Sales Taxes
If you buy your goods from online stores in the US (i.e. There may be sales tax due online arbitrage. But by using a prep center in a state with either no sales tax or a lower rate, you may save money. How? You can ship your stock directly to the center for preparation. If your inventory is in one of the states that don't have sales tax (Delaware Montana New Hampshire Oregon) Storage fees will likely be less than the amount you'd have to pay in your country of origin. Rememberthat the sales tax in the US can range from zero to just over seven percent. A two or three percent decrease in sales tax could make a huge difference in the overall cost.
Climate
If you're selling perishable products such as food items, it is best to inquire with the prep service whether their storage and receiving facilities are controlled in terms of temperature. You don't want your products to be damaged simply because they were not kept in good conditions. This isn't just a matter of perishable goods. The control of climate is equally important when you're shipping your stock to states that are extremely hot or states that have highly unpredictable weather. If the weather isn't appropriately managed, items may become damaged or lose value.
Storage Facility
While the FBA prep service's main function is to prepare your inventory for FBA, sellers are increasingly using prep centers to store their inventory. Two main reasons sellers use prep centers are to understand why. The first reason is that it's less expensive than stocking your entire inventory at Fulfillment Centers. Based on their sales speed sellers keep their inventory in their prep center, and then move the stock to FBA. That implies that a seller who sends 10,000 units of inventory to their prep center each month and sells around 1,000 units per month will only be able to send 1,000 units to FBA every month. The remainder of the inventory will be stored in the prep center. The other reason for this is Amazon's suspension culture. If you are suspended, your inventory is basically stuck within the Fulfillment Center. You're going to have to pay per item in order to have it returned and it may not arrive for a few weeks. You or your prep centre will be required to examine the inventory you have placed in FBA as part of your Plan of Action. It is then your responsibility to get your inventory returned to FBA, repackaged, labeled and sent back to FBA once you get reinstated. Selling agents try to make this a less costly process by sending smaller amounts of stock to the Prep Center. If you're considering this route, ensure that your prep company can turn around inventory quickly and on short notice. Ask about their insurance. Stocks should be protected from theft and fire.
Processing Time
It is important to consider how fast they can prepare your inventory. There are several factors that will affect your speed needs. If you've got stock in the prep center and are sending it in on the basis of sales volume (see above), you will likely need them to send units within 48 hours. The majority of prep centers will be upfront about their processing times, and some even offer a 24 or 48 hour guarantee. If you don't see this information, please ask. You don't want your late shipping rates to be affected by the prep service you use is taking too long to process your stock into FBA. Have a look at the recommended Door to Door Delivery blog for details.
Inspection
It's worth asking if your FBA prep firm conducts inspections as well as labeling and packing. Important to remember that FBA prep services can't substitute factory inspections of products. But, they may assist them. Manufacturers do not check their products with a lot of care because it could lead to stock rejections that can cost them more. Imagine your company conducts a pre-shipment inspection. Your company inspects 10,000 units. They also examine 20% of the goods. Your FBA preparation company will likely find additional issues in your inventory. Danny McMillan believes that most manufacturers don't look at their products very carefully because they are aware that rejects can result in higher costs and lower margins. Inspections by your prep company even more crucial.
In Summary
While outsourcing FBA preparation may increase the efficiency of your business but you should not be shy to ask concerns, no matter how small. Your prep service will need to build an association with you. If they don't respond when you have questions, it is a sign they might not be the best fit for you. It's a good idea to talk with the other vendors. You'll be able to identify the prep services they employ and, more crucially is, which ones to avoid. It's important to protect your valuable inventory when you transfer it to someone else.