Fulfilled by Amazon (FBA) — Definition, Fulfillment Scope, Fees & Risk Controls (2025) Updated Dec 2025

Fulfilled by Amazon (FBA) is a fulfillment execution model where a seller sends inventory into Amazon’s fulfillment network, and Amazon performs the downstream operational work: storage, picking, packing, shipping, plus customer service and returns processing.

In a modern e-commerce architecture, FBA should be treated as a fulfillment execution layer inside an order lifecycle — not a business guarantee. It improves delivery speed and customer experience, but it also introduces constraints (capacity limits, inbound rules, fee schedules, and compliance friction) that sellers must actively manage.

FBA is usually a strong fit when:

• Demand is stable and reorder timing is predictable (reduces aging exposure).
• Units are standard-size and packaging is consistent (reduces fee surprises and inbound variance).
• Return handling is heavy and you prefer Amazon to absorb customer service load.
• Prime conversion uplift matters more than marginal fulfillment cost differences.

FBA is usually a poor fit (or needs a hybrid plan) when:

• SKU is oversized / DIM-sensitive where small packaging changes can swing unit economics.
• Demand is seasonal or volatile and inventory can sit beyond healthy turn cycles.
• Cross-border compliance risk is high (traceability/documentation may be audited or detained).
• SKU has frequent variants/bundles that create labeling, prep, or commingling complexity.

Low inventory level fee (stockout-risk surcharge)

Amazon applies a low-inventory-level fee in certain cases when inventory coverage is low relative to demand. This is charged in addition to the base FBA fulfillment fee. Always check the latest Seller Central help page for scope and exemptions.

Reference: Amazon Seller Central — Low-inventory-level fee

Aged inventory surcharge (aging cost)

Inventory that sits too long in the fulfillment network can incur aging-related surcharges. This is fundamentally an inventory planning problem, not a “warehouse problem.” If your turn cycle is drifting upward, FBA fees will punish you.

Reference: Amazon Seller Central — Aged inventory surcharge

IPI / capacity limits (space access control)

Amazon uses an Inventory Performance metric system to influence storage capacity. The “minimum IPI threshold” has changed historically in different periods; sellers should treat it as a variable control and plan with buffer (don’t aim for the bare minimum).

Practical reading: Industry commentary notes Amazon has adjusted minimum thresholds in the past; do not build your model on a single fixed number.

• Inbound shipment rejection: labeling/prep mismatch → appointment delays → inventory misses sales windows → fees rise.
• Misrouting / FC fragmentation: inventory distributed across multiple FCs → split shipments → higher per-order cost + slower replenishment clarity.
• Inventory aging trap: slow sell-through → aging surcharge and/or forced removals → liquidation destroys margin.
• Low-supply surcharge loop: chronic understocking triggers low-inventory fees while stockouts reduce ranking → demand volatility increases.
• Returns compounding loss: high return SKUs create hidden cost through disposition outcomes (sellable vs unsellable) and delayed resale.
• Compliance interruption: documentation gaps escalate into holds/detentions → inventory becomes “present but unavailable” operationally.
• Pack-size / DIM economics break: small packaging change shifts fee tier → unit economics flip negative even when sales hold steady.

• Fulfilled by Merchant (FBM)
• Order Fulfillment
• Inventory Allocation
• Safety Stock Buffer
• Order Routing Rules
• Split Shipment
• Inbound Performance
• FBA Removal Order
• Customs Clearance
• Chargeback

• Inbound Shipment Rejection
• Stranded Inventory
• Aged Inventory Surcharge
• Low-inventory-level Fee
• Removal Order Cost
• DIM / Size-tier Fee Shock
• UFLPA Detention Risk