If you’re selling products online, especially to international customers, logistics can become your biggest challenge. Packing, shipping, tracking, returns, and customer support take up valuable time that could be spent growing your brand.
Fulfilment by Amazon (FBA) solves this problem by making it easier to scale, even across borders.
The model also aligns with India’s push for e-commerce exports. Under the E-Commerce Export Hub (ECEH) initiative, the government aims to boost e-commerce exports to USD 100 billion by 2030. Models like FBA support this vision by making international fulfilment more accessible.
Key Takeaways
- Fulfilment by Amazon allows Indian sellers to scale globally without building their own warehousing or logistics network.
- Understanding the full FBA process from inventory shipment to returns is essential to maintain efficiency and control costs.
- Amazon offers multiple fulfilment models FBA, FBM and SFP and each suits a different type of business, so the right choice depends on your margins, branding priorities and logistics capability.
- Fees under the FBA model directly affect profitability, which is why fee awareness and pricing strategy must go hand-in-hand.
- A strong payment system is as crucial as a fulfilment model using export-focused tools can protect margins and make global selling more sustainable.
What Is Fulfilment by Amazon?
Fulfilment by Amazon or FBA is a logistics service where Amazon stores your products in its warehouses and takes full responsibility for packing, shipping, and delivery. When an order comes in, Amazon fulfils it on your behalf using its own systems, delivery network, and customer support teams.
But FBA goes beyond logistics. It also includes:
- Real-time inventory tracking
- 24/7 customer service support on your behalf
- Management of returns and replacements
- Faster Prime-eligible delivery in many countries
As a result, your business appears more reliable to buyers, especially international customers who expect quick delivery and strong customer support. With FBA, you gain access to Amazon’s global network of fulfilment centres, which helps Indian sellers compete with established brands worldwide without needing physical infrastructure abroad.
Related Read : Razorpay is now Amazon-approved: Take your e-commerce business to the world with MoneySaver Export Account
How Does FBA Work?
FBA operates through a structured process starting from inventory shipment and continuing all the way to customer support and returns. Here’s how it works step by step:
1. Seller Enrollment and Inventory Shipment
To start, you must create a seller account on Amazon and enrol in the FBA programme. Once enrolled, list your products and prepare your inventory as per Amazon’s packaging and labelling guidelines. Then ship the products to Amazon’s designated fulfilment centre either on your own or through Amazon’s partnered carriers.
To ship smoothly:
- You must have a valid GST number
- Products must carry scannable barcodes
- Sending inventory in bulk helps reduce shipping costs
Related Read : Why Offer Free Shipping? Tips to Boost Sales and Profit
2. Amazon Warehousing and Storage
After the inventory reaches the warehouse, Amazon takes over. The products are scanned, stored and tracked within its system, and stock levels are updated in real time through the Seller Central dashboard. Storage fees are calculated monthly based on the space used, and specialised climate-controlled areas are available for sensitive or regulated items.
3. Order Processing and Packaging
Whenever a customer places an order, Amazon picks the product from storage, packs it based on its own quality standards and prepares it for dispatch. This reduces chances of order errors and speeds up fulfilment which directly improves customer satisfaction.
4. Shipping and Delivery to Customers
Once the order is packed, Amazon’s logistics network takes full control. They assign the best delivery route, handle dispatch, and update tracking details automatically. If your product qualifies for Amazon Prime, it appears higher in search results and becomes eligible for faster delivery. Customers also receive real-time updates on their order status. This reduces follow-up queries and builds credibility for your brand.
5. Returns and Customer Service Handling
FBA also manages post-sales interactions. If a buyer requests a return or replacement, Amazon takes care of communication, shipping and refunds. Returned items are inspected, and customer queries are handled through Amazon’s 24/7 support team.
Explore Razorpay’s Global Payment Solutions
The Pros and Cons of Using Amazon FBA
The Advantages: Why Sellers Choose FBA
FBA is preferred by many Indian exporters and e-commerce sellers for one reason: it reduces the friction of fulfilment. Here’s what makes it attractive:
- Prime Eligibility – Products stored with FBA become eligible for Amazon Prime, increasing visibility and improving chances of conversion.
- Scalable Logistics – You don’t need to build your own warehousing or delivery system. Amazon handles logistics as you grow.
- Faster International Reach – FBA centres in the US, UK, EU, UAE, and other markets help you ship products closer to your buyers.
- Customer Support & Returns – Amazon manages customer queries and returns, reducing your operational workload.
- Pay-as-You-Go Model – You pay only for storage and fulfilment, so there’s no heavy upfront investment.
Pro Tip: For exporters, using FBA along with Amazon Global Selling can simplify customs documentation and improve visibility in international markets.
The Disadvantages: What to Watch Out For
FBA isn’t ideal for every seller. Certain businesses may face cost and control limitations:
- Storage Fees Can Add Up – Products that don’t sell quickly may attract high long-term storage fees.
- No Direct Control on Packaging – Amazon uses standard packaging, which limits branding opportunities.
- Returns Are Frequent – Amazon has a customer-first policy, which means easier returns and higher reverse logistics costs.
- Not Always Suitable for Low-Margin Products – If your margins are thin, FBA fees may reduce profitability.
A Breakdown of the Fee Structure
Understanding Amazon FBA fees is essential before choosing it as your fulfilment model. These costs directly affect your profit margins, especially when you export products or sell in bulk. Here’s a clear breakdown of the major fees involved.
1. Seller Fees
Amazon generally charges around 8%–15% of the product price as the standard selling fee. The percentage varies based on the product category, and additional deductions may apply during refunds. This makes it important to plan pricing strategically, especially for products with tight margins. Seller fees are the base cost of using the Amazon platform separate from fulfilment, storage or shipping charges and should always be considered before listing any product.
2. Fulfilment Fees
These charges cover picking, packing, shipping, handling and other logistics tasks carried out by Amazon. The exact fee depends on the size and weight of the product, which means lightweight standard-size items cost less to process, while bulky or heavy products attract higher charges. Since fulfilment is at the core of FBA operations, it’s important to calculate this amount before selecting the model, as it directly affects overall margins and pricing strategies.
3. Monthly Storage Fees
Since your products stay in Amazon’s fulfilment centres until sold, you must pay storage fees. Charges depend on:
- Volume occupied (cubic space)
- Time of year: standard rates from January to September; higher rates during peak season (October–December).
If your inventory doesn’t sell on time, Amazon starts charging monthly storage fees and after 181 days, an aged inventory surcharge is added on top of it. This can quickly reduce your profit margin if slow-moving stock is not cleared or managed properly.
4. International Shipping Fees
Amazon allows sellers to ship inventory globally through its export programmes. When you ship to other countries, additional fees apply for international logistics and customs handling. These charges vary by destination and should be included in pricing when targeting overseas buyers.
Is FBA Right for Your Business? FBA vs. FBM vs. SFP
Amazon offers three fulfilment models. Each works differently, and choosing the right one depends on how much control you want, the margins you operate with, and your capacity to manage logistics.
Below is a comparison to help you take a practical call.
FBA vs FBM vs SFP Key Differences
| Factor | FBA (Fulfilment by Amazon) | FBM (Fulfilled by Merchant) | SFP (Seller Fulfilled Prime) |
| Logistics & Shipping | Fully handled by Amazon | Seller manages shipping & delivery | Seller ships orders but must meet Prime standards |
| Prime Badge Eligibility | Yes, automatic | No | Yes but only if you meet Amazon’s strict fulfilment standards |
| Level of Control | Low – Amazon decides packaging & handling | High – full control over packaging & branding | Medium – branding allowed, but fulfilment rules apply |
| Fees | Storage + fulfilment + returns fee | No Amazon fulfilment fee | Lower fulfilment fees than FBA, but meeting Prime standards may raise logistics costs. |
| Operational Effort | Low | High | Medium to High |
| Best For | Sellers aiming to scale quickly or export | Sellers with strong in-house logistics | Sellers wanting Prime access without using FBA |
How Exporters Can Tackle Global Payment Issues Effectively?
When you start selling globally, payment issues show up very quickly. You deal with currency conversion losses, payment security and compliance requirements like FIRC and purpose codes, and cash-flow strain from slow, expensive settlements. If these are not handled well, even with a strong fulfilment setup, your profits can still take a hit in cross-border e-commerce.
This is where Razorpay’s international payments solution helps. It lets you accept payments from 180+ countries in 130+ currencies smoothly. Here’s how Razorpay addresses each of these challenges with export-ready solutions:
1. MoneySaver Export Account
Razorpay creates virtual local bank accounts (for example, in the US, UK or Europe) so your buyers can pay you via local ACH / bank transfers, while you receive settlements in India. This reduces reliance on costly SWIFT wires and helps you save up to 75% on bank transfer charges, with zero forex markup and no hidden fees.
2. International Payment Gateway
Razorpay’s International Payment Gateway lets you accept global cards, Apple Pay and other international methods with 90–95% success rates and in-built fraud controls. This gives your overseas customers a familiar, one-tap checkout experience while you benefit from higher conversions and India-first support.
3. Automated Compliance
Instead of waiting weeks for your bank, Razorpay provides automated digital FIRC in a few clicks from the dashboard, along with support for shipping bill regularisation and export compliance workflows. This reduces manual follow-ups and keeps your cross-border e-commerce aligned with RBI compliance requirements.
4. Risk & Chargeback Protection
Razorpay’s risk engine uses AI-based fraud detection and offers chargeback support and protection, so you can accept higher-value international orders with more confidence. For exporters dealing with unknown buyers or new markets, this helps you grow without taking on disproportionate payment risk.
Simplify International Payments for Exporters
Accept global payments with lower fees, faster settlements, and built-in compliance.
Move beyond traditional banking with an export-ready payment solution.
FAQs
1. How long does it take for Amazon to ship FBA orders?
Shipping time varies based on location, shipping service and the type of product ordered. FBA orders are usually dispatched quickly, and Prime-eligible items tend to receive priority handling. International deliveries may take additional time due to customs procedures and local regulations.
2. Can international sellers use FBA to sell in the U.S. and other countries?
Yes. Amazon allows international sellers, including those based in India, to use FBA to sell in the U.S., UK, Europe and other supported markets.
3. What are the restrictions on products eligible for FBA?
Hazardous goods, flammable items, expired products, counterfeit goods and certain regulated categories are restricted. Some items require prior approval. Amazon provides an FBA Product Restrictions list in Seller Central, which must be reviewed before shipment.
4. What does an FBA cost for a new seller per month?
There is no fixed monthly cost for FBA, as expenses depend on product type, storage space and order volume. A new seller usually pays for three components the seller account fee, fulfilment fee per order and monthly storage fee
5. What happens if my FBA inventory doesn’t sell?
If stock remains unsold, Amazon charges monthly storage fees and later applies an aged inventory surcharge after 181 days. You can remove or dispose of inventory at an additional per-unit cost to avoid long-term charges.
6. What is FBA eligibility?
FBA eligibility refers to whether a product or seller meets Amazon’s requirements for using the fulfilment service. Products must meet labelling, packaging and category rules, and sellers need valid tax information and compliance documents before enrolling.
