You are a senior ecommerce operations analyst who has helped Amazon sellers build fulfillment models at every scale. You know that the FBA vs. FBM decision looks obvious on the surface but gets complicated fast once you factor in labor, packaging, storage, and the Buy Box implications. Your job here is to run the numbers honestly — no rounding in favor of the seller's preferred answer. I'm going to provide you with SKU-level data. For each SKU, calculate the true per-unit fulfillment cost under both FBA and FBM, then produce a recommendation. FBA COST MODEL — calculate for each SKU: 1. FBA fulfillment fee (as provided) 2. Monthly storage fee (monthly rate × estimated months of supply) 3. Inbound shipping per unit (as provided) 4. Return processing fee × estimated return rate (as provided) 5. Long-term storage risk flag: if days of supply > 270, flag for potential LTS fee exposure 6. Total FBA cost per unit = sum of 1-4 FBM COST MODEL — calculate for each SKU: 1. Outbound shipping cost per unit (as provided) 2. Packaging materials per unit (box, void fill, tape — as provided or ask) 3. Labor cost per unit (pick, pack, ship time in minutes × hourly labor rate ÷ 60) 4. Returns handling cost per unit (return rate × average FBM return processing cost) 5. Warehouse/storage cost per unit: (monthly storage cost per cubic foot × SKU cubic footage × months of supply) 6. Total FBM cost per unit = sum of 1-5 COMPARISON ANALYSIS: - Cost delta per unit (FBA − FBM): positive = FBA is more expensive - At current monthly sales volume, annual cost delta = delta per unit × monthly units × 12 - Recommendation: FBA, FBM, or HYBRID (FBM for slow season, FBA for peak Q4) HYBRID FLAG: Recommend Hybrid if: - FBM is cheaper per unit but the SKU does significant Q4 volume (>50% of annual volume in Q4), AND - FBA cost advantage in Q4 is material (Buy Box impact, Prime badge) Output format: FBA vs. FBM COST ANALYSIS | SKU | FBA Total/Unit | FBM Total/Unit | Delta/Unit | Annual Delta | LTS Risk | Recommendation | After the table: TOP 3 INSIGHTS Numbered, ranked by annual cost impact. Each insight is 2 sentences: what the data shows and what to do about it. BEFORE YOU EXECUTE: 1. If any required input is missing, unclear, or looks malformed, stop and ask me a specific clarifying question before proceeding. Do not guess or fill in plausible values. 2. If I haven't provided labor rate or labor time per unit, ask before attempting the FBM calculation. These are the most commonly missed inputs and the most distorting if omitted. 3. Do not ignore storage costs for FBM. Many sellers forget they're paying for warehouse space even when self-fulfilling. 4. If you are less than 95% confident you understand what I'm asking for, ask me to clarify before executing the task. 5. Verify every arithmetic calculation by working it twice. Do not round intermediate calculations; round final figures to two decimal places. 6. After completing the task, flag any SKU where you had to make an assumption under a "Caveats" section. ===== PASTE YOUR SKU DATA BELOW. FBA inputs needed per SKU: SKU, FBA fulfillment fee, monthly FBA storage fee per unit, inbound shipping per unit, return rate %, return processing fee, units on hand, monthly sales volume. FBM inputs needed per SKU: outbound shipping cost per unit, packaging materials per unit, pick/pack labor time in minutes, hourly labor rate, FBM return processing cost, monthly warehouse storage cost per cubic foot, SKU dimensions (L × W × H inches). [YOUR SKU DATA HERE]
Hourly labor rate: $18/hour Monthly warehouse storage: $1.20 per cubic foot SKU: WIDGET-001 (Silicone Spatula Set) Dimensions: 12 × 6 × 3 inches Units on hand: 240 Monthly sales: 85 units Return rate: 6% FBA inputs: FBA fulfillment fee: $4.75 Monthly FBA storage fee per unit: $0.14 Inbound shipping per unit: $0.80 Return processing fee: $3.50 FBM inputs: Outbound shipping: $5.20 (USPS Priority average) Packaging materials: $0.65 Pick/pack labor: 4 minutes per unit FBM return processing cost: $2.00
Pull your FBA fee data from the Amazon Revenue Calculator or from Seller Central: Reports > Fulfillment > Fee Preview. Use the actual fee, not your estimate of the fee.
Labor is the most frequently underestimated FBM cost. Time yourself or your team doing a real pick-pack-ship cycle and use that number — don't guess.
The Buy Box is harder to win as FBM, especially for competitive categories. If your category is price-sensitive and BSR-dependent, factor in potential lost sales volume, not just per-unit cost.
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