photo of skincare items kitted into a package

Introduction

As a third party seller on Amazon, the easiest way to keep prime status and get access to Prime customers is to use Fulfillment by Amazon (FBA).

  • Amazon is a huge marketplace; Prime members now number more than 200 million (SearchLogistics)
  • Amazon is set up to give free 2-day shipping to Prime members, and for some shoppers, that can make or break whether or not they make a purchase.

Once using FBA for online order fulfillment though, sellers will learn that it’s not easy to work with Amazon and its complex set of rules.

This complete guide will offer insight into what it takes to manage FBA Prep, options for how to comply with the rules and what to look for when seeking out a FBA Prep Service partner.

What is FBA Prep?

FBA Prep refers to the process of preparing products according to Amazon’s Fulfillment by Amazon (FBA) guidelines before sending them to Amazon warehouses. This includes labeling, packaging, and ensuring products meet specific requirements for storage, safety, and shipment to customers.

What Sellers Need to Know About FBA Penalty Fees

Ecommerce sellers considering using Fulfillment By Amazon (FBA) could consider warehousing and shipping their own products to Amazon. But the rules for sending products to Amazon are complicated and change often.

There are many errors that can sideline a merchant’s products from being available on Amazon. The penalties for these actions can be as simple as a couple hours of time, some hefty Fulfillment by Amazon penalty fees or at the worst, getting blocked from selling on Amazon altogether.

Even one of these mistakes will send products off to the “problem-solving area” where it can sit for two hours or two days or even longer. If Amazon sellers have multiple errors, they may have to pay their way out of the problem-solving area in the form of fees.

photo of person labeling a box on a desk

Labeling for FBA Must Be Exact

When labeling for FBA, don’t strap or tape cartons together, unless sending a whole shrink-wrapped pallet. Amazon requires an easily read shipping label—and only one. Recycling boxes is economical and responsible, but be sure to mark out all the old barcodes with a black Sharpie, remove them or cover them up with permanent stickers or tape. If Amazon has to guess which label is the right one, then that box is headed to the problem-solving area. Put that shipping label in a safe spot! Here are some common labeling placement errors (according to Amazon):

incorrectly labeled fba package
  • Over the box seam. Using the label to fortify the closure on the box only means that the label info, which is valuable to the Amazon receiving team, will be damaged when they cut it open.

 

  • Over a corner. Scanners have come a long way, but they are not able to bend space. Give them a nice flat shipping label.

 

  • Close to the edge. Amazon suggests 1.25 inches from the box edge if possible. Labels too close to the edge get scuffed and scraped moving through Amazon conveyors. If the machines can’t read the label, it’s going to the problem-solving area.

 

  • Under tape. Don’t cover up the label with tape, it hinders their scanners.
Correctly labeled and Prepped box for FBA

The Amazon shipment ID label is your inventory’s passport into Amazon, and just as important as the carrier label (FedEx, UPS, USPS, DHL, etc.).

  • TIP: Make Sure Shipments Don’t Get Hung Up in the Problem-Solving Area
  • Each label is unique to that shipment, even if it’s the exact same thing, don’t recopy old labels.
  • Multiple boxes? Make sure the right label is on the right box, especially if mixing products.
  • The label should be 3 1/3 x 4 inches, printed on a thermal or laser printer. Don’t use ink jet printers.

Rethink Your FBA Strategy!

See How Using a 3PL for Your FBA Prep service needs could simplify your business. Get a Free Quote from eFulfillment Service Today!

warehouse worker piece picking an order

Amazon Barcodes—FNSKUs—Must Also Be Exact:

Every item inside the box needs a barcode, and only one. And those barcodes need to be unique to the size and color of that one item in the Amazon platform.

If products arrive without FNSKUs, not only will they go to the problem-solving area, but Amazon will charge $0.20 per label to do that for a merchant.

  • TIP: Labeling-Individual Items vs. Items Sold as a Set

If sending an entire case of things, and a seller wants to sell those items individually, the outside of that box shouldn’t have a barcode. If it does, Amazon may ship an entire case to the unsuspecting customer that only wanted one, for the price of only one. If selling a set of something, they need to be packaged together with any of these stickers:

  • This is a Set: Ready to Ship
  • Sell as a Set

Mind Weight Limits for Boxes Headed to Amazon

Keep boxes light, or at least under 50 lbs (23 kg).

  • If the product is more than 50 lbs. (23 kg) by itself, and less than 100 (45 kg) lbs., make sure to mark it “Team Lift.”
  • More than 100 lbs. (45 kg)? Then mark it “Mechanical Lift.”

If sellers don’t follow these rules, and repeatedly send heavy boxes—then there’s a risk of being blocked from sending any inventory at all. No inventory, no sales.

Bubble wrap items that can be scuffed

Use Proper Dunnage—Packing Materials Inside Boxes Must Meet Amazon Specs

Most people can recall the pain that comes from receiving a big box of packing peanuts. The static cling has them sticking to odd things in weird spots. They fly all over. And peanuts are difficult to clean up. Amazon thinks so too; so no peanuts!

Amazon also doesn’t allow shredded paper, grass or other loose packing materials. To keep out of the problem-solving area, where there’s a special vacuum for that stuff, use air pillows, giant sheets of 60-lb. weight kraft paper or polyethylene foam sheeting.

It’s also okay to bubble wrap individual fragile items inside a box. If those items are fragile, it’s good to affix the bubble wrap with tape to keep the item safe inside the Amazon warehouse. The trick here is to make sure that the item barcode and any expiration date info is visible without removing the bubble wrap.

Some products come with a perforation that allows retailers to set up an easy display. Perforated boxes must have come apart in Amazon’s past, because now they are required to survive a three-foot drop test. The box can’t pop open when it’s dropped on any of six sides or on its corner (just how many times are they dropping things?). To avoid this issue, wrap those boxes in plastic.

  • TIP: Labeling-Individual Items vs. Items Sold as a Set

Do This

  • Use air pillows and bubble wrap
  • Use giant sheets of 60-lb. weight kraft paper
  • Use polyethylene foam sheeting

Dont Do This

  • Use packing peanuts
  • Use shredded paper
  • Use grass

Polybagging for Success Inside Amazon’s Warehouse

graphic of common poly mailer sizes

Amazon sellers need individual products to be packaged to weather the warehouse. Nothing should be loose. If a product doesn’t come in a box or bag, then place a polybag around it to keep the dust off and keep it all together.

Liquids need to be polybagged. And make sure to bag smelly stuff—that keeps perfume from seeping into products in the next bin.

All bags should be snug around the product, sealed or taped within three inches of the product’s edges and allowing all the barcodes to be easily found, read and scanned.

Any polybag more than 5 inches wide needs a suffocation warning in large type. The bigger the bag, the bigger the type and nothing smaller than 10 pts.

There are many more Amazon FBA Prep requirements for pallets, hazardous products, and batteries. But these rules cover most products that ecommerce merchants are fulfilling themselves. For more information, read through the various rules and regulations covering these topics in Amazon’s Seller Central Help section.

Leave the FBA Prep to the Professionals!

Get a Free Quote from eFulfillment Service and see how we can simplify your FBA Prep!

Risks Associated with Managing FBA Prep In House

Before trying to save money by slogging through Amazon’s packaging requirements, labeling and shipping rules, penalty fees and labor intensive processes, look at the true costs of trying to managing Fulfillment by Amazon (FBA) Prep in-house.

woman packaging an order to be fulfilled

Packing Boxes is Time Consuming

The most important risk to packing boxes headed to Amazon warehouses is the lost time that ecommerce merchants should be spending promoting products and managing their business.

Slow Inventory Replenishment Leads to Lost Sales and Damaged IPI Scores

What’s the risk associated with getting Amazon’s shipping rules wrong? Inventory could spend two days or two weeks waiting for a human to scan it into Amazon’s inventory. And during the peak selling season, delays are longer and more critical. Being out-of-stock risks lost sales now or a damaged IPI score longer term.

Mis-Managed Inventory Can Lead to Big Headaches

In addition to having inventory stalled in Amazon’s problem-solving area, there are other ways inventory can be mis-managed without professional fulfillment help. If using multiple channels, it’s important to sync online orders across all those channels in real-time. Having inventory go unsold because they don’t know they have it or selling inventory they don’t have on hand are two major problems sellers face when managing their own FBA prep.

In-House Inventory Management Means Increased Costs

Whether merchants buy inventory management software off the shelf, or hire developers to build it, they’re footing the whole bill. So be prepared for those unavoidable costs.

Want to Skyrocket Your FBA Business?

Using a 3PL for your FBA Prep and FBM service can free up your time so you can focus on what matters, selling great products!

IPI Scores May Suffer

If products are out of stock, even if they are in Amazon’s building at the problem-solving area, merchant’s IPI scores suffer. (More about that in the next section.) Additionally, units that aren’t properly protected, can get mangled inside Amazon. When Amazon ships those units to customers, they lower a merchant’s IPI score by returning the item as “damaged”.

Unplanned Services—Hidden Charges Sellers Face

If items aren’t properly labeled, Amazon reserves the right to label them and charge the seller, under Amazon’s Unplanned Services. The same is true if they feel sellers need to bag, bubble wrap or tape items. If the seller fails again, after they give the seller 21 days to learn to do it properly, then Amazon charges sellers even more per item.

Unplanned Services At Amazon Include:

  • Relabeling to replace missing labels

 

  • Bubble wrapping to conceal sharp edges or protect fragile items
  • Bagging to contain loose products

 

  • Taping for any number of reasons

Amazon tracks and measures how often Amazon sellers require unplanned services over 120 days, assigning a Performance Coaching Level of Standard (zero fees), Elevated (fees) or Critical (Elevated fees x 2). It takes 21 days of good behavior to move to a lower Performance Coaching Level.

High Rent Costs Associated with Warehousing Products

If merchants are warehousing their products themselves, they’ll cover the rent for the space too. If that’s the guest bedroom, an empty office, or an urban area—those rents are a high price to pay.

Extra Capital Needed to Purchase and Store Empty Boxes

Merchants have to figure out what size boxes they need, negotiate packaging prices, and prepare for supply chain issues. In addition, they have to ensure they have to pay for all those empty boxes and space to store them in-house.

Volatile Staffing Costs

Either sellers are hiring people to do this work, or taking staffers away from their primary responsibilities. If merchants hire folks to handle peak season Fulfillment, they’ll have recruiting, management and benefits costs, too. And then the heartache of layoffs when things slow down.

How Do Amazon IPI Scores Affect Fulfillment By Amazon?

About three months after merchants start selling on the Amazon marketplace, Amazon will review their sales activity and give them a score called an Inventory Performance Index (IPI). For them, a good scenario is one where they have lots of orders going out, they don’t have too much inventory on the shelves and they’re never out of inventory. A merchant’s ability to maintain lively ongoing online sales, without running out, is captured in the retailer’s IPI score.

IPI score thresholds change.

In 2018, an ecommerce business needed to have an IPI score of 350 or above for Amazon to be happy. It has been as high as 450.

As of January 1, 2024, sellers with a score below 400 will be asked to meet additional requirements or reduce the amount of inventory being housed at Amazon.

Rethink Your FBA Strategy!

See How Using a 3PL for Your FBA Prep service needs could simplify your business. Get a Free Quote from eFulfillment Service Today!

Ways Merchants Thrive When Outsourcing FBA Prep Fulfillment

Rather than trying to pull off FBA Prep in house, Amazon sellers can hire a professional fulfillment center to prep inventory for Fulfillment by Amazon. In addition to following FBA Prep Service best practices, an FBA Prep Service provider can also help by storing excess inventory until Amazon needs it.

FBA Prep Services Allow Sellers The Opportunity to Build Their Ecommerce Business

No one knows as much about their products and how to promote their online business than ecommerce merchants do. And professional fulfillment centers are designed to cost effectively meet Amazon’s regulations, taking advantage of economies of scale, buying power, and technology.

Online product research tips for Amazon product trends 2023

Clients who started using eFulfillment Service for FBA Prep Services, report saving as much as $1,000 per pallet in penalty fees, from excessive inventory and long-term storage, or errors like the wrong FNSKU label.

FBA Prep Services Speed Inventory Replenishment at Amazon

Slow inventory replenishment is a harsh reality merchants face when not using expert FBA Prep Services. Utilizing a FBA Prep Service provider can help streamline inventory replenishment ensuring products are always in stock and ready to ship.

Avoid Misplaced Inventory Using Experts & Fulfillment Software

There are two problems that can arise when merchants try to manage their own inventory. They have inventory go unsold because they don’t know they have it or they may be selling inventory they don’t have on hand.

For example, Amazon only updates twice daily, at midnight and noon. If a merchant is selling on both Amazon and Shopify, then Amazon could be selling a product it doesn’t know is out of stock.

At Amazon, out-of-stocks and backorders will affect seller’s IPI (Inventory Performance Index) scores. A 3PL partner should provide guidance on how to use cart inventory, separating inventory for particular channels or marketplaces based on that marketplace’s practices. The client care team at a professional fulfillment center will be able to help merchants with strategies to use the software to manage inventory and establish reliable low stock thresholds.

Returns from online orders will need to get back into inventory where appropriate, quickly and accurately.

And Amazon removal order shipments don’t follow Amazon’s own rules. Cartons will arrive with mixed SKUs, damaged packaging and packing slips with incorrect quantities. Merchants have to stop building their business to sort out the mess and inspect every item for damage. Using a receiving team that is accustomed to sorting Amazon’s removal orders, supported by inventory control software will help keep inventory ready for sale to consumers.

Decrease Technology Costs for Inventory Management

If a merchant chooses to manage their own inventory then they’ll need to buy inventory management software or hire someone to build it—neither is cheap. When working with professional FBA Prep Service centers, tech costs are divided across many clients and thousands of shipments every month.

Hiring a FBA Prep Center Avoids Long-Term Storage Fees

Amazon may charge penalty fees for inventory in the warehouse longer than a year or if it’s not selling fast enough. If they want a seller to remove inventory from their warehouses, there’s a charge for that too: removal fees. These fees are in addition to Amazon’s rates to store, pick, pack and ship your products, making it very hard to predict expenses and understand the true cost of FBA.

Standard Amazon Removal Fees:

  • Up to 0.5 lb is $1.04
  • 0.5 to 1 lb. is $1.53
  • 1 lb. to 2 lbs is $2.27
  • More than 2 lbs., then expect to pay $2.89 + $1.06 per lb.

Oversize & Special Handling Amazon Removal Fees (Includes Apparel, Shoes, Watches, Jewelry & More):

  • Less than 1 lb. is $3.12 per item
  • 1 lb. to 2 lbs. is $4.30 per item
  • 2 lbs. to 4 lbs. Is $6.36
  • 4 lbs. to 10 lbs. Is $10.04 per item
  • More than 10 lbs. $14.32 + $1.06 for every lb. more than 10 lbs.

Good news? Once you send the removal order, you won’t be charged excess inventory fees while Amazon collects and ships your inventory.

The bad news? Removal orders often arrive in a jumbled mess and you’ll have to sort SKUs, check for damage and re-inventory your products.

Avoid Increased Real Estate Expenses by Centralizing FBA Prep Inventory with a Fulfillment Partner

USA Fulfillment Warehouse Map

Warehousing inventory is expensive because oftentimes there’s high rent associated with space. Look for an FBA Prep partner that is centrally located, to reach Amazon facilities all over the country, and offers economical storage.

Having a fulfillment partner gives merchants the ability to effectively store all their inventory under one system. So they know where every unit is. It’s a multichannel world and the right fulfillment partner should be able to work with Amazon and other sales platforms, like eBay, Walmart and a merchant’s website.

No Need to Buy & Store Packaging Materials When Using a FBA Prep Partner

FBA Prep Service companies get better pricing on ecommerce boxes because they buy in bulk to cover the needs of all their clients. When outsourcing FBA Prep activities, merchants don’t have to tie up capital in empty boxes, or the space to store them. And they don’t have to guess what size boxes they’ll need. And they don’t have to negotiate packaging prices, or anticipate supply chain issues or seasonal challenges. Providing merchants with the right packaging at a lower cost is part of the benefits of outsourcing FBA Prep needs.

Use Kitting to Quickly & Cost-Effectively Prep Products for FBA

photo of skincare items kitted into a package

The most cost-effective way to make sure inventory is ready for an Amazon warehouse is to set up a kitting project with a FBA Prep partner. In short, the fulfillment center can poly bag, bubble wrap and barcode a merchant’s products in an assembly-line fashion.

Watch Out For: Internet retailers sending to Amazon and a different marketplace, like Walmart, may need to have some inventory with a FNSKU barcode, and separate inventory with a UPC barcode. Look for a partner that has technology and processes to keep these products from getting mishipped.

Why Are FBA Prep Service Pros So Valuable?

We’ve spent the last few sections talking about how FBA Prep Service providers are equipped with experience, technology and materials to inspect, package, label, ship and store products so that Amazon will add them to the Amazon seller’s inventory, making them available for sale.

Here are the top reasons that professional FBA Prep centers help sellers out, quick and simple:

  1. Sellers save time that they can devote to building their business.
  2. Sellers don’t have to invest in people and real estate to perform prep services and store inventory.
  3. Sellers don’t have to invest time and money in technology to work with carriers, marketplaces and internet shopping carts, or track inventory.
  4. Sellers don’t have to learn Amazon rules, or keep up with them.
  5. Sellers benefit from the variety and discounted cost of packaging and filler purchased in bulk.
  6. Sellers who participate in multichannel selling need fulfillment outside Amazon for additional marketplaces, with additional requirements.
  7. Sellers don’t get penalty fees, long-term storage or damage to IPI scores for having too much inventory with Amazon.

Rethink Your FBA Strategy!

See How Using a 3PL for Your FBA Prep service needs could simplify your business. Get a Free Quote from eFulfillment Service Today!

Amazon’s FBA Prep Services: Pros & Cons

Amazon offers their very own FBA Prep Services. So, essentially you can pay Amazon to prep your stuff for Amazon, but is it really worth it?

Pros:

  • Using Amazon’s FBA Prep Services can help ensure correct packaging and preparation which should help reduce delays.
  • And there won’t be any post-prep errors that send products to the problem-solving area, and so no surprise fees or IPI penalties.
  • Since Amazon knows their own environment, in theory, a seller’s products should be protected while sitting in Amazon fulfillment centers.

Cons:

  • Using Amazon’s planned prep or labeling services have the potential to delay full receipt of shipment.
  • Unplanned prep can tack on even more time to receiving, thus delaying shipments even longer.
  • In usual Amazon fashion, there are many FBA Prep Services fees. And Amazon has the sole discretion to determine which prep services they perform on a seller’s products—so good luck trying to figure out what those fees will be in advance..
  • Amazon may choose to automatically include FBA Labeling Service and that also comes with a per-item fee.
  • Sellers still have to figure out what to do with slow-moving inventory to avoid long-term storage fees, meaning they’ll have to find somewhere else to put that inventory.
  • If a seller is storing all inventory at Amazon, and uses several marketplaces (i.e. Amazon, Walmart, Seller’s own website), they will still have to deal with the pain of pulling inventory out of Amazon and changing it to fit the requirements of other marketplaces.

How To Find The Best FBA Prep Services Fulfillment Center

How can sellers make using FBA easier? Use a professional fulfillment or third party logistics company (3PL). Fulfillment centers can help Amazon sellers avoid penalty fees, lost or delayed inventory replenishment and out of stocks. Amazon inventory preparation services are commonly called FBA Prep Services, and include ecommerce product inspection, inventory management, packing and shipping.

Find a third-party logistics company (3PL) specializing in FBA Prep Services

warehouse worker at computer

Look for a company that provides clear, easy to understand pricing for FBA Prep services. Make sure they also don’t impose long-term storage fees, have order minimums or SKU maximums, so as not to go from one set of penalty fees to another.

A 3PL should have experience with Amazon labeling regulations. As with every step of its processes, Amazon has specific requirements—we’ve covered many of those regulations in this whitepaper. The labels on the cartons have a set of parameters, as do every item inside.

The right fulfillment house will know Amazon’s regulations as they are currently, and also, have a process for adapting to changes in the rules as they occur.

For example, in recent years, Amazon changed accepted carton sizes from 27 in. (69 cm) to 25 in. (63 cm). Knowledgeable Amazon Prep centers shared that change with clients, so that manufacturers could ship in smaller cartons. Additionally, they repacked inventory already stored in the wrong-sized boxes into smaller cartons where necessary, to avoid Amazon penalty fees.

FBA Prep Services Near Me … Is That Important?

Having FBA Prep Services located in the right spot is key to being effective. In the U.S., a centrally located FBA Prep Services Fulfillment Center can serve sellers in many ways and can often be a better option than choosing a local warehouse .

  • Fulfillment centers located away from urban areas and coastlines have the ability to offer less expensive storage rates since real estate is typically cheaper in these areas.
  • Finding a fulfillment center that can guarantee quick shipping times to either coast, to the south and Chicago is good for customers.
  • In recent years, merchants shipping inventory from manufacturing overseas to the U.S. have used many different ports, changing based on port delays. Some logistics partners have freight programs and partners to help with cross-country shipping, allowing sellers more flexibility.

The Best FBA Prep Services Pricing Practices

How much should Amazon sellers pay for FBA Prep Services? The best FBA Prep Services pricing is essentially three actions: Packaging, Pick & Pack and Inventory.

FBA Prep Services Pricing for Packaging, Including Labeling

Preparing products to survive Amazon’s robots and conveyor systems is a little like dressing a football or hockey player: use lots of protection and make them easy to identify.

FBA Prep Services protecting ecommerce products may include:

  • Polybagging against dust and dirt—especially good for apparel. All plastic bags must have suffocation warnings and there are lots of specifications on those messages.
  • Bubble wrapping to survive drop tests or prevent sharp edges from injuring the workers or machinery.
  • Wrapping and taping to keep boxes from coming open, which is especially important for perforated boxes that will also need to survive drop tests.

Labeling services may include:

  • Suffocation warning labels for plastic bags, if it’s not printed on the bags
  • Notices for items sold as a set
  • Relabeling on top of new bubble wrap
  • FNSKU labels, Amazon’s proprietary barcodes

For the best 3PLs offering FBA Prep Services, protecting and labeling products is a kitting project. Once completed, the ecommerce fulfillment center can then store products ready-to-be-shipped to Amazon warehouses for online orders. Expect a nominal set up fee. And then per unit fees for the volume of your labeling project.

For example, bagging and labeling a carton of t-shirts:

SKU labeling + bagging: $20 set up + 30¢ per unit

Experienced fulfillment centers will offer prep packages, like SKU bagging and labeling, as a combo, for one easy fee. Or SKU labeling on a per unit basis.

Watch Out For: Some fulfillment centers will charge a low per unit cost, adding a separate fee for materials. Internet retailers need to make sure they’re not a victim of hidden materials fees by asking in advance.

FBA Prep Services Pricing for Pick & Pack

Because the order going to an Amazon warehouse is likely to replenish a large chunk of inventory, the best FBA Prep Service centers may modify typical ecommerce approaches to pick and pack charges. If a FBA Prep partner is able to ship a complete carton, it’s helpful for Amazon merchants if the pick and pack charge is based on the weight of the carton, versus the number of units.

For Example: an order from Amazon for 75 widgets, (1 carton):

Pick and Pack (under 5 lbs.) 50¢ per item

Pick & Pack (5 lbs. & up) 75¢ base fee + 35¢ per pound, min. $20 per order

A 6 lb. carton of 75 items would only be $20 (versus $37.50 using per unit prices)

Watch Out For: Refilling sellers Amazon inventory needs to happen in a timely manner. Some fulfillment centers batch FBA Prep orders, sending after several days, and sellers risk out-of-stocks when relying on those companies.

FBA Prep Services Pricing for Storage

Unlike direct-to-consumer fulfillment, inventory waiting to go to an Amazon warehouse doesn’t have to be in several locations or within two-day ground delivery to urban centers. Instead, Amazon sellers wanting economical storage should look for a centrally located fulfillment center, away from expensive real estate like coastlines or cities.

The best fulfillment companies use professional inventory management software, updating as shipments go to Amazon and inventorying any returns that are able to be resold. If a merchant is also using a FBA Prep partner for ecommerce shipments from their website, as well as other marketplaces like Walmart and eBay, then it’s vital they integrate with all those marketplaces.

FBA Prep storage will likely be based on cubic footage. Amazon sellers should make sure they are only paying for space they are using. Look for FBA Prep Service providers who don’t charge fees for a full pallet, 64 cu. ft., if cartons are only occupying 2 cu. ft.

Watch Out For: The best FBA Prep Services partner re-evaluates storage space weekly, so ecommerce merchants don’t pay for storage of cartons and pallets that have already shipped to Amazon warehouses. If internet retailers have to wait a month for storage volume to be updated, they are paying to store the same inventory in two places.

FBA Prep Services Pricing for Receiving & Inspection

Charges for receiving inventory into a merchant’s fulfillment center’s warehouse can be a piece rate or hourly. Some FBA Prep logistics companies will outline a fee for inspecting and counting a shipping container or a pallet as a project fee. Any of these FBA Prep receiving approaches is appropriate and fair because the fee is based on the project’s size and complexity.

If a fulfillment center offers free receiving, then the cost for receiving services is captured somewhere else like storage rates or packing fees. Those costs are the average of all the client’s receiving projects. If the receiving project is relatively organized and simple, a merchant might be paying more to cover the costs of another client’s mess.

Many FBA Prep Services call out inventory inspection services as a specialty. A professional fulfillment center inspects products on arrival, whether a merchant is shipping directly to consumers or Amazon, so it’s part of normal service.

FBA Prep Services Pricing for Shipping

Don’t be distracted by a fulfillment center’s discounted shipping rates, if only using them for FBA Prep. Most ecommerce sellers use their Amazon account for shipping and get the best shipping rates that way.

Watch Out For: Most 3PLs will charge a third-party shipping fee if a seller doesn’t use their carrier accounts for ecommerce orders. That policy should only apply to direct-to-consumer orders. Third-party shipping fees shouldn’t apply to shipments going to Amazon.

Summary

The “Complete Guide to FBA Prep Service” covers the critical aspects of managing Fulfillment by Amazon (FBA) prep, including understanding penalty fees, the risks of in-house management, and the importance of Amazon’s Inventory Performance Index (IPI) scores. It highlights the benefits of outsourcing FBA prep to professional fulfillment centers, which can save time, reduce costs, and ensure compliance with Amazon’s stringent requirements. The guide also explores the pros and cons of Amazon’s own FBA prep services and provides insights on selecting the best FBA prep service partner. Clear pricing practices and strategic location considerations are emphasized to optimize storage and shipping efficiencies.

Key Points Recap:

Understanding FBA Penalty Fees

• Amazon has strict guidelines for sending products to their warehouses, and non-compliance can lead to penalties.
• Common mistakes include improper labeling, using the wrong packaging materials, and not adhering to weight limits.

Risks of Managing FBA Prep In-House

• Time-consuming processes and potential for slow inventory replenishment can harm sales.
• Mismanaged inventory can lead to stock issues, increased costs, and damaged Inventory Performance Index (IPI) scores.

Impact of Amazon IPI Scores

• IPI scores are critical for maintaining good standing with Amazon.
• Scores below a certain threshold can lead to additional requirements or reduced warehouse space.

Benefits of Outsourcing FBA Prep

• Professional fulfillment centers offer expertise, save time, and provide economies of scale.
• They help streamline inventory replenishment, ensuring products are always ready to ship.

Amazon’s FBA Prep Services: Pros & Cons

• Pros: Ensures correct packaging and reduces delays and surprise fees.
• Cons: Potential for shipment delays and various fees, along with complexities of managing inventory across multiple marketplaces.

Choosing the Best FBA Prep Service

• Look for clear pricing, experience with Amazon regulations, and flexibility to adapt to rule changes.
• Consider location for cost-effective storage and quick shipping times.

Pricing Practices for FBA Prep Services

• Costs typically involve packaging, pick & pack, and storage fees.
• Be wary of hidden fees and ensure you’re only paying for the space and services you need.