Your retail business can get a significant boost if you leverage Amazon prep centers.
This is an incredibly cost-effective way to handle inventory and reduce the hassles of handling logistics yourself.
This article looks at what an Amazon prep center is, how it works, the benefits you can get from the service, and how to choose one that suits your business.
Let’s get started.
What is an Amazon Prep Center?
An Amazon prep center is a company that specializes in getting your items or inventory ready for Amazon FBA warehouses.
Usually, retail sellers who use Amazon FBA have the option to get their items ready themselves. But any Amazon seller will be quick to tell you that packing inventory requires a ton of experience and expertise.
To crown it all, Amazon has extremely strict FBA guidelines for different product types and packing options. Not adhering to the requirements doesn’t only lead to delayed shipment, but it can also bring about penalties.
When you factor in all of these, your best bet would be to simply outsource this activity to experienced companies or prep centers.
How Does Amazon Prep Service Works?
Prep services help you do all the heavy lifting concerning logistics.
Typically, your shipments are sent directly to a prep center instead of to your address, and the company will take it up from there, ensuring that your products are properly packaged and shipped to FBA warehouses on your behalf.
Some of the common services prep centers provide include:
- Receiving shipment
- Sticker removal
- Inspection of items
- Shipping labels
- Barcodes or FNSKU labels
- Shipping services
- Product assembly
- Order fulfillment
- Promotional inserts
- Fragile item preparation
- Container handling
Note that some services may incur additional fees. Read here for more information about FBA prep service fees.
The exact process may vary slightly between different prep service providers, but here’s a general idea of how the service works:
Step 1: The Prep Center Receives Your Merchandise
First, you route your shipment of products to the prep center of your choice. The company receives your merchandise into its warehouse and inspects it to ensure everything is in good condition.
It also makes sure the merchandise complies with Amazon’s quality control guidelines. Next, the prep center will send you a preliminary report about the receipt of your merchandise and the result of the inspection.
Step 2: The Prep Center Complies with Seller Instructions
The next stage involves following your instructions to the latter. You may have specific instructions about product specifications or quantity. You should furnish the prep center with these instructions beforehand.
In some cases, you may want the company to have partial access to your online store to allow them to print your item labels or give the prep center the FNSKU (fulfillment item labels) if you prefer.
Step 3: Preparing Shipment to Amazon Warehouse
At this stage, the prep center starts the actual process of prepping your merchandise into containers, boxes, and more, depending on the type of items and specific Amazon packing requirements.
This stage gets your items ready to be shipped to FBA warehouses.
Step 4: Shipping to FBA Warehouse
When everything is prepared and ready, your merchandise is shipped to the FBA warehouse using third-party logistics companies, such as USPS, UPS, FedEx, DHL, or other courier services.
Some FBA prep centers ship every day while others work only on weekdays (Mondays to Fridays).
Factors to Consider When Choosing an Amazon Prep Center
While FBA prep centers do their best to provide the best services (at least, in most cases), they are not all created equal. Of course, many prep service providers attract sellers with a promise of offering the lowest price, but you need to factor in the unique needs of your business.
For this reason, it is important for retailers to carefully think about the following major factors when choosing prep centers:
Location is a crucial consideration when it comes to choosing the most suitable Amazon prep center for your business. Typically, you can expect to pay more for shipping if your inventory has to travel farther to get to the prep center.
For this reason, a smarter choice would be to choose a prep service with a center nearer to where you source your products, especially if you source products domestically.
You may not have the flexibility of choosing a prep center closer to your product source if your products come from overseas. However, you can choose an Amazon prep center that is near a major port. Doing this will increase the chances of having smoother outbound shipping and save money on inbound shipping charges.
Warehouse Capabilities / Storage Facilities
Not all warehouses are good for certain inventories, and in fact, not all prep centers provide services for all types of sellers. You need to pay particular attention to specific facilities in the warehouse, particularly if your inventory requires storage in special conditions.
Also, you must not lose sight of the minimum order quantity from your supplier as well as your sales velocity. With this in mind, always find out the size of the storage facility to make sure the prep center can handle your expected volume of products in addition to those from other sellers.
The speed and processing time for FBA prep centers can range anywhere from less than a day to about a month. This will depend on the specific requirements, such as organization and services required, as well as where the items ordered are coming from.
It is crucial to know the exact turnaround time to expect from an FBA prep center to prevent delays.
While the fasted processing time is usually desirable, it is important to strike a good balance between speed and costs, especially if you are importing from overseas. You also want to factor in how it can impact your inventory.
Level of Communication
Different prep centers have various ways of communicating with sellers regarding the processes or stages of their inventory as it is being shipped to FBA warehouses.
It is important to find out the level of communication available when vetting an Amazon prep center. Some companies have product tracking software that allows you to know the exact stage where things are at throughout the entire process.
With this type of communication (product tracking software) you are always updated about which products are shipped out and what shipments have been received.
Whether you choose a company that provides product tracking software or some other type of communication, it is important to opt for a prep center that keeps you in the know so you can track the progress of things.
Make sure you are comfortable with the level of communication so you won’t be left in the dark or left guess about the situation of your shipments.
Outsourcing to a prep center involves putting a lot of trust in a third-party company. That’s because you are giving another company considerable information about your business.
Be sure that you can completely trust the company before you work with them. Read reviews from other clients to help you figure out their trust level.
Thankfully, many Amazon prep centers operate above board, so there is little to worry about.
Lastly and very importantly, consider the cost associated with outsourcing FBA prep. Some prep companies have a fixed monthly rate, while others charge per item.
You may want to opt for a company that charges a monthly rate if you primarily ship out large volumes of products every month. On the other hand, if you don’t send stock quite regularly, a prep service that charges per item will be a smarter choice.
Keep in mind that extra charges may apply for additional services, such as quality control bubble wrap. For this reason, it is important to enquire about applicable charges as well as what the regular fees cover.
How Does an Amazon Prep Center Improve Your Business?
Choosing to outsource the prep and shipping of your items can offer the following benefits:
Save Time and Effort
Prep services can save you a ton of time, effort, and resources that you would have to put in to get things done correctly in line with Amazon’s strict guidelines regarding inventory prep.
Besides, you will be freeing up a significant amount of time so you can focus on what you are really interested in – selling.
If you run a small retail business on Amazon, you might be able to make do with in-house workers. But as your business grows and becomes bigger, dealing with the hassles of prepping and shipping items to Amazon can become a huge bottleneck and eat into the time you should have spent sourcing and selling products.
No Need for Storage
With a third-party FBA prep center, you don’t have to worry about providing storage space for your inventory. In fact, most retailers don’t even have adequate storage at their disposal at their headquarters and homes.
Your inventory ships to Amazon through prep services instead of terminating at your retail headquarters (whether that’s an actual office or your house). You only have to visit your prep service provider to ensure the quality of the products.
Increase Your Profit Margins
Prep companies are experts at prepping and shipping items, meaning they can get a lot done professionally to Amazon’s standards in far less time than you would ever do even with the help of in-house workers.
This translates to faster turnaround times and increases the number of customers you can service through Amazon FBA.
As you may have figured, servicing more customers means more sales and increased profits. Of course, prep services cost money but they are worth the investment, especially if you plan to expand your retail business.
How to Get Started with Amazon Prep Center
Remember that not all prep centers are suitable for all businesses, so the first order of business is to be sure that you have found a company that’s a good fit for your type of business.
Once you have that out of the way you can go ahead and follow these suggestions:
Request a Consultation or Set Up Services
Prep centers have different requirements. Some will want you to go through a consultation to get started. For others, all that’s needed is to visit their website and set up the service.
Whether or not your preferred company requires a consultation, it is best to ask questions to clear up all doubts. Look for a phone number or an email if the company doesn’t offer consultation.
You want to be sure that the company is all that it says it is both on paper and in reality. This is the only way to be doubly sure it is a good fit for your business, so don’t be afraid to ask questions.
When you have all the answers you want (and not before), you can go ahead and complete the company’s registration process to become a client.
Next, you want to ship your inventory to them.
Start With a Few Shipments to the Prep Center
For your first shipment, consider routing only a few shipments of products to your prep center. Think of these as a test run to be sure that the prep service is an excellent fit for your business needs.
It is a good idea to evaluate the entire process of how the prep center handled your first shipment. Were you happy with the communication? Did everything happen in a timely fashion? Were there any problems?
If everything goes smoothly, you can go ahead and route more shipments of products to the prep center.
Shipping is one of the not-so-exciting parts of an online retaining business. Thankfully, you can offload this aspect of your business by outsourcing to a reliable Amazon prep center.
This will free up your time so you can focus on high-priority activities with a more positive and direct impact on your bottom line.
Keep in mind that not all prep centers are created equal. Make sure to use the criteria in this article to find one that’s a good fit for your business.