If you sell products online in Australia and you are looking at how to handle fulfilment, Amazon FBA and a third-party logistics provider represent two fundamentally different approaches. Both take the physical handling of orders off your plate. The difference is in who controls the process, what it costs, and how it affects the rest of your business.
This comparison covers what each model involves, where each one fits, and the questions to ask before committing to either.
What is Amazon FBA?
Fulfilment by Amazon (FBA) is Amazon’s own logistics service for sellers on the Amazon marketplace. A seller ships their stock to an Amazon fulfilment centre, and Amazon handles storage, picking, packing, despatch, customer service for fulfilment-related queries, and returns on that seller’s behalf.
The primary advantage is access to Amazon Prime eligibility — FBA products qualify for Prime delivery, which significantly affects discoverability and conversion rate on the Amazon platform. The primary constraint is that FBA is designed for Amazon orders and the Amazon customer relationship.
What is a 3PL?
A third-party logistics provider manages warehousing, pick and pack, and despatch for a business across whatever sales channels that business uses. A 3PL is not tied to a single platform. The same stock can fulfil orders from a Shopify store, eBay, a wholesale account, and a retail distribution requirement — all from one warehouse under one account. For businesses selling across several platforms, 3PL software integrations can connect ecommerce systems with warehouse inventory and order processing.
The business retains full control over the customer experience, the packaging, the carrier selection, and the data about its customers and order patterns.
Key Differences
| Factor | Amazon FBA | 3PL |
|---|---|---|
| Sales channels | Amazon only | Any channel — Shopify, eBay, B2B, retail, wholesale |
| Packaging | Amazon’s standard packaging | Business’s own packaging, branding, inserts |
| Customer data | Amazon owns the customer relationship and data | Business owns all customer data |
| Prime eligibility | Yes — FBA products qualify for Prime | No Prime badge — but can meet similar delivery timeframes |
| Returns handling | Amazon manages returns per their policy | Business sets its own returns policy |
| Cost structure | Per-unit storage + fulfilment fee + additional fees | Per-order handling + storage + freight — transparent breakdown |
| Inventory control | Amazon allocates stock across its network | Business knows exactly where stock is at all times |
| Flexibility | Limited — tied to Amazon’s processes and policies | High — provider follows the business’s requirements |
Businesses comparing the two models should also understand the main 3PL pricing and cost factors before assessing total fulfilment costs.
When FBA Makes More Sense
FBA is the right choice when:
- The business sells predominantly through Amazon and Prime eligibility is a meaningful conversion driver
- The product range is stable, standard-sized, and does not require custom packaging or branding inserts
- The business does not have existing fulfilment infrastructure and Amazon’s all-in-one model simplifies operations
- The priority is Amazon ranking and visibility rather than brand ownership of the customer experience
When a 3PL makes more sense
A 3PL is the right choice when:
- The business sells across multiple channels — its own website, Amazon, eBay, or wholesale — and needs scalable ecommerce fulfilment services to manage orders from one inventory pool
- Brand packaging, custom inserts, or specific presentation requirements matter to the customer experience
- Owning customer data and the customer relationship is a strategic priority
- FBA storage fees and long-term storage penalties are increasing costs for slower-moving lines
- The business needs a returns policy that is different from Amazon’s standard terms
- The product is oversized, heavy, or has characteristics that attract high FBA fees
Many Australian businesses that sell on Amazon use FBA for their Amazon channel and a 3PL for their direct-to-consumer website and other channels simultaneously — running both models from separate stock pools or with the 3PL preparing FBA-compliant shipments for Amazon inbounding as an additional service. If you are comparing different outsourcing models, understanding the difference between a fulfilment centre and a 3PL warehouse can also help determine which setup best suits your operations.
Need More Control Than Amazon FBA Offers?
TLC Enterprise provides 3PL warehousing, ecommerce fulfilment, and FBA prep services for Australian sellers — with dedicated account management and real-time inventory visibility across all your sales channels.
Call: 1300 343 751 | Email: bookings@tlcenterprise.com.au | View 3PL services at TLC Enterprise
Frequently Asked Questions
Yes. Some 3PL providers offer FBA prep as a service — receiving stock, labelling products to Amazon’s requirements, building compliant cartons, and booking inbound shipments to Amazon’s fulfilment network on the seller’s behalf. This is particularly useful for businesses importing directly from overseas suppliers who need goods processed before they reach Amazon.
The main cost risks are long-term storage fees for inventory that does not sell within a defined period, aged inventory surcharges, removal fees for stock the seller wants returned, and higher fulfilment fees for oversized items. FBA costs are not always immediately transparent when a seller is starting out and can increase significantly as inventory scales.
Products fulfilled by a seller rather than Amazon (Merchant Fulfilled Network, or MFN) do not automatically qualify for Prime, which can reduce visibility in Prime-filtered searches. However, sellers enrolled in Seller Fulfilled Prime can maintain Prime eligibility while using their own fulfilment — subject to meeting Amazon’s performance standards for despatch speed and delivery timeframes.
FBA prep is the process of preparing products to meet Amazon’s inbound requirements before shipping to an Amazon fulfilment centre. This includes applying FNSKU labels to each unit, polybagging items that Amazon requires to be individually wrapped, building cartons to Amazon’s specifications, and booking the inbound shipment through Seller Central. Incorrectly prepared stock is rejected at the Amazon fulfilment centre and must be removed at the seller’s cost.