship Amazon orders, which changes the marginal arithmetic considerably.
The middle path is Seller Fulfilled Prime, which lets you ship from your own warehouse while keeping the Prime badge on the listing. It removes the conversion drop from this comparison, which is why sellers reach for it, but it replaces that drop with ongoing performance requirements covering on-time shipment, order cancellation, valid tracking, and weekend delivery capability. Missing those standards can remove the badge anyway, so model Seller Fulfilled Prime with the FBM cost lines and a conversion drop of zero, then ask whether your operation can hold the standard every week rather than in a good week. Requirements change; confirm the current version in Seller Central before committing.
One cost line deserves separate attention under FBM: returns. Under FBA, returns processing is bundled into the fulfillment fee, and Amazon inspects and restocks on your behalf. Under FBM you pay return postage, inspect the unit, and decide whether it can be resold, all with your own hands. If your category returns often, add that expected cost into the labor field or model it directly with the return cost calculator before trusting an FBM comparison.
Worked example: a $24.99 kitchen SKU at 800 units a month
These are the values the calculator loads with, so you can see the method and the widget agree. Figures are illustrative.
- Referral fee, charged under both methods: $24.99 × 0.15 = $3.75.
- FBA profit per unit: $24.99 − $8.20 − $3.75 − $6.10 − $0.12 = $6.82.
- FBM profit per unit: $24.99 − $8.20 − $3.75 − $5.85 − $0.55 − $0.90 − $0.20 = $5.54.
- FBM units after a 25% conversion drop: 800 × 0.75 = 600 units.
- FBA monthly profit: $6.82 × 800 = $5,457.20. FBM monthly profit: $5.54 × 600 = $3,324.90.
- Monthly difference: FBA by $2,132.30, or roughly $25,600 across a year.
- Break-even conversion drop: 1 − ($6.82 ÷ $5.54) = -23.1%. The negative sign is the whole story: FBM would need to convert 23% better than FBA, not merely hold level, before it caught up.
Change one input and the answer flips. Raise the FBA fulfillment fee to $9.50, as an oversize tier might, and FBA profit per unit falls to $3.42, putting FBM ahead on the month even after the conversion loss. That is the test worth running whenever a fee schedule changes, as described in how to read an FBA fee change and reprice for it.
Frequently asked questions
Is FBA or FBM more profitable?
Neither wins by default. FBM usually shows a higher profit per unit because you are not paying the FBA fulfillment fee, but it usually sells fewer units because the listing loses the Prime badge. The method that wins is the one with the higher monthly total, which is profit per unit multiplied by the units each method actually sells.
How much does conversion drop without the Prime badge?
Sellers who have run the switch on the same listing commonly report a conversion decline in the 20-40% range, with the steepest falls on commodity products where several offers compete on the same detail page. Differentiated or brand-searched products lose less. Test the figure on one SKU before assuming it applies to your whole catalog.
Should I include my own labor as an FBM cost?
Yes. Picking, packing, printing labels, answering buyer messages, and processing returns take time whether or not you write yourself a paycheck for it. Enter a realistic hourly rate divided by the orders you can process in an hour. Leaving labor at zero is the single most common reason an FBM model looks better on paper than it performs.
When does FBM actually beat FBA?
FBM tends to win on oversize and heavy items where the FBA fulfillment fee is large, on slow-turning inventory that would accumulate storage and aged inventory surcharges, on high-value or fragile goods you want to inspect before shipping, and for sellers who already run a warehouse whose rent and staff are paid regardless.
What is Seller Fulfilled Prime and how does it change the math?
Seller Fulfilled Prime lets you keep the Prime badge while shipping from your own warehouse, which removes the conversion drop from this comparison. It carries its own entry requirements and ongoing performance standards covering on-time shipment, cancellation rates, and weekend delivery, so treat it as a commitment rather than a switch. Confirm the current requirements in Seller Central.
Sources
- Amazon Seller Central: FBA fulfillment fee schedule, referral fee table, and Seller Fulfilled Prime program requirements (primary source for your exact per-ASIN fees and eligibility).
- Seller Signal analysis. All example figures above are illustrative planning values, not current published rates.