As you’re getting ready to dive into FBA prep, one of the main concerns on your mind is likely going to be: how much does FBA prep cost? Which option is the cheapest and most profitable?
In this article, we’re going to cover the cost and fees associated with each primary option: in-house prep, Amazon’s prep, and outsourcing to a prep service. While Amazon’s prep service is extremely costly and offers almost zero advantage… you’ll likely want to consider between in-house and outsourced.
Use this outline to skip to any section of this webpage:
- How much does FBA prep cost?
- What’s the cheapest & most profitable FBA prep method?
- How to choose an FBA prep service
How much does FBA prep cost?
In reality, you will need to run the numbers and find the best option for you – since each business has its own intricacies and complexities. Costs from different Amazon sellers have a wide range, due to unique products, inventory sizes and prep needs. However, make sure to get a full understanding of costs before you dive into either of the three options below:
Amazon’s fees
Amazon offers their own FBA prep services, which can be found in the link below (including their fee structure). However… almost every FBA seller completely avoids going this route, since the costs are extremely high and eat into your margins far more than running in-house or outsourcing to a dedicated 3rd-party service.
It’s convenient to hand the job off to Amazon and let them take care of it, but unfortunately Amazon does not have the capabilities to efficiently prep inventory at relatively low costs (since they’re focused on their regular warehousing and logistics that enable Prime).
You can find Amazon’s FBA prep services and fee structure here
For most businesses, these fees will cost far more than the two options below. Amazon’s own prep service should only be used in cases of emergency – where you might be in a temporary transition stage.
In-House fees
There are several aspects and moving parts when it comes to running your own FBA prep within your company. This means you’ll now need a warehouse (or significant storage space) and loading gear for receiving and shipping inventory from carriers. You’ll also need to repeatedly purchase materials for prepping inventory – which includes boxes, packing tape, labels and more.
Keep in mind… as you receive, prep and ship larger-sized orders, you’ll need a larger employee staff to pack and ship inventory. This comes with needing a highly-efficient system and set of procedures to keep a smoothly-run operation, which may require a consultant to come in and assist with setup.
You’ll want to implement a software tracking system to stay up-to-date on your prep operation – especially once you begin to grow and scale. Staying organized between your receivings, inspections, prep jobs and pending shipments will be crucial for running your own in-house prep operation with ease.
In total, this can lead to thousands in expenses every month – with varying costs depending on the size of your business. However, most Amazon sellers find the largest cost to be opportunity cost. When you’re stuck working in the mundane tasks of FBA prep, it’s much more difficult to grow and scale your business with product sourcing and marketing – which is why most sellers prefer outsourcing FBA prep.
Outsourced fees
3rd-party FBA prep services have wide-ranging cost structures, so you need to individually check each service and run the numbers yourself. Cost will also vary depending on the types of products you sell – along with the size, weight, and complex nature of your prep needs.
All in all, most services charge based on monthly storage fees, cost-per-item, cost-per-label and additional fees for special projects that need dedicated attention. Always choose a prep service that offers a dedicated account manager for your business – since almost every Amazon seller needs personalized attention for their products.
You also want to consider a prep service with 1) a climate-controlled warehouse, and 2) a warehouse located near the coast. Prep services on the east coast can offer lower shipping fees, due to an optimized location near the ports and majority population in the US.
What’s the cheapest & most profitable method to grow my business?
The total costs of running an Amazon FBA business can add up, and one of the largest expenses is often the cost of preparing and shipping products. While it is possible to do this work yourself… most of the time it’s more cost-effective to outsource it to a third-party service like ZonPrep.
There are a number of reasons for this. First, professional prep services have the experience and expertise to get the job done quickly and efficiently – with fast turnaround times that keep you on schedule. They also have access to high-quality packing materials that can help to reduce shipping costs – along with well-trained employees . In addition, many prep services offer bulk discounts that can further reduce costs. As a result, outsourcing your FBA prep can save you time and money.
How to choose an FBA prep service
Deciding to use an FBA prep service is a big decision. After all, you’re trusting a company to handle your inventory, and you want to be sure that your products will be well-cared for.
There are a lot of factors to consider when choosing an FBA prep service, but two of the most important are turnaround time and customer service.
You’ll want to find a company that can prepare your orders quickly and efficiently, and one that will be there to answer any questions you have along the way – especially when it comes to prepping your inventory the exact way you need it done (there’s no cookie-cutter method to every product and inventory set – which means each business needs dedicated attention).
