Amazon Seller Dictionary

This dictionary is designed to help Amazon sellers quickly understand the most important terms used inside Amazon’s ecosystem.

Fulfillment

Fulfillment is the end-to-end process of storing, picking, packing, and delivering customer orders. Learn the fulfillment models available to Amazon sellers and how to choose the right one for your business.

What is Fulfillment?

Fulfillment is the complete operational process of receiving, processing, and delivering a customer's order—from inventory storage and order picking, through packing and shipping, all the way to post-delivery support and returns handling. On Amazon, how you choose to fulfill orders has a direct impact on delivery speed, Prime eligibility, customer satisfaction, seller account health, and ultimately your profitability.

Amazon Fulfillment Options for Sellers

  • FBA (Fulfilled by Amazon): Send inventory to Amazon; they store, pick, pack, and ship on your behalf
  • FBM (Fulfilled by Merchant): You manage all storage, packing, and shipping in-house
  • SFP (Seller Fulfilled Prime): You fulfill orders from your own warehouse while meeting Amazon Prime shipping standards
  • MCF (Multi-Channel Fulfillment): Amazon uses your FBA inventory to fulfill orders from other sales channels
  • 3PL (Third-Party Logistics): An external logistics provider fulfills orders on your behalf

FBA vs. FBM: How to Decide

FBA is the right choice for fast-moving, standard-size products where Prime eligibility is a conversion driver. FBM makes more sense for heavy, oversized, or slow-moving items where FBA fees erode margins. Many experienced sellers run a hybrid model—FBA for their top performers and FBM as a cost-efficient backup or for SKUs that don't justify FBA's fee structure.

Key Metrics in Amazon Fulfillment

  • On-time delivery rate: Percentage of orders delivered by the promised date
  • Order Defect Rate (ODR): Composite metric tracking negative feedback, A-to-Z claims, and chargebacks
  • Perfect Order Percentage (POP): Measures orders completed with zero issues from start to finish
  • Inventory Performance Index (IPI): FBA-specific score that affects your storage capacity limits
  • Return dissatisfaction rate: Tracks how effectively return requests are resolved
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