Getting your products ready for Amazon FBA is a massively-important step in the selling process. Without your inventory packaged & labeled correctly, Amazon will tack on margin-killing fees (and sometimes reject your products entirely). An efficient FBA prep process is a must-have for any serious Amazon seller.
Now, there are two ways to do this: prep your products in-house, or send them to a third-party prep service. Each option has its own pros and cons, so which one is right for you? In this article, we’ll break down the advantages and disadvantages of each option – so you can make the optimal choice for your business.
Use this outline to skip to any section of this guide:
- FBA Prep In-House: Pros
- FBA Prep In-House: Cons
- FBA Prep Service Outsourced: Pros
- FBA Prep Service Outsourced: Cons
- Which is Better: FBA Prep In-House or Outsourced Service?
FBA Prep In-House: Pros
More control of the process
When it comes to FBA prep, most sellers choose to outsource the process to an FBA prep service. This can be a convenient option, but it also means giving up some control over the quality of the prep work and the timeline for completion. Keeping FBA prep in-house will fit sellers who are looking to invest the time and money to have more control over the process.
When you prep in-house, you can choose your own team of packers and inspectors, and you have the final say on when your products are ready to ship out. This means you can have control over when your products will be shipped out. The downside is it requires a significant investment of effort and money – which we’ll explain more below.
Inventory on hand
A small number of FBA sellers prefer to keep their inventory on hand, giving them a greater sense of flexibility and control. The decision of whether to use a prep service or do FBA prep in-house depends on your specific needs and preferences – and while most Amazon sellers prefer to outsource, staying in-house will let you have 100% of your inventory on hand.
FBA Prep In-House: Cons
When you first start selling on Amazon, it can be tempting to try to do everything yourself in order to save money. However, as your business grows, you will quickly realize that this is not a sustainable model. Running FBA prep in-house requires a great deal of time and energy – and it prevents you from focusing on other aspects of your business. It can also be very costly, since you will need to invest in everything it takes to run an FBA prep process – including storage space, labor, materials, and shipping (which often costs a bit higher than FBA prep services, since they tend to acquire shipping discounts due to volume of shipments to & from their warehouses).
In addition, there is always the risk that something will go wrong during the process, which could damage your products or cause them to be delayed. Third-party FBA prep companies are often far more prepared to prevent these types of issues that Amazon sellers often make when they try running their prep in-house.
One of the biggest drawbacks to keeping FBA prep in-house? It can prevent you from growing and scaling your Amazon business. This is because you will be stuck doing the busywork of FBA prep, which can be easily outsourced for relatively cheap costs. As a result, you won’t have the time or energy to focus on the high-leverage aspects of your business that could potentially lead to faster growth.
Running FBA prep in-house can also be quite costly – as you will need to invest in the necessary equipment, supplies and labor. Keep in mind… is it possible you might change your mind and switch to an FBA prep service at some point? If yes, investing thousands of dollars upfront will turn out to be a waste of money. Overall, while there are some advantages to running FBA prep in-house, there are major disadvantages that should be taken into account.
Causes seller burnout
Keeping FBA prep in-house can result in burnout from the labor-intensive work required to manage the process effectively. In addition, you may find yourself constantly dealing with management hassles as you try to keep everything organized and on-track. As Amazon sellers, we’re keen to automating and systematizing as much as possible – and keeping FBA prep in-house will detract from that goal. It’s crucial to weigh the pros and cons carefully before making a decision about whether or not to run FBA prep in-house. Otherwise, you may find yourself regretting your decision later down the road.
FBA Prep Service Outsourced: Pros
Convenient and saves time
FBA prep services provide a convenient and time-saving solution – which is why the vast majority of Amazon businesses prefer to partner with a prep service. By outsourcing the storage, inspection, prepping and shipping of their products, sellers can focus on other aspects of their business, such as sourcing and marketing.
Prep services have extensive experience in packaging and shipping products – so they can ensure inventory arrives at fulfillment centers in good condition with proper labeling. This is especially important for products that are fragile, come in bundles and multi-sets, or require special handling. Ultimately, using an FBA prep service can save Amazon sellers time and give them peace-of-mind that their products will be handled professionally.
Lower stress and hassle
Finding the right FBA prep service can be a game-changer for your business. With a reputable FBA prep company backed by a proven track record of success, outsourcing your prep needs can shore-up a lot of time and stress. The right service will have a team of experts who are dedicated to preparing your products to avoid Amazon penalty fees – and they have streamlined processes in place to ensure that your products are correctly prepped and ready to ship with fast turnaround times. Using a prep service can remove a lot of headaches and hassle from your plate, and ultimately improve your bottom line.
Cost-effective for growth
While there are up-front costs of using an FBA prep service, it’s important to know that an FBA prep service is NOT an expense – it’s an investment that provides you a positive return. The cost is ultimately absorbed by the increased efficiency of your supply chain – and in the long run, it’s actually a very simple, easy & cost-effective way to grow your business. In the end, reducing your Amazon penalty fees and optimizing your supply chain makes up for the investment into FBA prep services.
FBA Prep Service Outsourced: Cons
Less control over the process
Some FBA sellers prefer to have their inventory on-hand at all times. While this is typically more costly and inefficient, it may provide a sense of security in your business. Also, if you’re a small Amazon seller with low revenue and inventory orders, you might not be ready to use an FBA prep service yet. You should keep your eye on revenue growth and size of inventory – because when the time comes, you may want to switch over to outsourcing your FBA prep.
Some FBA prep services can be unreliable
Unfortunately, not every FBA prep service can offer 100% reliable, dedicated service year-round. This is true for every business in every industry of course… but it’s always safe to proceed with extra caution before you allow a service to store, prep and ship your inventory – since you’re dealing with thousands in product costs that will have a large impact on your Amazon business.
Which is better: FBA prep in-house or an outsourced service?
In the end, the vast majority of Amazon sellers have a strong preference for outsourcing to an FBA prep service – since they reduce costs, provide faster turnaround times, and offer the convenience of allowing you to focus on growing & scaling your business. FBA prep services can handle a wide range of products, from small tech to large furniture. As a result, outsourcing is often the best option for Amazon retailers who want to save time and money on fulfillment & prep – instead of dealing with the headaches of managing the process in-house.