As an Amazon FBA seller, you have two options when it comes to prepping your shipments to be received by an Amazon FBA warehouse:
Option #1: Have your supplier do it
Option #2: Send your inventory to a specialist Amazon prep center
More and more FBA sellers are opting for option two and this blog post will tell you why.
What is an Amazon Prep Center?
An Amazon prep center is a third-party service provider that acts as an intermediary between your suppliers and Amazon fulfillment centers. They’re responsible for preparing and processing inventory for Amazon sellers, in line with Amazon’s packaging, shipping, and labeling requirements, with turnaround times as quick as 24 to 72 hours.
Services they offer include:
- Product inspection: They check for damages or defects in the products
- Label application: They apply necessary labels like FNSKU or expiration dates
- Secure packaging: They package items securely in line with Amazon’s guidelines
- Kitting or bundling: They bundle items for sale
How Does an Amazon Prep Center Work?
An Amazon prep center will receive your shipment directly from your supplier. Upon receiving the products, they’ll conduct a quality inspection, add any necessary labels, package up your items, and ship them on to the Amazon fulfillment center ready for sale.
It’s as simple as that.
Why Use an Amazon Prep Center?
Streamlining your supply chain is a huge part of running a successful, profitable, and efficient business.
Efficiency and quality are essentially what Amazon prep centers are selling. By using a prep center, you can focus more on strategic business activities like sourcing new products and marketing, while having the confidence that your products meet Amazon’s packaging and labeling requirements.
Using an Amazon Prep Center can offer several advantages for Amazon sellers:
- Compliance Assurance: Prep centers ensure products adhere to Amazon’s packaging and labeling requirements, minimizing the risk of non-compliance fees or penalties.
- Time Efficiency: By outsourcing prep work, sellers can allocate more time to strategic business activities like sourcing new products and marketing, which can enhance business growth.
- Cost-Effective: Prep centers provide cost-effective solutions through economies of scale. They help avoid hidden costs associated with self-prepping and offer quality control to maintain the seller’s reputation.
In short, a prep center can handle the tedious and time-consuming tasks, allowing sellers to focus more on growing their business.
FBA Prep Center Versus Prepped by Supplier: Which is Better?
The vast majority of Amazon business owners aren’t opting for the DIY route when there are two better options on the table. That leaves the decision between using a prep center and having your supplier handle the prep work.
The best option for your business depends on several factors:
| Amazon FBA Prep Center | Prepped by Supplier | |
|---|---|---|
| Product Complexity | Suitable for products that have more complex packaging requirements (like flammable labels or polybagging). | Usually the cheaper and more efficient option for simple products without many Amazon-enforced packaging requirements. |
| Risk Tolerance | An extra layer of quality control to inspect and verify your items are in good condition and in accurate quantities. | The seller has less control over quality inspections and relies on third-party QA in the country of origin. |
| Supplier Trust | If you don’t have a strong relationship of trust with a supplier, e.g. you’re using them for the first time, then using a prep center is a viable option to bolster that trust. | If your supplier has previously prepped orders and had no issues, the risk of problems is lower compared to using a new supplier. |
| Packaging Multi-Pack Items | Prep centers can make packaging easier for bundled items, particularly those shipping from multiple suppliers. | Bundled items being manufactured in the same factory can be packaged together by your supplier directly without the need to manage multiple shipments. |
| Handling Returns and Removals | Some prep centers offer services to handle this so you don’t have to deal with them as your business scales. | This can’t be handled by your supplier. |
In short, the decision depends on your specific business circumstances, risk tolerance, and crucially, your relationship with your suppliers.
Scaling your Amazon FBA business brings with it added risk. Make sure you have adequate product liability insurance that meets Amazon’s requirements and scales with you on a ‘Pay-As-You-Sell’ model.
Choosing the Best Amazon FBA Prep Center
A quick Google search will present you with multiple prep centers, but consider these factors before you choose one:
Prep Center Location
The prep center’s location relative to your suppliers and Amazon fulfillment centers can impact shipping times and costs.
You don’t want to be in a situation where your shipments arrive in LA, your prep center is in New York and Amazon is storing your inventory in Texas. That makes no economic sense, not to mention the environmental impact.
There are prep centers located strategically near all of the major US ports – and major hubs in countries around the world – so ensure you choose one in a location that makes sense.
Service Offering
It goes without saying that you should ensure the prep center offers the range of services you need such as product inspection, labeling, packaging, and kitting or bundling. Be clear and specific on these requirements when hunting for the right prep center.
Cost-Effectiveness
Assess the cost of their services and whether they fit within your budget. It’s valuable to get multiple quotes to find the one that makes sense for your business.
Turnaround Time
The prep center’s processing speed should align with your inventory management strategy, rate of replenishment, and sales velocity.
Storage Capabilities
If your products require specific conditions like climate control, check if the prep center can accommodate these needs.
Cost of Using an Amazon Prep Center
Every Amazon prep center has a different pricing model and the actually cost to your business will vary depending on your requirements but you can expect to pay around $1-2 per unit.
Some prep centers will charge per item or box, while others may implement a flat monthly fee. There may also be additional fees for specific storage requirements or extra services, as well as hidden costs like setup, long-term storage, or special handling fees.
It’s important that you carefully assess all costs associated with a prep center to ensure the service fits within your budget and expectations. Always ask for a detailed breakdown of costs before making a decision.
Interested in more Amazon inventory management strategies. Check out these posts next:
- Our Top Amazon Inventory Management Strategies
- Importing from China: The Pros and Cons
- Amazon FBA Capacity Limits 2024: Manage Your FBA Storage Like a Pro
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