Are you an Amazon seller feeling stretched thin and considering the option of hiring an Amazon prep center to ease your workload? Maybe you're wondering about the total cost or any hidden fees that come with using a Prep Center for FBA. In this article, we will go over the costs you can expect to pay when working with a prep center and more importantly how to determine the costs to pay attention too.
The Fees: What to Expect
While not every prep center charges these fees you want to keep them in mind when asking for quotes. You want to make sure there are no surprises after signing up. So let's get started.
1. Initial Setup Costs
Prepare to launch your FBA business by understanding the initial setup costs of dealing with an Amazon prep center. These costs may vary from $50- $1k depending on the services you opt for, and the Amazon prep center you choose, but being aware of them ensures you start on the right foot. These costs cover integration, initial admin for account setup and more. While not every company charges them they are normal for larger more complex companies.
2. Storage Fees
You've got products that cannot be sent in right away and you need to store them? That’s where storage fees become important. Learn how these fees are calculated with the prep center you choose so that you can optimize your inventory management. While Amazon Warehousing and Distribution (AWD) has become popular choice the fees can be much higher than a prep center. Amazon FBA prep centers manage their storage pricing differently, some include free storage with their services, while some charge per cubic foot or by the pallet. The average range is around $0.50- $2.00 per cubic foot per month.
3. Prep Charges
This is the main fee you should expect to pay and what most prep centers will list front and center on their website. This is also the most important because if done incorrectly you will be charged by Amazon to prep the products again once they reach the fulfillment center. The majority of Amazon prep centers will quote the prep fee based on your volume per month. Usually, the more units sent in, the better rate you will get from your Amazon prep center. Prep charges can average anywhere between $0.50-$5.00 per item, depending on what the item is, prep required, and the volume. The second way prep centers charge is through an itemized system. This usually leads to a lower fee for simple to-prep items (such as items that only need an FNSKU sticker) but becomes expensive when they require more than just labeling. Things like bubble bagging, kitting, or oversized items can rack up fees fast if they are charged by the materials. This makes it more difficult to estimate what your fee per ASIN may be for more complex items. Pro Tip: Run through scenarios with your prep center and ask about specific ASINs. This will give you the real cost per item to compare against other prep centers you are considering. You will find out it can be difficult to compare apples to apples when shopping prep centers so this helps create a benchmark.
4. Labelling and Packaging Costs
You can impress your customers with professionally labeled and packaged products. Understanding how these costs are broken down is crucial to ensure you remain profitable while using an Amazon prep center and impressing the consumer. Oftentimes, prep centers in the USA will have different pricing for single items, VS multipack items. In addition, glass items will cost significantly more to prep because of extra materials needed such as bubble wrap, and bubble bags. The pack size of the item and the material are both things to keep in mind when it comes to labeling and packaging costs.
5. Return Processing Fees
Returns are an inevitable part of the e-commerce world. Some FBA prep centers do not process returns at all, whereas some solely focus on managing returns. Some sellers process their returns themselves and do not use a prep center for that service at all. One reason sellers choose that route is that processing returns at Amazon FBA prep centers is usually more costly than traditional prep/pick-and-pack prices. Keep in mind that return rates vary depending on the category of the product. Return rates typically average between 5%-15%, so it is worth looking into the return rate for your products to make the most educated decision for yourself. Prep centers that offer this service typically have several ways to recoup money from products that are no longer in "New " condition. This can include liquidators, Flea Market or alternative sales channels.
6. Shipping Costs
While most standard items ship using partnered carrier, some prep centers offer shipping services using their own trucks which can lead to significant savings. Shipping costs vary depending on the size of the shipment if it is hazmat, where it is going, etc. Speaking with your center about your company's needs is the best route to determine which process for shipping would be best for you.
7. Additional Service Charges
From account management to bubble wrapping, and kitting services, Amazon prep centers offer many additional services. Uncover the fees associated with these optional services and decide which ones align with your business goals.
The Amazon Prep Center Cost Breakdown: Understanding the Numbers
As professionals navigating the intricate world of Amazon FBA prep centers, it's imperative to comprehend the financial aspects involved. Here’s a breakdown of the average Amazon Prep Center costs you can expect:
Initial Setup Fees: $50 - $1,000
Monthly Storage Charges: $0.50 - $2.00 per cubic foot
Pick and Pack Costs: $0.50 - $5.00
Labeling and Packaging Fees: $0.55 - $5.00 per product
Return Processing Charges: $2.00 - $5.00 per return
Additional Services: Varies based on service.
Your Roadmap to Success
Armed with this comprehensive guide, you’re now equipped to navigate the intricacies of Amazon Prep Center costs with confidence and finesse. Remember, success in the world of Amazon FBA is not just about what you sell but also about how you manage the costs involved. Stay vigilant, stay informed, and stay ahead of the curve.
TLDR;
Understanding the costs associated with Amazon Prep Centers is crucial for maximizing the efficiency and profitability of your FBA business. Each cost component plays a role in your overall budget, from initial setup and storage fees to pick-and-pack charges, labeling, and additional services. By familiarizing yourself with these expenses—ranging from $50 to $1,000 for setup, $0.50 to $2.00 per cubic foot for storage, and varying rates for packing and labeling—you can make informed decisions that align with your business goals. Don’t forget to consider return processing and shipping options as well. With this knowledge, you're well-prepared to streamline your operations and elevate your FBA success. Stay sharp, keep learning, and let your business thrive! Stay tuned for more insights and a list of US Prep Centers coming your way!