Amazon FBA at 20: What Founders Gain—and Give Up

What Amazon FBA Offers Independent Sellers For decades, a consumer product founder’s biggest opportunity could be a meeting with a retail buyer. Founders traveled to pitch merchants at retailers such as Target or Sephora, hoping to secure a purchase order large enough to justify financing the inventory. Others took a different route: shipping pallets to an Amazon warehouse and letting the shelf come to them. Fulfillment by Amazon (FBA) handles storage and order fulfillment for independent sellers. Instead of managing those logistics themselves, sellers can send inventory to Amazon’s warehouses, where the company fulfills orders. FBA does not remove every challenge of running a business, but it offers an alternative to relying on a traditional retail buyer and purchase order. Amazon launched FBA in 2006 with seven fulfillment centers and an inventory page that updated once a day, according to an anniversary post by Amazon vice president of worldwide FBA Sunny Jain. The company says it has since moved more than 80 billion units. Two decades on, the service represents a significant shift in how independent sellers can store products and fulfill customer orders. How FBA Changed Founders’ Routes to Market Big-box retail can mean financing production and waiting on payment terms; FBA offers another route to customers, though it comes with fulfillment charges. Amazon says US sellers switching to FBA in the second half of 2025 shipped nearly 1.6 times the units and had more than 1.5 times the weekly sales. Those are Amazon’s own figures, measured by Amazon. Bloom Daily Planners began with college bookstore wholesale, then tried ecommerce and brick-and-mortar retail. Target was not a good fit, founder Kaylyn DiNardo said, though Bloom later sold on Target.com. The company tested eight products on Amazon, with ten full-time employees fulfilling orders from its office. Immediate demand prompted a quick move to FBA. For Atlas Bars founder James Oliver, Amazon changed how he spent his time. While doing store demos in Connecticut, he slept in his car rather than drive home to Massachusetts each night. After a three-hour demo, he checked Amazon and saw it had sold ten times as much product during the same period. “That day made it clear to me that not all time spent is equally productive,” Oliver said, and he began spending more of his time on Amazon. The Costs of Visibility and Customer Ownership Fulfillment can ease the work of distribution, but it does not make a brand visible or guarantee repeat purchases. In the second quarter of 2026, independent sellers accounted for 61% of Amazon’s paid units sold, down one percentage point from a year earlier. Amazon reported $46.8 billion in third-party seller-services revenue for the quarter, up 16%; advertising revenue rose 26% to $19.8 billion. Amazon does not say how much advertising revenue came from independent sellers, and neither figure reveals what any individual brand spends to acquire a customer. A sale on Amazon gives a brand an order, not necessarily a lasting relationship beyond the platform. Bloom Daily Planners has built a Facebook community that customers are invited to join through its products. The company also developed its Chronic Illness Planner with input from people with chronic illnesses and their caregivers, using focus groups and surveys. Their feedback shaped what the planner could track and how much information appeared on each page. That work shows how fulfillment and customer connection are distinct: FBA can handle orders, but attention and relationships require a brand’s own effort. Three Lessons for Founders After FBA’s 20th Anniversary FBA can take warehouse and fulfillment work off a founder’s plate, but it does not remove the need to attract buyers or build lasting relationships. The anniversary offers three practical lessons for founders considering the trade. 1. Budget for visibility Plan for advertising from the start. Fulfillment alone does not create demand, so calculate what it costs your business to get noticed rather than assuming sales will follow from joining the platform. 2. Make speed part of the offer Treat delivery time as a sales tool, not just an operational detail. Amazon reports that moving a delivery promise from four days to two lifts purchase conversion by more than 20%. Atlas Bars founder James Oliver said Amazon’s logistics network lets the company focus on its products while delivering quickly. 3. Build what the platform cannot hold A marketplace order does not automatically create a relationship beyond the platform. Build customer connections of your own—such as an email list—or create products with customers. Bloom Daily Planners, for example, used focus groups and surveys with people with chronic illnesses and caregivers to shape its Chronic Illness Planner. Those relationships and products can help sustain a brand if platform rules change.