Amazon's Logistics Models—FBA, FBM, EFN, and Pan-EU—Explained Step by Step

Why the Choice of Logistics Model Matters

On Amazon, it's not enough to have an good product and attractive price. Sales success is largely determined by logistics – how quickly and efficiently a product reaches the customer and what the after-sales service looks like. Amazon has been building its competitive advantage for years precisely on reliable delivery and therefore rewards sellers who can provide the Prime: lightning-fast shipping, hassle-free returns, and full customer service.

This means that the choice of logistics model – FBA or FBM and EFN or Pan-EU – it translates not only into operational convenience but also into real business results. It determines whether your listings will receive the Prime, what search result visibility, and even whether you'll win the coveted Buy Box.

What's more, logistics directly impact costs and margin:

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

Therefore, before deciding on any of the models, it's worth looking at them from the perspective of a company starting in Poland and planning expansion in Europe. Each has its strengths and limitations, and understanding them allows you to map out a development path: from initial orders to full pan-European sales.

What are FBA and FBM

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

FBA – Fulfillment by Amazon

In the FBA model, you send your products to Amazon's warehouses. From that point on, all logistics are handled by the platform:

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

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

FBM – Fulfilled by Merchant

In the FBM model, you are responsible for the entire process:

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

You gain full control over logistics and costs, but your listings don't automatically get the Prime badge. The exception is the Seller Fulfilled Prime (SFP), which allows sellers to offer Prime with their own logistics – however, in Europe, it is limited and difficult to access, especially for new accounts.

In practice, FBA offers greater opportunities for scaling and increasing sales, while FBM works best where full control and flexibility, for example, with large, heavy, or niche products.

FBA Pros and Cons

The Fulfillment by Amazon has several strong points that lead most sellers to use it sooner or later.

Advantages of FBA:

• Prime and higher conversion – the Prime badge assures customers of fast and reliable delivery, which often significantly boosts sales.
• Customer service and returns handled by Amazon – fewer operational responsibilities for the seller.
• Rapid scaling – it's easier to enter new markets without having to build your own logistics in each country.
• Better chances for the Buy Box – Amazon favors FBA offers, especially with competitive pricing.

Disadvantages of FBA:

• Storage and fulfillment fees – these must be factored into the margin, otherwise profitability quickly declines.
• Long-term storage – additional costs for products that remain in the warehouse for over a year.
• Inbound logistics – preparation and delivery of inventory to Amazon's warehouses are added.
• Inventory management – too little inventory means lost sales, while too much generates storage costs.

When is FBA profitable?
For light or medium-sized products with predictable demand and good margins. It's also the best choice for companies that want to enter multiple markets immediately and need a scalable solution.

Advantages and disadvantages of FBM

In the Fulfilled by Merchant the seller is responsible for all logistics-related processes. This provides full control but also full responsibility.

Advantages of FBM:

• Full control over costs and packaging – you can negotiate rates with carriers and optimize processes.
• No FBA fees – we don't pay for Amazon's warehouse; we use our own resources.
• Flexibility – it's easier to test niche products that sell irregularly or have unusual dimensions.

Disadvantages of FBM:

• No Prime – offers without Prime usually sell less well and make it harder to win the Buy Box.
• Customer service and returns handled by the seller – increased operational burden.
• High SLA requirements – every shipping delay negatively impacts account health.
• Scaling – entering multiple EU markets requires organizing your own international logistics.

When is FBM profitable?
At the very beginning, when you want to test the market without incurring high costs, or for large and heavy products where FBA can be unprofitable. It's also a good choice for companies that already have well-organized in-house logistics and want to maintain full control.

EFN and Pan-EU – international logistics in the EU

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

EFN – European Fulfillment Network

With EFN, you send your inventory to one selected FBA warehouse – e.g., in Poland or Germany. Amazon stores products in this location and fulfills customer orders from there, including those from other EU countries.

Advantages of EFN:

• Simple start – one warehouse, fewer formalities.
• Lower entry barriers – there's no need to immediately register for VAT in multiple countries.
• Flexibility – it's easy to test demand in various markets before committing to full expansion.

Disadvantages of EFN:

• Higher cross-border rates – Amazon charges fees for international shipments.
• Longer delivery times – a customer in France will receive a package from Germany or Poland, not from a local warehouse.
• Lower conversion – offers without local shipping sometimes lose out to Pan-EU competitors.

Pan-European FBA (Pan-EU)

With Pan-EU FBA, Amazon itself replicates your inventory across multiple warehouses in Europe – e.g., in Germany, France, Spain, Italy, Poland, or the Czech Republic. This ensures customers receive products from the nearest distribution center, guaranteeing local and fast delivery.

Advantages of Pan-EU:

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

Disadvantages of Pan-EU:

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

Typical path for companies from Poland

For many Polish sellers, the optimal scenario looks like this:

1. Start with EFN – you send inventory to one warehouse (most often DE or PL), test demand, and verify margins.
2. Transition to Pan-EU – once you have bestsellers and stable inventory turnover, you enable inventory replication, register for VAT in several countries, and expand your logistics.

This approach allows you to minimize risk at the outset, while simultaneously preparing the company for full European expansion once sales become profitable.

How to choose the best model to start

The decision of whether to opt for FBA, FBM, EFN, or Pan-EU is not universal – it depends on the product, your margin, and your operational capabilities. Before making a choice, it's worth answering a few key questions.

1. What is your margin?

If the margin is high enough to comfortably cover FBA fees (storage, fulfillment, returns), then this model will usually be the best choice. Prime and better conversion typically offset the additional costs.
With low margins, FBA can be difficult to sustain, while FBM allows for greater control over profitability.

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

• Products small and medium-sized, easy to store and pack, are ideal for FBA – fulfillment costs are predictable, and fast shipping increases sales.
• Products large and heavy (e.g., furniture, sports equipment) can be too expensive with FBA. In such cases, FBM is more cost-effective because it eliminates high Amazon logistics fees.

3. What is the demand and turnover?

• Consistent, predictable sales – FBA works best because regular turnover helps avoid high storage fees.
• Irregular sales – it's worth testing FBM or sending only a small amount of inventory to FBA to avoid risking excessive costs.

4. What are your expansion plans?

• If your goal is a quick entry into the European market, start with EFN. You send inventory to one warehouse (e.g., in Germany), and Amazon fulfills orders across the entire EU.
• Once you know which products sell best, you can switch to Pan-EU and fully leverage the potential of local deliveries, Prime, and lower last-mile costs.

5. What operational resources do you have?

• If you don't want to build your own logistics department, FBA will relieve you of shipping, returns, and customer service.
• If you already have an efficient warehouse, staff, and processes, you can comfortably operate with FBM and control costs yourself.

Practical direction for the first 90 days

It's best to structure your start as a test that provides quick data for decision-making:

1. Choose 2–3 products with the greatest potential (good margin, predictable demand) and place them in FBA + EFN. This way, you'll immediately gain the Prime badge, faster sales, and the ability to enable Sponsored Products.
2. Sell the rest of your inventory in FBM. This will allow you to check what truly sells, without the risk of additional storage fees.
3. After 60–90 days, analyze the results – which products sell best, where rotation is strongest, and what the real margin is.
4. Move bestsellers to Pan-EUto increase sales and improve conversion across Europe. Leave weaker products in FBM or in limited quantities in FBA.

This approach minimizes risk while allowing you to quickly leverage Prime's potential and build scale where it truly pays off.

Logistics Costs – Quick Comparison

On Amazon, logistics is not just about choosing a model, but also about specific coststhat 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, rates depend on the market, product dimensions and weight, season (e.g., Q4 more expensive storage), as well as current Amazon and courier company price lists.

Mini-calculator for cost consideration

• FBM order cost ≈ courier shipping (PL/EU) + carton/foil + warehouse labor + returns handling.
• FBA order cost ≈ pick & pack fee + storage (calculated in m³/month, with higher rates in Q4) + inbound (delivery to FBA) + potential long-term fees.
• EFN vs Pan-EU – EFN means an additional charge for cross-border shipments, Pan-EU offers lower "last mile" costs, but with VAT/EPR obligations in many countries.

The simplest rule is:
👉 If, after deducting Amazon commission + logistics costs (FBM/FBA/EFN/Pan-EU) + average PPC advertising cost you are left with your target gross margin – the model is healthy. If not, it's worth changing packaging, carrier rate, price, or the logistics model itself.

FAQ – quick answers to help you make a decision

Finally, we've gathered some frequently asked questions that arise for sellers planning to start on Amazon. These are short answers to help you clear up doubts and make a quicker decision on whether to choose FBA or FBM, and where to start your expansion in Europe.

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

EFN or Pan-EU to start?
The most frequently recommended scenario is EFN for startup – one warehouse and demand testing. Once you know which products are selling and have a healthy margin, you then switch to Pan-EU for bestsellers.

Is VAT needed in several countries for Pan-EU?
Yes. If Amazon replicates inventory to warehouses in different countries, you must register for VAT in each of them (and in some, also for EPR). This requires a plan and additional accounting, but in return, it provides the highest conversion and local Prime delivery.

Can we have Prime with FBM?
Theoretically, yes – through the program Seller Fulfilled Prime (SFP). In practice, access to it for new accounts in the EU is severely limited. That's why most companies use Prime exclusively through FBA.

Which path do we recommend for starting (from Poland)

From experience, we know that the best results come from a mixed model to start – so that, on one hand, you get Prime and quickly check sales potential, and on the other, you don't tie up capital in Amazon's warehouses.

The practical plan looks like this:

1. Choose 2–3 products (SKU) with the highest margin and predictable demand. These should be your "pilots" on Amazon.
2. Launch FBA + EFN for these products – you'll gain Prime, better conversion, and access to Sponsored Products ads.
3. List the remaining assortment in FBM, to check what truly sells, without the risk of additional storage costs.
4. Monitor results for the first 60–90 days – conversion, margin, and advertising costs.
5. Move bestsellers to Pan-EU – this is the time to scale sales in Europe and prepare for VAT/EPR registrations.
6. Underperforming products keep in FBM or limited FBA, so you are not burdened with long-term storage fees.

👉 This approach allows you to quickly enter Amazon, limit financial risk, and simultaneously prepare the ground for pan-European expansion.

Frequently Asked Questions (FAQ)

Everyone starting their Amazon selling journey has similar doubts. Many of these questions recur in conversations with our clients, so we've compiled the most frequently asked questions and answers. This will help you avoid misunderstandings and better prepare for launch.

Can I sell on Amazon without a company?
Theoretically yes, but only with an individual plan and a very small sales volume. If you want to grow your business, a company registration and VAT number are practically essential.

How long does Amazon Seller account registration take?
Usually two to five business days. If the documents are unreadable or the data doesn't match what you provided in the form, the process can extend to several weeks.

Does one account work across Europe?
Yes, Amazon offers a so-called European Unified Account. This allows you to sell in all EU markets using a single dashboard. However, if you store goods outside of Poland, you must remember to register for VAT in that specific country.

Can I change my selling plan later?
Yes, you can switch from an individual plan to a professional plan and vice versa at any time. In practice, most sellers who start with an individual plan quickly upgrade to a professional one.

Is an Amazon Seller account free?
No. You either pay 4 PLN for each sale under the individual plan, or a monthly subscription of 165.91 PLN under the professional plan. Additionally, there are commissions and potential logistics fees if you use FBA.

How does Amazon pay sellers?
Typically, transfers are made to the specified bank account every two weeks. In some cases, Amazon may hold funds longer, for example, if the account is new or if there are complaints.

Does Amazon require a VAT number?
In the initial stages of selling in Poland, not always, but if you plan to use FBA or sell in multiple countries, VAT becomes a necessity. It's worth registering immediately to avoid account blocks.

What is the Buy Box and do I need it?
The Buy Box is the "Add to Cart" button that a customer sees on a product page. Only one seller can win it, and Amazon selects them based on price, availability, and customer service quality. Without the Buy Box, your product is still visible, but sales are much more difficult.

Summary + next steps

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

• FBA – higher conversion, Prime eligibility, and easier scaling; the key is to accurately calculate fees and monitor inventory turnover.
• FBM – full control and flexibility; works well for testing, oversized products, and when you have your own logistics.
• EFN – the simplest way to start selling in Europe from a single warehouse.
• Pan-EU – a turbo boost for bestsellers, delivering the highest sales and best conversion, but requiring VAT registration and compliance with EPR obligations in several countries.

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

Contact us →