What are the advantages of selling merchant fulfilled?
When fulfilling your orders directly to your customers, the biggest advantages are being able to control your packing, being able to fulfill orders when FBA cannot (COVID-19 & pandemic problem) and being able to handle your own customer service. Of course, the advantage of automation still exists for sending in shipments to FBA, but fulfilling orders yourself definitely comes with its own advantages.
One of the most important things when it comes to fulfilling by merchant, especially if you have more than one SKU, is being able to find the item. Granted that is another article entirely, setting up an easy to use and understand system will help tremendously. Overall, the best reason to use fulfilled by merchant is to help cut storage costs. If you own the place where you keep your inventory, then that completely eliminates storage costs. If you don't own it, it is more than likely still significantly cheaper than paying Amazon to store the items for you.