Amazon logistics models: FBA, FBM, EFN and Pan-EU

Why the choice of logistics model matters

On Amazon it is not enough to have a good product and an attractive price. Sales success is enormously determined by logistics: how fast and smoothly the product reaches the customer and what after-sales service looks like. Amazon has built its edge for years precisely on reliable delivery, and that is why it rewards sellers able to guarantee the Prime standard: lightning-fast shipping, hassle-free returns and full customer service.

This means the choice of logistics model — FBA or FBM and EFN or Pan-EU — translates not only into convenience of operation, but also into real business results. It determines whether your offers get the Prime badge, what visibility in search results they will have, and even whether you win the coveted Buy Box.

What is more, logistics directly affects costs and margin:

• in FBA you have to reckon with storage and fulfilment fees, but in return you gain higher conversion and less operational work,
• in FBM costs are more under control, but all responsibility for shipping and returns falls on you,
• at a European scale EFN gives a simple start from one warehouse,
• while Pan-EU opens the road to maximum sales, but comes with additional tax obligations.

So before you decide on any of the models, it pays to look at them from the perspective of a company starting out and planning expansion across Europe. Each has its strengths and limitations, and understanding them lets you map out a growth path: from the first orders to full pan-European sales.

What FBA and FBM are

On Amazon you can sell your products in two main logistics models: FBA (Fulfillment by Amazon) and FBM (Fulfilled by Merchant). This decision determines who is responsible for storing the goods, packing, shipping and after-sales service.

FBA: Fulfillment by Amazon

In the FBA model you ship your products to Amazon’s warehouses. From that moment all logistics is on the platform’s side:

• picking and packing orders,
• delivery to the customer,
• returns handling,
• customer support in the local language.

Products shipped through FBA get the Prime badge, which translates into higher conversion, greater customer trust and better chances of winning the Buy Box. For many sellers this is the simplest way to scale sales quickly across Europe.

FBM: Fulfilled by Merchant

In the FBM model you are responsible for the whole process:

• you store goods in your own warehouse,
• you pack and ship orders,
• you handle returns and customer questions yourself.

You gain full control over logistics and costs, but your offers do not automatically get the Prime badge. The exception is the Seller Fulfilled Prime (SFP) programme, which lets a seller offer Prime with their own logistics; in Europe, however, it is limited and hard to access, especially for new accounts.

In practice FBA gives greater scaling potential and higher sales, while FBM works where full control and flexibility matter, e.g. for large, heavy or niche products.

Pros and cons of FBA

The Fulfillment by Amazon model has several strengths that make most sellers use it sooner or later.

FBA advantages:

• Prime and higher conversion: the Prime badge gives customers a guarantee of fast, reliable delivery, which often significantly lifts sales.
• Customer service and returns on Amazon’s side: fewer operational duties for the seller.
• Fast scaling: easier to enter new markets without building your own logistics in every country.
• Better Buy Box chances: Amazon favours FBA offers, especially at competitive prices.

FBA disadvantages:

• Storage and fulfilment fees: they must be factored into the margin, or profitability quickly drops.
• Long-term storage: additional costs for products that sit in the warehouse for over a year.
• Inbound logistics: you add the preparation and delivery of stock to Amazon’s warehouses.
• Stock management: too little stock means lost sales, too much generates storage costs.

When does FBA pay off? For light or medium-sized products with predictable demand and a good margin. It is also the best choice for companies that want to enter many markets at once and need a scalable solution.

Pros and cons of FBM

In the Fulfilled by Merchant model the seller is responsible for all logistics processes. This gives full control, but also full responsibility.

FBM advantages:

• Full control over costs and packing: you can negotiate rates with carriers and optimise processes.
• No FBA fees: we do not pay for Amazon’s warehouse, we use our own resources.
• Flexibility: easier to test niche products that sell irregularly or have unusual dimensions.

FBM disadvantages:

• No Prime: offers without Prime usually sell worse and it is harder to win the Buy Box.
• Customer service and returns on the seller’s side: a bigger operational load.
• High SLA requirements: every shipping delay lowers account health.
• Scaling: entering many EU markets requires organising your own international logistics.

When does FBM pay off? Right at the start, when you want to test the market without incurring high costs, or for large and heavy products where FBA can be unprofitable. It is also a good choice for companies that already have well-organised logistics of their own and want to keep full control.

EFN and Pan-EU: international logistics in the EU

Once we decide on the FBA model, another question appears: how to handle sales across Europe? Amazon offers two main options here: EFN (European Fulfillment Network) and Pan-European FBA (Pan-EU). Both let you sell in many countries, but they differ in how they work, in costs and in tax requirements.

EFN: European Fulfillment Network

In EFN you ship your stock to one chosen FBA warehouse, e.g. in Poland or Germany. Amazon stores products in that location and fulfils customer orders from there, including from other EU countries.

EFN advantages:

• Simple start: one warehouse, fewer formalities.
• Lower entry barriers: no need to register for VAT in many countries right away.
• Flexibility: easy to test demand on different markets before deciding on full expansion.

EFN disadvantages:

• Higher cross-border rates: Amazon adds fees for international shipments.
• Longer delivery times: a customer in France gets a parcel from Germany or Poland, not from a local warehouse.
• Lower conversion: offers without local shipping sometimes lose to Pan-EU competition.

Pan-European FBA (Pan-EU)

In Pan-EU FBA, Amazon itself replicates your stock across many warehouses in Europe, e.g. in Germany, France, Spain, Italy, Poland or the Czech Republic. Customers then receive products from the nearest distribution centre, which guarantees local, fast delivery.

Pan-EU advantages:

• Prime and the best conversion: fast delivery increases customer trust.
• Lower last-mile costs: local shipments are cheaper than cross-border ones.
• The greatest sales potential: offers compete as local ones, which increases visibility.

Pan-EU disadvantages:

• VAT and compliance: if Amazon distributes stock across several countries, you must register for VAT in each of them and keep separate accounts.
• EPR (Extended Producer Responsibility): in France or Germany, for example, additional environmental obligations apply.
• More formalities and accounting: Pan-EU requires good administrative preparation.

A typical path for companies expanding into the EU

For many sellers the optimal scenario looks like this:

• Start with EFN: you ship stock to one warehouse (most often DE), test demand and verify margins.
• Move to Pan-EU: once you have bestsellers and stable rotation, you enable stock replication, register for VAT in several countries and expand your logistics.

This approach minimises risk at the start while preparing the company for full European expansion at the point where sales begin to pay off.

How to choose the best model to start

The decision whether to go for FBA, FBM, EFN or Pan-EU is not universal: it depends on the product, the margin and your operational capacity. Before you choose, it pays to answer a few key questions.

1. What is your margin?

If the margin is high enough to comfortably “carry” the FBA fees (storage, fulfilment, returns), then this model usually turns out the best choice. Prime and better conversion typically compensate for the additional costs. At a low margin FBA can be hard to maintain, and FBM will let you keep more control over profitability.

2. What are the product’s dimensions and weight?

• Small and medium products, easy to store and pack, are ideal for FBA: fulfilment costs are predictable and fast shipping increases sales.
• Large and heavy products (e.g. furniture, sports equipment) can be too costly in FBA. In such cases FBM is more profitable, because it eliminates Amazon’s high logistics fees.

3. What is the demand and rotation?

• Steady, predictable sales: FBA works best, because regular rotation lets you avoid high storage fees.
• Irregular sales: it pays to test FBM or send only a small amount of stock to FBA, so as not to risk excess costs.

4. What are your expansion plans?

• If your goal is fast entry into the European market, start with EFN. You ship stock to one warehouse (e.g. in Germany), and Amazon fulfils orders across the EU.
• Once you know which products sell best, you can move to Pan-EU and fully exploit the potential of local deliveries, Prime and lower last-mile costs.

5. What operational resources do you have?

• If you do not want to build your own logistics department, FBA takes shipping, returns and customer service off your hands.
• If you already have an efficient warehouse, staff and processes, you can comfortably operate in FBM and control costs yourself.

A practical direction for the first 90 days

It is best to arrange the launch as a test that gives quick data for decisions:

• Choose 2–3 products with the greatest potential (good margin, predictable demand) and place them in FBA + EFN. You will immediately gain the Prime badge, faster sales and the ability to run Sponsored Products ads.
• Sell the rest of the assortment in FBM. This lets you check what really rotates, without the risk of additional storage fees.
• After 60–90 days analyse the results: which products sell best, where rotation is strongest, what the real margin is.
• Move the bestsellers to Pan-EU to increase sales and improve conversion across Europe. Leave weaker products in FBM or in a limited quantity in FBA.

This approach minimises risk while letting you quickly exploit the Prime potential and build scale where it really pays off.

Logistics costs: a quick comparison

On Amazon logistics is not only the choice of model, but also the concrete costs you must factor into your margin. The table below shows a simplified comparison to help you grasp the differences between FBM, FBA with EFN and FBA with Pan-EU.

Note: this is an illustrative model. In practice the rates depend on the market, product dimensions and weight, the season (e.g. more expensive storage in Q4), and the current price lists of Amazon and courier companies.

A mini-calculator for thinking about cost

• FBM cost per order ≈ courier shipping (domestic/EU) + carton/wrap + warehouse work + returns handling.
• FBA cost per order ≈ pick & pack fee + storage (per m³/month, with higher rates in Q4) + inbound (delivery to FBA) + any long-term fees.
• EFN vs Pan-EU: EFN means a surcharge for cross-border shipments, Pan-EU means lower “last mile” costs but with VAT/EPR obligations in many countries.

The simplest rule is this: 👉 if, after subtracting the Amazon commission + logistics costs (FBM/FBA/EFN/Pan-EU) + the average PPC advertising cost, you are left with your target gross margin, the model is healthy. If not, it pays to change the packaging, carrier rate, price or the logistics model itself.

FAQ: quick answers to help you decide

Finally, we have gathered a few of the most frequently asked questions that come up among sellers planning an Amazon launch. These are short answers to help you clear up doubts and decide faster whether to choose FBA or FBM, and where to start your European expansion.

Is FBA always better than FBM? Not always. FBA usually gives higher conversion and an easier path to the Buy Box, but can be unprofitable for large, heavy or low-rotation products. FBM works where you have a cost advantage in your own logistics or want to test niches.

EFN or Pan-EU to start? The most commonly recommended scenario is EFN for the launch: one warehouse and a demand test. Once you know which products sell and have a healthy margin, you move to Pan-EU for the bestsellers.

Does Pan-EU require VAT in several countries? Yes. If Amazon replicates stock to warehouses in different countries, you must register for VAT in each of them (and in some also for EPR). It requires a plan and additional accounting, but in return gives the highest conversion and local Prime delivery.

Can we have Prime with FBM? In theory yes, through the Seller Fulfilled Prime (SFP) programme. In practice, access to it in the EU for new accounts is heavily restricted. That is why most companies use Prime exclusively through FBA.

Which path we recommend to start

From experience we know the best results come from a mixed model at the start: so that on one hand you catch Prime and quickly check the sales potential, and on the other you do not freeze capital in Amazon’s warehouses.

The practical plan looks like this:

• Choose 2–3 products (SKUs) with the highest margin and predictable demand. These should be your Amazon “pilots”.
• Launch FBA + EFN for these products: you gain Prime, better conversion and access to Sponsored Products ads.
• List the rest of the assortment in FBM to check what actually rotates, without the risk of additional storage costs.
• Monitor the results over the first 60–90 days: conversion, margin and advertising costs.
• Move the bestsellers to Pan-EU: this is the moment to scale sales in Europe and prepare the VAT/EPR registrations.
• Weaker products leave in FBM or in limited FBA, so they do not burden you with long-term storage fees.

👉 This path lets you enter Amazon quickly, limit financial risk and at the same time prepare the ground for pan-European expansion.

Frequently asked questions (FAQ)

Everyone starting their Amazon selling journey has similar doubts. Many of them recur in conversations with our clients, so we have gathered the most frequent questions and answers. This will make it easier to avoid misunderstandings and prepare better for launch.

Can I sell on Amazon without a company? In theory yes, but only on the Individual plan and at a very small sales scale. If you want to grow a business, a company and a VAT number are practically essential.

How long does Amazon Seller account registration take? Usually two to five business days. If the documents are illegible or the data does not match what you entered in the form, the process can drag on to a few weeks.

Does one account work across the whole of Europe? Yes, Amazon offers the European Unified Account. It lets you sell on all EU markets from a single panel. If you store goods outside your home country, though, you must remember to register for VAT there.

Can I change the sales plan later? Yes, you can switch from Individual to Professional and back at any time. In practice most sellers who start on the Individual plan very quickly move to Professional.

Is an Amazon Seller account free? No. You either pay about €0.99 per sale on the Individual plan, or a monthly subscription of €39 on the Professional plan. On top of that come commissions and any logistics fees if you use FBA.

How does Amazon pay sellers? As standard, transfers reach the designated bank account every two weeks. In some cases Amazon may withhold funds longer, e.g. when the account is new or complaints appear.

Does Amazon require a VAT number? At the early stage of selling in your home country not always, but if you plan to use FBA or sell in several countries, VAT becomes a necessity. It pays to register right away to avoid blocks.

What is the Buy Box and do I need it? The Buy Box is the “Add to cart” button the customer sees on the product page. Only one seller can win it, and Amazon chooses it based on price, availability and service quality. Without the Buy Box your product is still visible, but selling is much harder.

Summary and next steps

Selling on Amazon is not only listing a product, but above all choosing the right logistics model. Each option has its strengths and limitations:

• FBA: higher conversion, Prime and easier scaling; the key is calculating the fees well and watching stock rotation.
• FBM: full control and flexibility; works for testing, oversized products and when you have your own logistics.
• EFN: the simplest way to start selling in Europe from one warehouse.
• Pan-EU: a turbo for bestsellers, giving the highest sales and best conversion, but requiring VAT registration and meeting EPR obligations in several countries.

👉 If you want, we will help you match the model to your SKUs, calculate the real costs and set up your first Amazon shipments.

Contact us →