Fulfillment by Amazon
Fulfillment by Amazon (FBA) is an order fulfillment service operated by Amazon that allows third-party sellers to outsource storage, packing, shipping, returns processing, and customer service to Amazon's fulfillment network.
History
Fulfillment by Amazon was launched on September 19, 2006, alongside WebStore by Amazon. The service expanded Amazon's third-party marketplace by allowing businesses to use Amazon's warehouse and logistics infrastructure for order fulfillment.[1][2]
In the following years, FBA expanded internationally through programs including FBA Export (later renamed Amazon Global Export), Pan-European FBA, Multi-Country Inventory (MCI), and the European Fulfilment Network (EFN), which enabled sellers to distribute inventory across multiple Amazon marketplaces. Amazon also introduced Multi-Channel Fulfillment (MCF), allowing sellers to use FBA inventory to fulfill orders placed through external sales channels such as Shopify and eBay.[3]
In 2018, Amazon introduced the Inventory Performance Index (IPI), a scoring system measuring seller inventory efficiency. Sellers below a specified threshold could face restrictions on additional inventory shipments to fulfillment centers. By 2020, sellers had used FBA to fulfill more than 5.5 billion orders in the United States.[4]
In late 2023 and early 2024, Amazon revised its FBA fee structure by introducing an inbound placement service fee, a low-inventory-level fee, and updated aged inventory surcharges, while reducing standard fulfillment fees for standard-size products by an average of US$0.20 per unit.[5]
In 2026, Amazon announced Amazon Supply Chain Services (ASCS), which expanded Amazon's freight, distribution, fulfillment, and parcel shipping infrastructure to businesses not selling on Amazon's marketplace.[6][7]
Operations
FBA operates on a fee-based model in which sellers ship inventory to Amazon fulfillment centers, where Amazon stores products and manages picking, packing, shipping, returns, and customer service after orders are placed. Amazon also offers optional prep and labeling services for products requiring additional preparation through a Recommended Prep Service Providers program.[8][9]
FBA fees include per-unit fulfillment fees based on product size and weight, monthly storage fees based on cubic footage, inbound placement service fees, aged inventory surcharges for goods stored longer than 181 days, and low-inventory-level fees. Storage capacity is managed through the Inventory Performance Index, which scores sellers from 0 to 1,000 using metrics related to excess inventory, stranded inventory, and in-stock rates.[10]
Through Pan-European FBA, sellers can store inventory in France, Germany, Italy, Spain, or Poland, while Amazon redistributes inventory among participating countries based on projected demand.[11]
References
- ↑ "Amazon Launches New Services to Help Small and Medium-Sized Businesses Enhance Their Customer Offerings by Accessing Amazon's Order Fulfillment, Customer Service, and Website Functionality". US Press Center. September 19, 2006.
- ↑ "History of Amazon.com".
- ↑ "FBA international | Sell on Amazon".
- ↑ Milliot, Jim. "Taking a Closer Look at the FTC Lawsuit Against Amazon". Publishers Weekly.
- ↑ Connolly, Brian. "How Amazon's New 2024 Fee Structure Affects Sellers".
- ↑ "Amazon opens its supply chain network to everyone - Supply Chain Management Review".
- ↑ https://www.reuters.com/business/retail-consumer/amazon-opens-up-its-logistics-network-other-businesses-2026-05-04/
- ↑ "Amazon FBA (Fulfillment by Amazon) | Sell on Amazon". m.media-amazon.com.
- ↑ Pellecchia, Mitchell. "Parkland Entrepreneur Leads Logistics Firm to National Recognition".
- ↑ "The science behind the new FBA capacity management system". September 19, 2023.
- ↑ "Impact of Brexit on Amazon FBA". August 14, 2020.
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