How to Use an Amazon Prep Center to Enhance Your Business

‍When you send your products to Amazon, they must be packaged and labeled in line with Amazon's requirements. If that’s not done, Amazon may return the shipment or repackage your product and charge you for that.

If you sell many products and want to scale your sales, preparing your inventory will take essential time and effort. That is why many sellers use FBA prep centers to streamline their business.

Keep reading to find out how using a prep center helps streamline your Amazon business and how to select a prep center.

What Is FBA Prep Center?

Amazon FBA preparation center is a service provider preparing your inventory for fulfillment according to Amazon standards and shipping it to Amazon fulfillment centers.

The prep center’s services include bubble wrapping, bagging, labeling, packaging, and shipping.

Online arbitrage and wholesale sellers often send their products directly to the prep center, where the inventory is packaged, labeled, and shipped to the Amazon fulfillment center. You can do the same with a private label product if a supplier is not offering Amazon prep.

Related: How Does Amazon FBA Work. Is Amazon FBA worth it in 2023?

6 Reasons To Use The FBA Preparation Center

1. Time-saving service

Prepping products will take hours if you have many orders, especially in the wholesale business. In addition, many orders can come up before holidays, during Black Friday, Amazon Prime Day, or other significant events. Prep сenter will handle your inventory prep timely and effectively.

2. Helps avoid delays in delivery

Prep centers have a professional knowledge of Amazon packaging and labeling standards. That helps prevent mistakes and ensures Amazon will not return the shipment.

3. Saving on storage space

To prepare your inventory, you must have a warehouse to store it and need space to process it — wrap it, put it in the boxes, print labels, etc. That may be a challenge for sellers. The prep center acts as a warehouse and takes care of prepping.

4. Business optimization

Prep center helps you optimize fulfillment and deliver orders to Amazon fulfillment centers in the shortest possible time. Using this service allows you to free time, focus on sourcing high-profit products, and scale sales.

5. Save on sales tax

When you sell on Amazon, sales tax may apply. Some prep centers are located in tax-free states (e.g. Montana, Delaware, Oregon, and New Hampshire). Using their address allows for saving money on sales tax.

6. Save on printing labels and supplies

You must label your products when you send them to the Amazon fulfillment center so they can be found and tracked. To print FNSKU labels, you need a thermal or laser printer. If you don’t have one, you’ll have to buy it. In addition, to package inventory, you need shipping boxes, packing tape, packing materials, and other supplies, and you must replenish these supplies. A prep center does that for you.

How To Select a Prep Center?

There are many prep centers offering their services on the market. However, not all of them may be suitable for your business. Therefore, when choosing a prep center, you must take into account some essential criteria.

Criteria to select a prep center

Location

The shorter the product's shipping distance, the less the shipping cost. Therefore, the prep center’s location can save you money. For example, if you often source products from overseas, you can look for a prep center close to a port to ensure smooth outbound shipping. Inventory replenishment time also matters — you must replenish inventory as soon as possible.

Price

Prep centers offer different pricing models — per-item fees or fixed monthly payments. The latter is profitable for sellers with many orders. The US prep prices start from $1-2 per unit.

Product preparation time

Product processing time is crucial because you must quickly deliver orders to your shoppers. Lengthy delivery time can be a dealbreaker for a shopper when they purchase a product. On average, the preparation time for Amazon FBA products is 24-48 hours.

Warehouse capabilities

If your inventory requires specific warehousing conditions (e.g. your products are HazMat or belong to temperature-sensitive categories), you must check if the prep center can provide them. In addition, storage availability is essential. The warehouse must be able to receive your inventory when it arrives.

Inspection services

The inspection process helps reduce the risk of defective items, customer returns, and refunds. You must check that the prep center unpacks and inspects the shipment, ensures there are no missing items, and checks their condition.

How To Calculate Prep Center Cost?

For online arbitrage, wholesale sellers, and dropshippers who do product research, it’s essential to quickly calculate all fees, including prep costs.

Seller Assistant App allows you to do that right on the Amazon product page. Seller Assistant App’s FBA & FBM Calculator lets you quickly calculate all essential product metrics, including prep cost. The extension calculates ROI and Profit Margin, considering Cost of Goods, sales tax on Cost of Goods, Amazon referral fee, FBA fee, VAT, monthly storage cost, and third-party logistics cost (shipping costs and preparation expenses, including extra costs on fragile products).

In the Fees and logistics costs box, the FBA&FBM calculator shows:

• ‘Prep’ displays preparation cost;
• FBA or FBM costs;
• ‘Fees’ show the total amount of Amazon commissions;
• ‘R15%’ shows the Amazon Referral fee;
• ‘Sto’ displays the cost of monthly storage of goods in Amazon warehouses;
• ‘3PL’ indicates third-party logistics costs;
• ‘Ship’ is the cost of shipping the item.

Frequently Asked Questions

What is an Amazon Prep Center, and how can it enhance my business?

An Amazon Prep Center is a third-party service provider that helps Amazon sellers by preparing, packaging, and shipping their products to Amazon fulfillment centers. By using a prep center, sellers can save time and effort, ensuring that their products meet Amazon's strict requirements for packaging and labeling. This can lead to fewer returns, better customer reviews, and ultimately, more sales.

How do I find a reliable Amazon Prep Center?

To find a reliable Amazon Prep Center, you can start by searching online for prep centers in your target region. Check their reviews and testimonials, and make sure they are experienced in handling products similar to yours. You can also ask for recommendations from fellow Amazon sellers or in relevant online forums. Always compare pricing, services, and turnaround times before making a decision.

What services do Amazon Prep Centers typically offer?

Amazon Prep Centers offer a range of services, including:

• Receiving shipments from suppliers
• Inspecting products for damage or defects
• Labeling products with Amazon-specific barcodes (FNSKU)
• Preparing, packaging, and bundling items according to Amazon's requirements
• Shipping products to Amazon fulfillment centers
• Managing inventory and storage for sellers

How much does it cost to use an Amazon Prep Center?

The cost of using an Amazon Prep Center varies depending on the provider and the services required. Some prep centers charge a flat fee per item, while others offer tiered pricing based on volume. Additional fees may apply for storage, labeling, or other specialized services. It's essential to compare costs and services to ensure you're getting the best value for your business.

How can I ensure my products meet Amazon's requirements when using a Prep Center?

To ensure your products meet Amazon's requirements, clearly communicate your needs and expectations with your chosen prep center. Provide them with detailed product information, packaging guidelines, and any specific labeling requirements. It's also essential to monitor their performance, check for customer feedback, and address any issues promptly to maintain a high level of service and compliance with Amazon's policies.

Final Thoughts

Preparing products in line with Amazon packaging and labeling guidelines involves a lot of work. If you sell many products and want to scale your sales, preparing your inventory will take essential time and effort. That is why many sellers use FBA prep centers to streamline their business.

For online arbitrage, wholesale sellers, and dropshippers who do product research, it’s essential to quickly calculate all fees, including prep center costs.

Seller Assistant App allows you to do that right on the Amazon product page. It’s a popular new-generation tool that can help not only with calculating Amazon FBA fees but also with overall product research. It offers an impressive portfolio of valuable and handy features. It allows Amazon sellers to perform advanced product analysis and sales estimations.

Seller Assistant App is equally helpful for FBA beginners and Amazon professionals. It’s a must-have tool for all sellers engaged in product research.

Seller Assistant Аpp is an all-in-one extension incorporating features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.