FBA stands for Fulfilment By Amazon 

This is an order fulfilment model, In Which Amazon receives your products in their warehouse, manages the inventory in their warehouse, when the customer orders the product Amazon will pack the product, and Ship the product to the customer house and will take care of returns and exchanges. FBA is an automated fulfilment model, and it is business friendly as well! 

FBM stands for Fulfillment By Merchant 

In this order fulfilment model, the merchant has to store all the inventory, when the customer orders the products seller delivers the product, and take care of all the returns and exchanges!