Outsourcing your Amazon product prep to a third-party FBA Prep Service can seem like a daunting task, especially for newer sellers. Not only do you need to be assured that the Prep Services can receive and properly process your shipments, there are also numerous other things you will want to know. Confused about what to ask? Don’t be. Here are the Top 8 Questions you should ask when choosing an Amazon FBA Prep Service.
1. Cost
What is the TOTAL price per unit prepped? Some Prep companies show a low price to entice you to use their service, but when they add in all of the “extras” like labels, polybags, shipping boxes, and rubber bands, the price is often the same or more than the “higher priced” Prep Services.
2. Competition
Do they also sell on Amazon? – Definitely something to consider. Prep Services with experience as an Amazon seller can be a huge benefit, but in some cases, the Prep Services are actually competing sellers. Be sure you know who is seeing your inventory and your Amazon account.
3. Seller Central
Who creates the shipment? – Some Prep Services require you to do the entire shipment creation process and then allow them to print the labels. Others want you to even save the label files for them. Some Prep Services will create the entire shipment for you, allowing you to focus on the things that make you money. Some will even use your inventory management program (ScanPower, Inventory Lab, etc.) to create the shipment, while others have their own proprietary software that you will need to use. Find out how involved the Prep Service will be in the Shipment Creation process and make sure you can handle the parts that they won’t do.
4. Sales Tax
Are they in a Tax-Free State? This is really only an issue with Online Arbitrage (OA) orders. Wholesale and Imports should not incur sales tax at all. There are five (5) states that have no sales tax: NH, AK, MT, OR, and DE. Other states, like New Jersey and Pennsylvania, do not charge sales tax for certain categories like Grocery or Shoes. If your main business model is OA, the tax savings could actually cover the prep costs.
5. Ease of Access
Do they allow customers access to their warehouse? – Are you a Retail Arbitrage buyer? Do you need a Prep Service that will allow you to drop off your merchandise? You might need to visit the warehouse. But how do you feel about other sellers potentially seeing your products? Knowing whether customers have access to the working part of a warehouse may be a determining factor in whether you use a prep service or not.
6. Loading Dock
Do they have a Loading Dock – If a Prep Service doesn’t have a loading dock, how will they be able to accept wholesale or Import shipments? More importantly, how can they take advantage of Amazon’s LTL shipping, assuming your business grows to the point of forwarding large amounts of freight?
7. Returns / Removals
What about Returns and Removals? – What happens if an item is returned to Amazon by the customer? Will the Prep Service accept the return and make a determination as to whether the item is still sellable? What if you no longer wish to sell an item that is in the Amazon Fulfillment Center? Will the Prep Service allow you to create a removal order and have the items shipped to them? Will they forward them to the address of your choice? Sell them on Ebay for you? Donate them? If so, how much do they charge for these services?
8. Storage
How long can I store my items at the facility? – Does the Prep Service offer short or long-term storage for your inventory? Is the price better than the storage rates at the Amazon Fulfillment Center? For example, will they allow you to remove seasonal items from Amazon and hold them until you are ready to send them back in? How much do they charge for storage?
Now what?
Choosing an FBA Prep Service can be a simple process when you know the right questions to ask. While this hasn’t been an exhaustive list, these 8 questions will definitely provide you with enough information to make an educated decision. Now you just need to email them or get them on the phone and keep a record of your findings. Once you’ve gotten enough responses, sort them by the things that are the most important and narrow down your choices. Or, …
May we recommend an Amazon FBA Prep Service (or two)?
Fill out the form on this page with some basic information, and we’ll narrow down the number of Prep Services and (hopefully) come up with a couple that can best meet your needs. Whether you’re a brand new seller on Amazon, or a large, well-established company, there’s no need for you to waste lots of time calling and emailing and interviewing countless FBA Prep Services. Let Prep4FBA handle the job, all at No Cost and No Obligation to you.
