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Wondering if a prep center is a good move for your business? Trying to find the right one?

The guide below will cover:

  • What an FBA prep service offers
  • The pros and cons of using one
  • How much they cost

And more! Keep reading to learn if using one is right for your business.

Featured Prep Centers

In this article, we’ll be taking a close look at Amazon FBA Prep Services – including what services they provide, how much they cost, and what some of the best options are if you’ve decided you want to use one.

What is an Amazon FBA Prep Center?

An Amazon FBA Prep Center is a company that will get your items ready to send to Amazon FBA warehouses for you.

A Prep service does the work of getting your items ready to send to FBA warehouses. There are services for every type of sourcing strategy – arbitrage, wholesale, private label, etc…

Rather than sending inventory to your home or warehouse, you will send it to your prep centers address. The prep center will then receive your shipment for you, inspect the products, and then do the necessary prep to send the items to FBA warehouses.

A prep center is a form of a 3rd party logistics or 3PL company that handles a portion of the shipping process for you. You might also hear prep centers referred to as prep companies or prep services. All of these are referring to the same concept where you ship your products to a company and they get them ready to send to Amazon for you.

What Services do Amazon Prep Centers Provide?

Amazon FBA Prep Services are designed to take all the heavy lifting of the logistics off your plate.

In general, if you use a prep service, then you will send your shipments directly to their address instead of to your own. They will then do all the work needed to get the products shipped to FBA warehouses on your behalf.

No more bagging and bubble wrapping! (Well, at least less of it…)

Not all prep centers service the exact same type of sellers, so it’s important to make sure the prep center you choose meets your needs.

Each prep center has their unique offering of services and areas that they excel in, but here are some common services that many provide:

  • Receiving
  • Inspection
  • Sticker Removal
  • FNSKU Labels/Barcodes (or basic labeling, based on your needs)
  • Shipping Labels
  • Storage (most include free storage ranging from 7-30 days)
  • Bundling/Kitting/Multi-packing*
  • Poly Bagging
  • Suffocation Warning Labels
  • Dunnage/Box Filler
  • Damaged Item Handling
  • Repackaging
  • Long Term Storage Fee Avoidance
  • Package Forwarding
  • Expiration Labeling (if necessary)
  • Fragile Item Preparation*
  • Loose Product Preparation
  • FBA Removal Orders/Inventory Processing**
  • Container Handling
  • Order Fulfillment
  • Professional Product Photographs*
  • Product Tracking Technology (separate from Seller Central)
  • Import/Export Management
  • Hazardous Materials (Hazmats)*
  • Books* (Some places specialize in books- find these if you primarily deal with books
  • Palletizing*
  • Private Labeling
  • Shipping Services
  • Bubble/Shrink Wrapping
  • Package Design/Marketing*
  • Product Assembly
  • eCommerce Fulfillment
  • Promotional Inserts*

*Typically incurs an extra fee

** Either incurs an extra fee at a standard prep center, or you go through a place that specializes in FBA removals for ALL your FBA removal orders

Benefits of Using a Prep Service

The main benefit to using a prep service is that you will be outsourcing the prep and shipping of your items, and will be freeing up a significant amount of time versus doing it yourself.

This will free your time to be able to focus on the highest value activities you can in your business.

Packing and shipping are a necessary constraint on the business – but the bigger you get (or want to get), the more important it will be to find some way to offload this work. Hiring in-house workers is one option. Getting a prep center is another.

This becomes increasingly important as your business grows. In the beginning as you are learning how everything works, the amount of time it takes to prep and ship your items might not eat into the time you can spend sourcing all that much.

But eventually, you’ll reach a point where prepping and shipping is a major bottleneck – especially if you are dealing with bulk orders of any kind.

Leveraging a prep center will allow you to offload the prepping and shipping to remove that bottleneck, meaning you are free to spend more of your time on sourcing new products and expanding your business. If you are running an online retail business, you are almost certainly earning a higher amount per hour sourcing products vs shipping products.

This means by outsourcing to a prep center you are able to spend more time sourcing products, which should lead to more overall profit for your business.

Don’t underestimate the value of getting your personal space back either!

Buying A Duplex
Boxes ready to go to FBA warehouses taking over my kitchen. It was always like this in the early days, and this was just the stuff ready to go out.

Prep Centers Aren’t As Expensive As You Think…

The actual cost of using a prep center is a lot lower than what many people think. We’ll talk about what you PAY a prep center below, but here I’m referring to the fact that prep centers help reduce or eliminate costs that you would incur with or without the prep center.

Sometimes this is directly from reduced shipping costs by choosing a prep center that is close to your supplier. If you can use a prep center that is closer to your location than your warehouse, you can often save a substantial amount on shipping.

We’ve had wholesale orders where we’ve saved over $1,000 in shipping costs by sending to a prep center instead of to our warehouse.

Another benefit and cost saving can come from a prep center being able to ship items for less than what it costs you to do it in house on a per item basis. Depending on the size of your business and team, this is very possible.

Choosing a prep center in a tax free state can be another way to get substantial savings, especially if you are doing online arbitrage. By shipping to an address in a tax free state you will not pay any sales tax on the online arbitrage items sent. This can lead to very substantial savings, and in many cases the savings are greater than the cost of actually using the prep center. If you do a significant amount of online arbitrage, a prep center in a tax free state is something I recommend considering.

One of the final benefits of using a prep center is that you don’t need as large of an in house team. If you hire an in house team you will have to make sure that you have consistent work for them. You will also have to balance having the right amount of product so they have enough to do, but you don’t have too much so that your inventory is sitting idle for too long at a time.

By using a prep center you don’t have to worry about that. You ship your inventory to them, and they are the ones who will deal with the staffing challenges. If you have variability in the size and timing of your shipments, this is a major benefit of using a prep center.

The last benefit that I will mention in this post is that you will need a smaller warehouse, or won’t need one at all. The cost of renting or purchasing a warehouse space can be very substantial, and by using a prep center you can avoid some of these costs.

Loading dock at my current warehouse. If we never utilized a prep center, we’d need an even larger space.

Drawbacks of Using a Prep Service

Using a prep center isn’t right for everyone though, and there are some drawbacks.

The two biggest drawbacks are that you have less control of the process and its an additional expense.

When you are using a prep center you are working with a 3rd party vendor. When you ship items to them you are relying on them to prep them correctly, and ship them out in a timely fashion. Beyond checking in via phone or email you don’t have any control over the process.

This can lead to challenges if errors are made or shipping timelines aren’t as promised. In the event something like this happens you will have to work with the prep center to get it resolved. In most cases that won’t be a problem, but it can be a bit more difficult than fixing something with an in house team.

Then of course no business works for free, so the cost is another potential drawback of using a prep center. This one ultimately depends on the scope and scale of your business. For some the cost can be less and it’s a benefit, for others it can be more expensive and it’s a drawback. Ultimately you will have to run the numbers for your business to determine which it is for you.

With that in mind, here are three situations where prepping your own items may make more sense:

  1. You are just getting started with limited capital.
  2. You have a reliable team that can perform the same tasks for cheaper, and somewhere you can directly supervise.
  3. When introducing new products to your product offering.

When comparing a prep service to using your own, in-house team, make sure you are accounting for all costs of having a local team. This includes all payroll taxes, unemployment insurance, your warehouse space, timekeeping software, a payroll service provider, etc. Once you have accounted for all of your costs you will be able to make an apples to apples comparison.

When receiving your first shipment from a supplier, especially on a private label item, it’s often a good idea to have that come directly to your location. This allows a more thorough inspection. Once you are happy with the quality from your supplier, then routing your future shipments to a prep service is reasonable.

Those are a few of the drawbacks to think about when it comes to using a prep center.

As you go through the process of weighing the benefits versus drawbacks, I recommend thinking about what is the most valuable task you can do in your business. Most likely prepping and shipping items is not the most valuable use of your time.

Assuming you reach that conclusion, then it’s a matter of deciding if you should outsource to a prep center or your own in house team.

How much do FBA prep services cost?

The cost of using an FBA prep center will vary depending on what you are having them do. If they are receiving your inventory, putting a label on it, and shipping it to FBA on your behalf, you will likely pay between $0.50 and $1 per unit.

If you are doing very large volumes, you will likely pay less. If you are sending them very large items, or items that require a significant amount of prep, then you will likely pay more.

The cost will vary significantly based on your needs. I’d recommend getting quotes from several different prep centers to see which one offers the right combination of price and service level for your business.

Choosing the Right Prep Center

Location

The location of the prep center you choose is a very important factor in the decision as it can have major implications on how much savings you will get by using one.

If you are an online arbitrage seller, then using a prep center that is located in a state that does not charge sales tax is a very good idea. This was discussed above so I won’t belabor this point.

If you are a wholesale seller, then choosing a prep center that is located near your suppliers can save you a substantial amount in shipping. In general the less distance a shipment travels, the cheaper it will be. By using prep centers that are strategically located near your suppliers you will likely save money on shipping.

If you are a private label seller, then choosing a prep center that is near a port you are shipping to often is a good idea. The same concept applies here in that the less distance you have to ship your product, the cheaper it will be.

By choosing a prep center in the right location it is possible that the savings from sales tax or shipping will be greater than the cost of the prep service.

Storage Facilities

Some but not all prep centers will offer the ability to store your items for a period of time. If you are a seller who orders months of supply at a time, you may find it to be cheaper to pay for storage rates at the prep center’s warehouse instead of FBA warehouses.

To determine potential savings I’d recommend comparing the amount you’d save storing at your prep center vs the cost difference of shipping smaller batches to FBA warehouses. In many cases you’ll likely find that storing at a prep center can save you a substantial amount.

If your business needs the ability to store items, this is an important decision factor.

What Type of Products You Sell

The type of products that you sell will also impact which prep center you should use. For example if you sell books on Amazon, there are some prep centers that specialize in books.

Other prep centers are better equipped to deal with items that have special prep requirements. It’s important to make sure that the type of products you sell is something the prep center you choose is equipped to handle.

Product Tracking Software

Prep centers will offer varying levels of communication about where the inventory you send them is in the process of being shipped to FBA warehouses.

There are some prep centers who use product tracking software that you will have access to that shows exactly where things are at a given point in time. You can see which ones have been shipped out, what has been received, etc.

When choosing a prep center it’s important to find one that offers the level of communication and tracking process that works for you.

Independence and Trust

When you choose to work with a prep center you are giving a 3rd party a significant amount of information about your business. In doing so you want to make sure that you are working with a prep center you can trust.

When it comes to independence the main thing to know is if the prep center you are working with also sells on Amazon. If they are, it’s not the end of the world, but you want to make sure it’s not in a way that could potentially harm your business.

For example, if you source via online arbitrage and the owner of the prep center also sources via online arbitrage, the owner of the prep center will see the items you are sourcing. They could hypothetically then start sourcing those same items without you ever knowing. This is where there would be a lack of independence and could cause problems for your business.

Some prep centers are run by current and former Amazon sellers. This provides a high level of expertise in the process of shipping to FBA and can be a great value add.

When evaluating if you can trust a prep center, you can look at the reviews the prep center has, how they communicate with you as a prospective client, and how they answer your questions.

Prep centers are in the business of prepping and shipping items. They want to keep you happy so you keep sending them inventory. The vast majority are completely operating above board. This section is here simply to make sure you trust the prep center that you are working with.

Size of Your Business

When choosing a prep center it’s important to choose one that is a fit for how much inventory you will be shipping to their location.

If you are a very large seller consistently shipping products by the pallet or truckload, you need to make sure that the prep center you work with can handle this type of volume. If they can’t your inventory will end up sitting idle.

For high volume sellers there are very often discounts available based on the number of units you are shipping to a prep center. You’ll want to make sure you work with one of these, versus a prep center that charges a fixed price regardless of number of units shipped.

For smaller sellers you will want to look at what the minimum shipment sizes are. For example some prep centers charge a minimum fee of $25 for processing a shipment. If you are only sending 10 items at a time, this likely wouldn’t be a good fit.

As a small seller you ideally want to choose a prep center that doesn’t have cost prohibitive minimums.

There are prep centers that service a wide range of sellers, and you shouldn’t have a problem finding one that it is a fit for the size of business that you operate.

Getting Started With A Prep Center

Once you have used the steps above to choose a few prep centers that look to be a fit for your needs, then it’s time to get the process started.

You want to make sure that they are truly a good fit for your business, and don’t just look good on paper.

Set up Services or Request a Consultation

Some prep centers will allow you to setup services directly on their website. Others will require you to go through a consultation to get setup.

Many will offer the ability to go through a consultation to get your questions answered if desired. If they don’t offer a consultation most will offer phone or email support that you can reach out to for any questions you might have.

Don’t be afraid to ask any questions you might have during this process. It’s very important to make sure a prep center is a good fit for your business.

Once you’ve been able to get all of your questions answered and are confident in your choice, go through your prep center of choice’s process to become a customer.

Once you’ve done that you will be able to ship inventory to them.

Ship Your First Shipment to Your Prep Center

Once you are setup with a prep center it’s time to route a shipment to their location.

My recommendation is to ship 1 or 2 shipments of products initially. Then you can use those as a test run to make sure that the prep center you chose is a good fit for your needs.

I recommend paying very close attention to the process of how things go with your first shipment to a prep center. Were your items prepped in a timely fashion? Were you happy with the communication along the way? Did you run into any problems? Most likely things will go smoothly, but these are some questions to help you evaluate.

After the items the prep center you are working with arrive at FBA warehouses, it is likely a good idea to have a few units shipped to you to make sure everything is up to your expectations. You can do this by creating a removal order if you want to go the cheapest route. If you want the items faster, then creating a multi-channel fulfillment order is the way to go.

When you receive the items you can make sure everything is up to your expectations. Again, it’s very likely to be that way, but having a few units shipped to you is a good way to be safe.

Assuming things went well with the initial shipments or shipments you sent to your prep center of choice, then you can start routing more of your shipments to them.

Conclusion

Using a prep center can be a great addition to many businesses. It offloads one of the less desirable parts of the process, and it frees your time to focus on higher value activities for your business.

If you use this post the odds of choosing a prep center that’s a good fit for your business should be high. To make the process even easier, we’ve compiled a list of as many prep centers as we can find which you can access below.

Thanks for reading, and good luck in your prep center search!

If you are a prep center owner and are interested in being added to this directory, please email: partners@onlinesellingexperiment.com.

Full List of 170+ Amazon FBA Prep Centers

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