How to choose a 3PL Logistics for FBA prep
Getting your inventory ready for FBA (Fulfilled by Amazon) prep can be a bit overwhelming—you’re running low on stock, orders are coming in but you have hit a bottleneck—you can’t prepare inventory quick enough to be able to meet demand.
At this point you decide you need help from a third party, but the endless range of options have you a bit lost. You’re handing over full responsibility for a key function of your business over to a third party, you need to be absolutely sure that you have considered each and every factor and you’re making the right choice.
To help you get out of this tricky situation, this blog sheds light on what best FBA prep services is, why many companies choose to outsource it and some of the most important factors to consider when choosing an FBA prep service.
What Exactly Is FBA Prep?
When companies send their inventory to FBA, there’s actually a whole lot more to it than just packing everything haphazardly and handing it over. There’s a range of rules that your stock should meet to be accepted at the fulfilment center. While some of these rules apply to the entire inventory, others are highly specific to categories.
FBA prep is the process of preparing your inventory to send it into Amazon. While it primarily focuses on labelling and packaging, some sellers, especially those importing goods need also have an inspection of their inventory done.
Getting your FBA prep right is crucial. If you end up missing out on anything, Amazon might not even accept your stock and return it as is. Moreover, if you end up letting damaged items slip through and those items make it to the customer, who then file multiple complaints can affect your metrics, listings and even have your account suspended.
Moreover, with 2.5 million Amazon sellers operating currently and the number growing constantly, competition is growing at a breakneck pace. This makes hiring a FBA prep service all the more important.
Why Outsource FBA Prep?
When it comes to FBA, you primarily have three choices:
- You can choose to do it yourself.
- Let a third party service provider do it for you.
- Pay Amazon take care of it.
Since FBA prep involves a wide range of specifications and rules, it’s quite easy to mess it up if you choose to do it yourself. When you outsource it to a 3PL logistics service provider, you get to leverage years of experience and hands on expertise in helping different companies through FBA prep. They dramatically reduce the risk of your stock being rejected. Especially if you’re going for FBA prep for the very first time, you wouldn’t really know how complicated the process and you will be more likely to make mistakes.
Think about it, do you really have the time to inspect stock, make boxes, print out labels and make sure that everything is put together flawlessly? Or would you rather spend your time researching the market and meeting new clients?
According to Danny McMillan, Amazon seller and the host of Seller’s Sessions, outsourcing FBA prep allows him to utilize his time and effort in other key aspects of his business:
While there’s a range of different factors that you need to consider, with each depending on your business model and sales velocity, here are the most important ones.
When choosing a prep center you need to be highly strategic. If the majority of your shipment is private labelled, you are more likely to ship in large amounts of inventory from China. Identify the ports where your shipments arrive and choose a prep center nearby. Having a prep center nearby will dramatically reduce your trucking costs and help you save time, which wouldn’t really be possible if your prep center was located a 400 miles away.
Naturally, one of the most important factors for most entrepreneurs when choosing a 3PL logistics service for FBA prep is going to be price. Look around for 3PL logistics companies that offer different pricing models. If you’re shipping in large volumes, a monthly fee might be the better option. On the other hand, a pay as you go model might suit you if you’re shipping in low volumes.
In addition to this, once you have the charges sorted out, you will need to know what’s included in the package. This is important because some sellers charge extra for special packaging requests like bubble wrap. Also ask about any storage fee and if there’s a minimum number of units that you need to send into the prep center.
If you purchase inventory from local sellers in the US, you might need to pay sales tax but by using a prep center located in a state with no tax or low tax rates, you might be able to save on a lot of money. So, if your prep center is located in New Hampshire, Oregon, Delaware or Montana, the storage fee incurred will most likely be lower than the tax you would pay in your home state.
Consider having a look at the storage facility provided by the FBA prep center and inquiring about the storage charges. Sellers store inventory with FBA prep centers as it’s cheaper than storing inventory at a fulfilment center.
There storage facility is also important due to the suspension culture at Amazon. If, due to any reason, your account is suspended, your inventory is stuck at fulfilment center USA and you will need to pay for storage and to return the items even when there’s no business coming in. The risks are dramatically minimized by maintaining storing stock at a prep center and sending it to the prep center in smaller quantities.
It is also worth asking if the 3PL logistics company offers inspections of the stock you send to them. This shouldn’t replace your own quality checks or the manufacturer’s but should serve as the final step stock goes through before being sent to a prep center. Considering that defects in your stock can lead to a surge in customer complaints, which can directly affect your metrics and lead to suspension of your account, a 3PL logistics company that offers inspection can be worth paying extra money.
Whether you’re starting out or your company has spent years in the industry, choosing an FBA prep service can work in your favor. Talk to other sellers, ask them which FBA prep services they’re using and if they are any companies you should avoid. As a leading 3PL service provider, at Titan Fulfilment, we take complete responsibility of transportation, storage and inventory management to make your business more efficient and cost effective. Get in touch with us today to learn more about our services.