Fulfilment by Amazon (FBA) is Amazon's end-to-end fulfilment service: the seller ships inventory to Amazon's fulfilment centres (FCs); Amazon handles pick + pack + ship to the customer + customer service + returns. The trade-off: per-unit fulfilment fees + storage fees vs the operational simplicity + Prime eligibility + Buy Box advantage.
Operationally, FBA performance is governed by: Inventory Performance Index (IPI), Restock Limit per region, FBA inbound shipment planning, stranded inventory, excess inventory. Brands operating FBA at scale run weekly IPI review + inventory-action playbook.
FBM (Fulfilment by Merchant) is the alternative: the seller fulfils directly. Right for low-velocity tail SKUs, oversized items, or SKUs where the margin doesn't support FBA fees. The enterprise pattern is hybrid: FBA for high-velocity core SKUs, FBM for tail.