Is FBA Still Worth It in 2025?

Before making any definite answer, let’s have a look at how Amazon and FBA sellers are doing lately:

• This year, Amazon is expected to make up 56% of US eCommerce sales in 2023. In the grand picture, major online retailers, all together, are expected to account for only 43.4% of the market.
• Amazon’s revenue reached a staggering $554.03 billion in 2023, more than double that of its closest competitor, Walmart. This represents an impressive growth of 10.32% from the previous year, showcasing the company’s continued dominance in the e-commerce landscape.
• A significant portion of Amazon’s revenue, 28.5%, came from its third-party sellers in 2023. This highlights the company’s success in fostering a thriving marketplace for independent businesses. Notably, around 90% of Amazon sellers utilize the company’s Fulfillment by Amazon (FBA) service, demonstrating its effectiveness in streamlining logistics and enhancing customer satisfaction.

These numbers speak for themselves. The growth of this marketplace and the potential for doing FBA business is undeniable and impossible to ignore. Admittedly, there is a noticeable increase in terms of competition. But if you know the ins and outs of this marketplace, you are well ahead of the curve.

Yes. FBA is still worth it in 2025. 

What is FBA?

Fulfillment by Amazon is a fulfillment service provided by Amazon. With FBA, sellers on Amazon can send products to Amazon and let them manage the storage of their stock, as well as other preps processes like packing and shipping.

Benefits of FBA

FBA is now a popular choice among Amazon sellers. There are some obvious reasons why everyone is choosing to fulfill orders via Amazon.

FBA Prep Service

Amazon takes care of all the prep steps which include preparing orders, checking quality, packing, and shipping products.

Prime Shipping

One of the highlight benefits of FBA is Prime shipping. With Prime Shipping, your package will be delivered within two days. It’s worth noting that Prime membership increased by 47% last year, solid proof that the shoppers are favoring products with Prime Shipping more.

Statistics also show that Prime members are spending significantly more than regular Amazon customers (1).

Low shipping cost

When selling via FBA, you can benefit from the massive discount that Amazon gets from the major carriers. It is much lower than the rate that individual sellers could get.

Professional Customer Service

When using FBA services, you can benefit from Amazon’s customer service resources. Buyers can contact directly to Amazon customer service center for any query about their orders. That’s how you can save a lot of time and energy by dealing with customers’ concerns.

Pros of Amazon FBA

Besides all the obvious benefits mentioned above, FBA services can provide significant help to grow your business. In fact, FBA has helped many sellers to significantly increase their incomes by 30-50%. (2)

Reduce workload

After sending products to Amazon, you are basically free from all the responsibility of handling your stock. It will significantly reduce your workload as well as save time and effort. Everything is now in good hands and you can focus on marketing your products, building your brand, and driving more sales to your store.

Increase visibility and scale up your business

One of the biggest benefits of doing FBA is the ability to reach a larger audience of shoppers on this platform.

With Amazon FBA, your products will appear on Prime search. More buyers are searching for Prime shipping products, which means your product will have a higher chance of showing up on potential buyers’ search results.

Increase customer satisfaction

FBA helps you to cut down shipping time, lower shipping costs and deliver professional customer services – all of which contribute to an overall higher level of customer satisfaction.

Expand your business globally

Thanks to Amazon’s widespread network of warehouses and facilities in many locations, you can rely on them to deliver products to your international customers with efficiency.

Cons of Amazon FBA

Yes, Amazon FBA is beneficial in many aspects. Yet, there are a few downsides that you need to be aware of before setting your foot in this market.

Higher cost

You are paying Amazon to take care of your fulfillment process. That will add an extra cost to your business operation. To make sure that your products’ prices are still competitive after adding all the extra fees, you must plot your plan and calculate your pricing carefully.

Higher return rate

Amazon’s always on the customers’ side. Because of their generous return policy, it is easier for buyers to return products. So, when selling via Amazon FBA, you might have to accept a rise in return frequency.

Extended fee for unsold stock

Apparently, Amazon will charge warehouse fees even when your products. So, you have better clear your stock as soon as possible.

Challenges for Entering FBA in 2025:

Based on opinions from a Reddit thread, here are the key reasons why Amazon Fulfillment by Amazon (FBA) is becoming increasingly difficult in 2025:

Increased Competition: The Amazon marketplace is buzzing with activity, and it’s getting crowded. With over 9.7 million sellers worldwide, including 1.9 million active ones, and more than 3,700 new merchants joining daily in 2024, the competition is intense. For print-on-demand sellers, this means your unique designs need to stand out in a sea of similar products.

More sellers mean it’s tougher to grab customer attention, especially in popular niches like custom apparel or accessories. This makes it tougher for new or smaller sellers to differentiate themselves and capture sales, as the market becomes saturated.

Preference for Established Brands: Amazon appears to prioritize well-known brands, giving them greater visibility. Customers often gravitate toward familiar brands, leaving smaller sellers struggling to compete for prime spots and sales. Your products, no matter how creative, might not get the exposure they deserve. 

Rising Fees: Amazon has progressively raised its fees, cutting into sellers’ profit margins. FBA fees rose by 12% in 2024. This can still take a big bite out of your profits, making it particularly challenging for those dealing in lower-margin products, as maintaining profitability becomes more difficult.

Declining Profitability: Long-term sellers have noted a significant drop in profits, driven by factors like increased competition, higher fees, and market saturation. This trend suggests that FBA is becoming less lucrative over time.

Risk of Over-Reliance on Amazon: Putting all your eggs in Amazon’s basket is risky. Amazon controls your inventory, sets policies, and can change rules overnight, which can disrupt your business. In 2024, Amazon’s updated storage fee policies caught many sellers off guard, leading to unexpected costs.

Sellers are encouraged to diversify their sales channels, indicating that FBA is less dependable as a standalone business model.

Need for Strategic Product Selection: Generic products face fierce competition and low margins, making it hard to profit. Niche products can attract loyal customers. To succeed, sellers must now target niche, high-margin products. This requires more effort, research, and adaptability, adding to the complexity and difficulty of running a profitable FBA business.

Stricter Compliance Requirements: Amazon is cracking down on compliance, with stricter rules on product safety, labeling, packaging, and listing accuracy. Non-compliance can lead to account suspensions or product removals, which can be devastating for a new business. 

You’ll need to invest time and resources to ensure your listings meet Amazon’s standards, from high-quality images to accurate descriptions.

Practical, Actionable Tips for Succeeding with FBA in 2025

The thread offers several concrete strategies for navigating FBA’s challenges in 2025. Here’s a distilled list of actionable tips:

Focus on Niche, High-Margin Products:

Niche products with high margins (think 30-90%) let you dodge the price wars of crowded markets and give you breathing room for costs like fees or shipping. Plus, they’re perfect for standing out to specific customers who’ll happily pay for something unique.

Targeting these products takes more upfront work, but it pays off big time. Low competition means your listings get seen, and strong margins mean you’re not scraping by on every sale.

• Research trending niches with proven demand.
  Start by digging into niches that are buzzing but not swamped with sellers. Tools like Google Trends or Amazon’s Best Sellers can show you what’s hot.
• Analyze profit margins before committing.
  Once you’ve got a niche, run the numbers with tools like Jungle Scout or Helium 10. Aim for at least 30-50% margins—90% if you can swing it—to cover costs and leave room for growth.

Start Small and Test:

One big FBA hurdle is the upfront investment, especially if you’re new to the game. Starting small lets you test the waters without sinking your budget into a huge inventory that might not sell. 

Plus, the e-commerce landscape shifts quickly—think algorithm tweaks or trending products. By testing on a small scale, you can pivot fast and adapt without being locked into a big commitment.

• Begin with a small inventory or private label.
  Kick things off with a modest batch—maybe 50-100 units—to keep your financial exposure low while you learn the ropes. Print on demand can also be a low-cost way for you to test new designs and new products without a big commitment. It requires no NMQ and no upfront cost. 
• Test FBA personally on a small scale.
  Send in that small batch yourself and get hands-on with the FBA process—labeling, shipping, the whole deal. This is your chance to see how it flows with your setup. With Merchize’s FBA Amazon, you can combine various designs and product types into one single batch, making it easy to test on a small scale. 
• Assess if FBA fits your business before committing fully.
  After your test, crunch the numbers and reflect. Did FBA boost your sales enough to justify the fees? Does it play nicely with your POD workflow? It’s your reality check. You’ll know if FBA’s worth scaling up or if you’re better off sticking to self-fulfillment for now.

Build a Brand and Diversify:

A strong brand turns casual buyers into loyal fans who’ll follow you anywhere while spreading your products across multiple platforms reduces your dependency on Amazon’s ecosystem. 

• Create a standout brand identity.
  Your brand’s vibe—logo, colors, and a personality that hooks customers and keeps them coming back.  It builds trust and recognition, so buyers choose you over generic listings, even off Amazon.
• Establish a presence outside Amazon to reduce dependency.
  Selling on platforms like eBay or Walmart, or your own website means you’re not all-in on Amazon’s rollercoaster—think of it as a safety net for your cash flow.
• Maintain control over your inventory and brand.
  Don’t let Amazon hog your customer relationships—capture emails or drive folks to your own site. Toss a branded insert in your FBA packages with a discount code for your site.

Limit Inventory in Amazon Warehouses:

With storage fees creeping up, limiting the inventory you send to Amazon’s warehouses can save you a bundle and keep your profits intact. By keeping your inventory lean, you free up cash flow and stay flexible in a fast-changing market.

Monitor Inventory Levels Closely: Tracking your stock prevents overstocking, cutting down on unnecessary fees, and keeping your cash flow healthy.

Regularly Review and Adjust Inventory: Staying on top of data helps you spot slow movers and avoid fee traps.

Use Private Label or Unbranded Products

Selling branded products often means navigating a maze of restrictions and compliance hurdles that can trip you up. By opting for private label or unbranded items, you dodge those issues, keep your account in good standing, and gain more control over your business.

• Research and select a niche for your private label product: A solid niche sets you up for less competition and higher demand—key to boosting sales and profits.
• Source or create your private label product: Your own product means you call the shots on branding, pricing, and quality, helping you stand out from the pack.

Ensure Compliance with Amazon Policies

Staying compliant means protecting your inventory and revenue from sudden suspensions or bans. It’s not just about avoiding trouble—it builds trust with Amazon and your customers, giving you a solid foundation to grow.

• Study Amazon’s Seller Central Resources: Seller Central is your go-to hub for Amazon’s latest rules—think category approvals, branding guidelines, and invoicing musts. It’s straight from the source, so you’re always in the loop.
• Join Amazon Seller Forums and Communities: These communities offer insider tips and early warnings about policy shifts from fellow sellers. It’s like having a heads-up before Amazon drops the hammer.
• Use Compliance Checklists: Checklists keep you organized and ensure you don’t skip critical steps, especially in complex areas like gated categories.
• Regularly Audit Your Account: Audits catch slip-ups before they turn into account health disasters, keeping you proactive. Schedule monthly reviews of listings, branding, and invoices and use Amazon’s Account Health dashboard to monitor your status.

Monitor Fees and Competition:

Amazon’s fees, from storage to fulfillment, can sneak up on you, eating into your profits if you’re not careful. Monitoring these costs helps you tweak your pricing or sourcing to keep your margins healthy.

Track Amazon Fees Regularly: Knowing your exact costs—fulfillment, storage, or referral fees—lets you price products to protect your margins.

Analyze Competitor Pricing and Strategies: Spy on competitors with Helium 10 or Jungle Scout to track their prices and keywords. Understanding what your rivals are doing helps you position your products smarter.

Adjust Pricing Dynamically: Flexible pricing keeps you competitive without slashing margins to nothing, especially in saturated niches.

Optimize Sourcing for Cost Efficiency: Cheaper, reliable suppliers mean you can absorb fee hikes and still turn a profit.  Scout suppliers on Alibaba or negotiate with your supplier for bulk discounts

Need to Adopt New Technologies 

Adopting these tools helps you streamline operations, cut costs, and compete with the big players, even if you’re a smaller seller. Without them, you risk falling behind tech-savvy competitors who are optimizing at lightning speed.

• Use AI-Driven Tools for Inventory Forecasting: AI predicts demand, helping you avoid overstocking or stockouts, which saves on storage fees and lost sales. Use tools like Forecastly or RestockPro to analyze sales trends and set reorder points
• Optimize Pricing with Automation: Automated pricing keeps you competitive without constant manual tweaks, maintaining margins in tax crowded market. Set up dynamic pricing with RepricerExpress or Aura to adjust based on competitor moves.
• Master AI-Optimized Advertising: AI-driven ads target the right buyers, boosting conversions while keeping costs in check despite rising ad competition. Dive into Amazon’s Sponsored Ads with tools like Sellics or PPC Entourage to refine keywords and bids. 
• Explore AR/VR for Product Listings: AR/VR creates immersive 3D views, making your products pop and meeting customer expectations for interactive shopping. Start small with platforms like Threekit or Vntana for 3D visuals.
• Stay Educated on Tech Trends: Keeping up with tech advancements ensures you’re not outpaced by competitors who adapt faster. Follow e-commerce blogs, webinars, or Reddit’s r/AmazonSeller for the latest on AI and AR/VR. 

How much do average Amazon sellers make?

With all the benefits that FBA brings, it seems like a sensible move to start selling via Amazon FBA. Yet, if you are still hesitant, let’s address the key questions that might motivate you to get going. So “How much do Amazon sellers make?”

Let’s take a look at this chart.

As we can see from the chart

• The majority of FBA sellers (50%) generate revenue from $1000 to $25.000.
• Only a small percentage of buyers can cross the $25,000 sale mark.
• Only a 1% can make more than $100,000.

The revenue looks great. But you know it so well that sometimes, high sales volume does equal good profit. So, let’s see how much FBA sellers can actually make from Amazon FBA.

As per the chart above, the majority of FBA sellers (65%) earn more than 10% of the profit margin. It seems to tell that the average Amazon FBA sellers are doing pretty well. Yet, 8% of the  Amazon FBA sellers haven’t made any profit yet.

If you want to make sure that you will not fall into this category, read our special beginner guide to know more details.

How long does it take to start Amazon FBA?

It is pretty straightforward to start selling on Amazon and using FBA services. You need to create a Professional seller account to sell on Amazon. Just follow the instructions and you’re set to take advantage of Amazon FBA fulfillment service.

The registration process is quick and easy. Yet, to actually launch your FBA business, you need to do the preparations, which include creating a business plan, finding products and suppliers, and setting up the price before actually pushing your products out there in the market.

For some sellers, they might want to get all the necessary knowledge and training before setting off. If you are this type of person, it might take a bit longer to actually start selling via FBA.

In general, it usually takes from 2 months to 3 months to get your Amazon business up and running.

How long does it take to make profits from Amazon FBA?

After the registration and launching stage, it might take some time to finally gain profit from your Amazon store.

Starting an online business requires less capital than a normal brick-and-mortar business. That’s why it takes less time to see a return on investment. 20% of the third-party sellers on Amazon reported it took them less than 3 months for their business to gain profits – which is the best scenario.

Yet, another 22% of sellers said they only earn a profit after 3-6 months. For some sellers, it would take up to one or two years to finally see the returns, which is most likely the case for some private label products.

Challenges for Entering FBA in 2025:

Based on opinions from a Reddit thread, here are the key reasons why Amazon Fulfillment by Amazon (FBA) is becoming increasingly difficult in 2025:

Increased Competition: The Amazon marketplace is buzzing with activity, and it’s getting crowded. With over 9.7 million sellers worldwide, including 1.9 million active ones, and more than 3,700 new merchants joining daily in 2024, the competition is intense. For print-on-demand sellers, this means your unique designs need to stand out in a sea of similar products.

More sellers mean it’s tougher to grab customer attention, especially in popular niches like custom apparel or accessories. This makes it tougher for new or smaller sellers to differentiate themselves and capture sales, as the market becomes saturated.

Preference for Established Brands: Amazon appears to prioritize well-known brands, giving them greater visibility. Customers often gravitate toward familiar brands, leaving smaller sellers struggling to compete for prime spots and sales. Your products, no matter how creative, might not get the exposure they deserve. 

Rising Fees: Amazon has progressively raised its fees, cutting into sellers’ profit margins. FBA fees rose by 12% in 2024. This can still take a big bite out of your profits, making it particularly challenging for those dealing in lower-margin products, as maintaining profitability becomes more difficult.

Declining Profitability: Long-term sellers have noted a significant drop in profits, driven by factors like increased competition, higher fees, and market saturation. This trend suggests that FBA is becoming less lucrative over time.

Risk of Over-Reliance on Amazon: Putting all your eggs in Amazon’s basket is risky. Amazon controls your inventory, sets policies, and can change rules overnight, which can disrupt your business. In 2024, Amazon’s updated storage fee policies caught many sellers off guard, leading to unexpected costs.

Sellers are encouraged to diversify their sales channels, indicating that FBA is less dependable as a standalone business model.

Need for Strategic Product Selection: Generic products face fierce competition and low margins, making it hard to profit. Niche products can attract loyal customers. To succeed, sellers must now target niche, high-margin products. This requires more effort, research, and adaptability, adding to the complexity and difficulty of running a profitable FBA business.

Stricter Compliance Requirements: Amazon is cracking down on compliance, with stricter rules on product safety, labeling, packaging, and listing accuracy. Non-compliance can lead to account suspensions or product removals, which can be devastating for a new business. 

You’ll need to invest time and resources to ensure your listings meet Amazon’s standards, from high-quality images to accurate descriptions.

Practical, Actionable Tips for Succeeding with FBA in 2025

The thread offers several concrete strategies for navigating FBA’s challenges in 2025. Here’s a distilled list of actionable tips:

1. Focus on Niche, High-Margin Products:

Niche products with high margins (think 30-90%) let you dodge the price wars of crowded markets and give you breathing room for costs like fees or shipping. Plus, they’re perfect for standing out to specific customers who’ll happily pay for something unique.

Targeting these products takes more upfront work, but it pays off big time. Low competition means your listings get seen, and strong margins mean you’re not scraping by on every sale.

• Research trending niches with proven demand.
  Start by digging into niches that are buzzing but not swamped with sellers. Tools like Google Trends or Amazon’s Best Sellers can show you what’s hot.
• Analyze profit margins before committing.
  Once you’ve got a niche, run the numbers with tools like Jungle Scout or Helium 10. Aim for at least 30-50% margins—90% if you can swing it—to cover costs and leave room for growth.

2. Start Small and Test:

One big FBA hurdle is the upfront investment, especially if you’re new to the game. Starting small lets you test the waters without sinking your budget into a huge inventory that might not sell. 

Plus, the e-commerce landscape shifts quickly—think algorithm tweaks or trending products. By testing on a small scale, you can pivot fast and adapt without being locked into a big commitment.

• Begin with a small inventory or private label.
  Kick things off with a modest batch—maybe 50-100 units—to keep your financial exposure low while you learn the ropes. Print on demand can also be a low-cost way for you to test new designs and new products without a big commitment. It requires no NMQ and no upfront cost. 
• Test FBA personally on a small scale.
  Send in that small batch yourself and get hands-on with the FBA process—labeling, shipping, the whole deal. This is your chance to see how it flows with your setup. With Merchize’s FBA Amazon, you can combine various designs and product types into one single batch, making it easy to test on a small scale. 
• Assess if FBA fits your business before committing fully.
  After your test, crunch the numbers and reflect. Did FBA boost your sales enough to justify the fees? Does it play nicely with your POD workflow? It’s your reality check. You’ll know if FBA’s worth scaling up or if you’re better off sticking to self-fulfillment for now.

3. Build a Brand and Diversify:

A strong brand turns casual buyers into loyal fans who’ll follow you anywhere while spreading your products across multiple platforms reduces your dependency on Amazon’s ecosystem. 

• Create a standout brand identity.
  Your brand’s vibe—logo, colors, and a personality that hooks customers and keeps them coming back.  It builds trust and recognition, so buyers choose you over generic listings, even off Amazon.
• Establish a presence outside Amazon to reduce dependency.
  Selling on platforms like eBay or Walmart, or your own website means you’re not all-in on Amazon’s rollercoaster—think of it as a safety net for your cash flow.
• Maintain control over your inventory and brand.
  Don’t let Amazon hog your customer relationships—capture emails or drive folks to your own site. Toss a branded insert in your FBA packages with a discount code for your site.

4. Limit Inventory in Amazon Warehouses:

With storage fees creeping up, limiting the inventory you send to Amazon’s warehouses can save you a bundle and keep your profits intact. By keeping your inventory lean, you free up cash flow and stay flexible in a fast-changing market.

Monitor Inventory Levels Closely: Tracking your stock prevents overstocking, cutting down on unnecessary fees, and keeping your cash flow healthy.

Regularly Review and Adjust Inventory: Staying on top of data helps you spot slow movers and avoid fee traps.

5. Use Private Label or Unbranded Products

Selling branded products often means navigating a maze of restrictions and compliance hurdles that can trip you up. By opting for private label or unbranded items, you dodge those issues, keep your account in good standing, and gain more control over your business.

• Research and select a niche for your private label product: A solid niche sets you up for less competition and higher demand—key to boosting sales and profits.
• Source or create your private label product: Your own product means you call the shots on branding, pricing, and quality, helping you stand out from the pack.

6. Ensure Compliance with Amazon Policies

Staying compliant means protecting your inventory and revenue from sudden suspensions or bans. It’s not just about avoiding trouble—it builds trust with Amazon and your customers, giving you a solid foundation to grow.

• Study Amazon’s Seller Central Resources: Seller Central is your go-to hub for Amazon’s latest rules—think category approvals, branding guidelines, and invoicing musts. It’s straight from the source, so you’re always in the loop.
• Join Amazon Seller Forums and Communities: These communities offer insider tips and early warnings about policy shifts from fellow sellers. It’s like having a heads-up before Amazon drops the hammer.
• Use Compliance Checklists: Checklists keep you organized and ensure you don’t skip critical steps, especially in complex areas like gated categories.
• Regularly Audit Your Account: Audits catch slip-ups before they turn into account health disasters, keeping you proactive. Schedule monthly reviews of listings, branding, and invoices and use Amazon’s Account Health dashboard to monitor your status.

7. Monitor Fees and Competition:

Amazon’s fees, from storage to fulfillment, can sneak up on you, eating into your profits if you’re not careful. Monitoring these costs helps you tweak your pricing or sourcing to keep your margins healthy.

• Track Amazon Fees Regularly: Knowing your exact costs—fulfillment, storage, or referral fees—lets you price products to protect your margins.
• Analyze Competitor Pricing and Strategies: Spy on competitors with Helium 10 or Jungle Scout to track their prices and keywords. Understanding what your rivals are doing helps you position your products smarter.
• Adjust Pricing Dynamically: Flexible pricing keeps you competitive without slashing margins to nothing, especially in saturated niches.
• Optimize Sourcing for Cost Efficiency: Cheaper, reliable suppliers mean you can absorb fee hikes and still turn a profit.  Scout suppliers on Alibaba or negotiate with your supplier for bulk discounts

8. Need to Adopt New Technologies 

Adopting these tools helps you streamline operations, cut costs, and compete with the big players, even if you’re a smaller seller. Without them, you risk falling behind tech-savvy competitors who are optimizing at lightning speed.

• Use AI-Driven Tools for Inventory Forecasting: AI predicts demand, helping you avoid overstocking or stockouts, which saves on storage fees and lost sales. Use tools like Forecastly or RestockPro to analyze sales trends and set reorder points
• Optimize Pricing with Automation: Automated pricing keeps you competitive without constant manual tweaks, maintaining margins in tax crowded market. Set up dynamic pricing with RepricerExpress or Aura to adjust based on competitor moves.
• Master AI-Optimized Advertising: AI-driven ads target the right buyers, boosting conversions while keeping costs in check despite rising ad competition. Dive into Amazon’s Sponsored Ads with tools like Sellics or PPC Entourage to refine keywords and bids. 
• Explore AR/VR for Product Listings: AR/VR creates immersive 3D views, making your products pop and meeting customer expectations for interactive shopping. Start small with platforms like Threekit or Vntana for 3D visuals.
• Stay Educated on Tech Trends: Keeping up with tech advancements ensures you’re not outpaced by competitors who adapt faster. Follow e-commerce blogs, webinars, or Reddit’s r/AmazonSeller for the latest on AI and AR/VR. 
•