In today’s post I will be giving my take on a couple of questions that I have been getting fairly often recently. Those questions relate to whether I am using the Amazon commingled inventory option, and if I am using their FBA inventory placement service.
Let’s look at the FBA inventory placement option first. This service allows you to ship all of your standard size items to one warehouse, and all of your oversize items to one warehouse in your FBA shipments. In return for shipping to only two warehouses (2 assumes you have both oversize and standard size items) you are charged a fee per item. This fee ranges from $0.30 per item to several dollars per item depending on the item’s weight. Once your items arrive at the warehouse you sent them to, amazon will then transfer some of them to have them distributed across their warehouses as they see fit. This transferring of the items can add to how long it takes for items to be checked in and available for sale.
This is compared to using the “distributed inventory placement” setting within your seller account, which is the default option. The names are close, but what they do are quite different. With distributed inventory placement you will ship your items to a variety of warehouses for both standard size and oversize items. If I have a large shipment I am usually shipping to 4 to 6 different warehouses.
I am not using the “inventory placement” service and instead am using the default “distributed inventory placement” option within my seller account. The reason for this is that I am shipping in large enough quantities that I do not feel the fee is worth it for the added convenience. In addition, it often takes longer for items to be received if using “inventory placement” and I want my items to be available for sale as quickly as possible.
With that said, I do think inventory placement makes sense for some sellers. For example, if you are just starting out and have 10 standard size items to send into FBA, using the default distributed inventory placement service could require you to ship to 3 or 4 different warehouses. This likely wouldn’t be a very efficient use of time or money when you could enable “inventory placement” service and ship all 10 items in one box. The time savings and shipping cost savings would be well worth the $3 or so that would be charged in per item fees. HERE is a link to more details on the “inventory placement” service from amazon’s website.
Now, let’s get to the second item on the docket related to Amazon commingled inventory. This is an optional setting that can be used within your amazon seller account. Here’s a hypothetical example to illustrate how it works with this option enabled, you have a brand new copy of the game Monopoly, you send the item into FBA without a label, the item gets to amazon and they put it in a stack with all of the other copies of Monopoly, a customer buys “your” copy of Monopoly, amazon grabs a random copy of Monopoly from the stack and sends it to the customer who purchased from you.
There are some inherent risks involved with using the stickerless commingled inventory option. The main risk is the loss of control of the item that the end customer receives. In addition to this there is the risk that there are counterfeit products that were sent in by other sellers, or sellers that are trying to pass off items as new that should be listed as used. The problems arise when one of these counterfeit items or less than new items are sent to a customer that orders from you.
Using this option can greatly speed up the processing time of items, but it does come with some added risks as mentioned previously. Currently, I am not using the commingled inventory option and I am labeling all of the inventory I am sending to amazon. I may revisit this in the future, but for now, I label all of my inventory. HERE is a link to amazon with more info on the stickerless commingled inventory option.
If the amazon link doesn’t provide enough info for you, I have one more resource for you. Cynthia Stine, author of Make Thousands on Amazon in 10 Hours per Week, had a great post on her blog last week about the commingled inventory option and why she doesn’t use it either. HERE is a link if you want to check it out.
That’s all I have for today. If you have any experiences with either of these options, please share in the comments below. If you have any other questions or comments, please leave them below as well, or send me an email at firstname.lastname@example.org.