Amazon FBA vs FBM in 2025: Pros, Cons & VAT Compliance

Amazon FBA vs FBM in 2025 explained: Compare costs, pros & cons, and VAT compliance tips to choose the right model for your Amazon business.

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Introduction: Why Amazon FBA vs FBM Matters for Sellers

When starting out on Amazon, one of the first questions sellers face is Amazon FBA vs FBM. In 2025, this decision is more important than ever—not only for logistics and costs but also for VAT compliance in Europe. Choosing the right model can determine how quickly you grow and how smoothly you manage your tax obligations.

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What Is Amazon FBM?

Fulfilment by Merchant (FBM) means sellers are responsible for storing, packing, and shipping their products themselves—or through a third-party logistics provider.

How FBM works:

• You list products on Amazon.

• You store goods in your own warehouse or with a logistics partner.

• You handle shipping, returns, and customer service.

👉 FBM suits sellers with niche products, small sales volumes, or low margins where Amazon’s fulfilment fees would cut too heavily into profits.

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What Is Amazon FBA?

Fulfilment by Amazon (FBA) means Amazon takes care of storing, packing, and delivering your products, as well as customer service and returns.

How FBA works:

• You ship products to Amazon’s fulfilment centres.

• Amazon stores and ships items to customers when orders come in.

• Amazon provides Prime shipping and handles returns.

👉 FBA is ideal for sellers with high sales volumes or who want fast access to Amazon Prime customers.

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Amazon FBA vs FBM: Key Differences

When comparing Amazon FBA vs FBM, sellers should consider:

1. Costs

• FBA: Storage fees, fulfilment fees, and long-term storage charges.

• FBM: Shipping and warehousing costs vary, but no FBA fees.

2. Control

• FBA: Amazon controls logistics and customer service.

• FBM: You manage everything, offering more flexibility.

3. VAT Compliance

• FBA: Storing goods in Amazon warehouses across the EU often requires multiple VAT registrations (e.g. Germany, Poland, France).

• FBM: VAT registration usually depends only on sales thresholds or local sales, not storage obligations.

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VAT Compliance: A Hidden Factor in FBA vs FBM

For European sellers, the choice between Amazon FBA vs FBM goes beyond logistics. VAT plays a critical role:

• FBA Sellers must register for VAT in each country where goods are stored. For example, storing stock in Germany or Poland under the Amazon Pan-EU program triggers local VAT obligations.

• FBM Sellers usually only need VAT registration in their home country or where distance selling thresholds apply.

👉 Tip for sellers: Using hellotax ensures you don’t miss VAT obligations when expanding with FBA or FBM. Our automated tools track thresholds, register you in new countries, and file VAT returns on time.

💡 Want to learn more about Amazon FBA? On the hellotax blog, we regularly publish articles that dive deeper into different aspects of Amazon FBA—from VAT registration requirements to Pan-EU programs and compliance tips. Explore our related guides here to get practical insights tailored to online sellers.

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Pros and Cons at a Glance

Advantages of FBA

• Access to Prime customers

• Amazon handles storage, shipping & customer service

• Faster delivery across Europe

Advantages of FBM

• Lower costs if margins are small

• Full control over shipping and branding

• Flexibility with carriers and inventory management

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Conclusion & Key Takeaway

The decision between Amazon FBA vs FBM depends on your business model, sales volume, and VAT compliance needs.

• Choose FBA if you want scalability, access to Prime, and fast delivery—just be ready for multiple VAT registrations.

• Choose FBM if you prefer control, lower upfront costs, and simpler VAT obligations.

Key takeaway: Amazon FBA vs FBM is not just about logistics—it’s also about staying VAT compliant. With hellotax, sellers can automate VAT registrations, filings, and compliance across Europe, freeing up time to focus on growth.

👉 Book a free consultation today and let hellotax handle VAT compliance for your Amazon business.