A service provided by Amazon where third-party sellers store their inventory in Amazon’s fulfillment centers, with Amazon handling all storage, picking, packing, shipping, customer service, and returns processing. This program allows businesses to leverage Amazon’s vast logistics network and Prime shipping benefits without maintaining their own warehouse operations.
FBA significantly impacts warehouse strategy decisions, as businesses must choose between investing in their own fulfillment infrastructure or outsourcing to Amazon’s network. While FBA offers scalability and reduced operational complexity, it also means surrendering direct control over inventory management and customer experience. For example, a small electronics retailer might use FBA to access Prime customers and avoid warehouse overhead, but may struggle with inventory visibility and storage fee optimization. Understanding FBA’s operational model helps warehouse managers evaluate when in-house fulfillment provides better control, cost efficiency, or customer service capabilities compared to Amazon’s outsourced solution.
