Selling on FBA, but 3rd party warehouse trying to get me to go SFP!

Hi everyone, my 3rd party warehouse is trying to get me to go Seller Fulfilled Prime, but I don’t really understand the benefit. We sell fairly cheap items £15-25 so don’t have a lot of room for fees.

As I understand it, Amazon charges the referreal fee (15% of selling price) no matter how it’s sent, but the price Amazon picks, packs and ships for (FBA fee) it’s hugely cheaper than my warehouse offers. Not even close.

Is this normal? I can’t think why the warehouse would even suggest such a tragic move.