Ecommerce

FBA (Fulfilled by Amazon)

Amazon's logistics service — sellers ship inventory to Amazon warehouses, Amazon handles storage, packing, shipping, returns, customer service.

FBA is the engine behind Amazon's 1-day and 2-day delivery. Sellers send inventory to FBA fulfillment centers (FCs); Amazon stores it, picks/packs orders, ships to customers, handles returns, manages customer service.

For Indian D2C brands: FBA opens up Amazon Prime eligibility (the Buy Box dominantly goes to Prime + FBA listings), reduces shipping cost (Amazon's negotiated rates), but charges fulfillment fees (₹40-150/order based on size) + storage fees (per cubic foot per month).

Alternative: Easy Ship (FBA Lite) where seller stores inventory but Amazon picks up + delivers. Cheaper than FBA but no Prime eligibility.

India context

Indian D2C brands on Amazon: FBA wins on Prime eligibility but eats into margin. Easy Ship preserves margin but loses Prime conversion lift. Most ₹1Cr+ Indian brands run hybrid — FBA for top 20% SKUs (Prime conversion), self-fulfill rest.

Examples

  • A skincare brand at ₹500 AOV pays ~₹50 FBA fulfillment fee — net 90% margin.
  • Same brand on self-fulfilled: ₹70 shipping + ₹20 packaging = ₹90 cost. FBA cheaper at scale.

FAQ

How much does FBA cost?

Fulfillment: ₹40-150 per order based on size/weight. Storage: ₹13-40 per cubic foot per month (depends on category + season). Removal/disposal fees if products don't sell.

Should I use FBA or self-fulfill?

FBA for high-velocity SKUs (Prime conversion lift = 30-50% on those). Self-fulfill for slow movers (storage fees eat margin). Hybrid is the typical answer.

Does FBA handle returns?

Yes — Amazon handles return acceptance, inspection, and customer refund. Damaged returns are written off (you absorb the loss). High return rates impact your account health.

Related concepts

RTOAOVPrimeBuy BoxEasy Ship

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Related glossary entries

AOV (Average Order Value) — Average rupee value per customer transaction — key revenue lever for ecommerce.RTO (Return to Origin) — Ecommerce metric — % of orders that come back undelivered, typical pain point for COD-heavy Indian D2C.
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