How to Use an Amazon Prep Center to Enhance Your Business

If you are a seller who just started your Amazon business and have several orders, you can pack, label, and send them to the fulfillment center yourself. However, step-by-step, your business grows, and at a certain point, you find yourself spending hours processing packages instead of looking for profitable deals.

If that’s the case, your business has grown enough to outsource prep to an FBA prep center. A prep center helps you prepare your orders according to Amazon standards. They can also process returns, act as a warehouse, and offer many other fulfillment-related services. This post will reveal what services FBA prep centers provide and how to select a prep center.

What Is FBA Prep Center?

Prep centers are third-party service companies preparing inventory for fulfillment in line with Amazon guidelines and shipping it to Amazon fulfillment centers.

Preparing products under Amazon packaging and labeling guidelines involves a lot of work. You must create an FBA shipment, label products with a Fulfillment Network Stock Keeping Unit (FNSKU) barcode, properly package them, and afterward ship them to Amazon’s fulfillment centers.

Amazon can return the shipment you’ve sent to the FBA fulfillment center or repackage your product and charge you for that if a shipment doesn’t meet their prep requirements. That will cost you extra and can delay the order fulfillment.

Related: Amazon FBA Prep Centers: All You Need To Know In 2024

What Is Amazon FNSKU?

What Tasks Prep Centers Can Do for You?

Preparation centers specialize in logistics. They prepare your products, properly package them, and ship them to the fulfillment center. They handle bubble wrapping, bagging, labeling, packaging, and shipping. They can also inspect your inventory and add marketing or other materials to the package.

Online arbitrage and wholesale sellers often send their inventory directly from the supplier to the prep center, where it is prepped in line with the fulfillment standards and afterward shipped to Amazon.

Tip: For the dropshippers, sending products to a prep center is an excellent solution allowing them to comply with Amazon's dropshipping policy. Amazon doesn’t allow any signs of the third-party seller on order. A prep center removes them from the package and repackages the order in the dropshipper’s name.

Related: New Dropshipping Strategy That Complies With Amazon’s Policy

FBA prep center services

Packaging

Prep centers add your products to customized packaging according to Amazon standards and put them in boxes, master cartons, and palettes to make them end-user-ready.

Poly bagging 

Prep centers put products into an FBA-approved polybag. That is required if you have any loose items or units that can come apart.

FNSKU labeling

Prep centers print and stick FNSKU labeling (unique Amazon barcode) on all units or poly bags and add labels to master cartons and palettes.

Bundling

Prep centers add the same or different products into one package to create a bundle (a set of two complementary products sold as one) according to Amazon guidelines.

Warning labels

Prep centers print and attach suffocation warning labels or ‘Made in China’ stickers to all units or polybags in your order.

Inspection

Prep centers unpack and inspect the shipments, ensure there are no missing items, and check their condition. The inspection process helps reduce the risk of defective items, customer returns, and refunds.

Warehousing

The prep center can store your inventory and act as a warehouse. Many sellers use that service because it can be cheaper than storing all inventory at an Amazon fulfillment center.

Adding marketing materials

Prep centers insert instruction manuals, ’Thank you’ cards, or other marketing materials into the packages at your request.

Why Use an Amazon Prep Center?

Amazon prep centers help you properly package and prepare your shipments for Amazon's fulfillment centers, offer storage capacity, and manage returns. There are a few reasons why you might consider using one.

Save time and effort

Prepping products for Amazon can be a time-consuming task, especially if you're dealing with a large inventory. A prep center can handle everything from inspection and labeling to packaging and shipping, freeing you up to focus on other aspects of your business.

Ensure compliance

Amazon has strict requirements for how products need to be prepared and packaged. Prep centers are familiar with these guidelines and can ensure that your products meet them, helping to avoid delays or penalties from Amazon.

Storage potential

Some prep centers offer storage for your inventory, which can be helpful if you don't have the space to store it yourself.

Tax advantages

Some prep centers are located in states with no sales tax (Montana, Delaware, Oregon, and New Hampshire), which can save you money.

Returns processing

Prep centers can take care of receiving returned products, inspecting them, determining whether they can be resalable, and then either returning them to your inventory or disposing of them according to Amazon's guidelines. This frees you up to focus on selling.

How Can Amazon Prep Center Help You Make Money?

Amazon FBA prep centers are an investment in efficiency and accuracy. While they won't directly make you money, they can indirectly contribute to increased profits.

Increased sales velocity

By outsourcing the time-consuming prep work, you can list products on Amazon faster. This means you can potentially capture more sales and turn over your inventory quicker, leading to higher overall revenue.

Optimized costs

Prep centers can achieve economies of scale on tasks like packaging and shipping, which can be cheaper than doing it yourself, especially for larger sellers. Additionally, proper prep work by the center can minimize the risk of stranded inventory due to Amazon penalties for non-compliant items.

Reduced errors

Prep centers specialize in following Amazon's strict guidelines. This reduces the chance of errors like incorrect labeling or improper packaging, which can lead to stranded inventory, repackaging costs at Amazon, delayed shipments, and ultimately lost sales.

Scalability

As your business grows and your inventory expands, a prep center can easily handle the increased workload, while your per-unit prep costs will go down due to larger volumes. That will enhance your unit economics and profit margins, thus contributing to your business growth.

How to Choose a Prep Center?

When choosing a prep center, it is important to find several providers with a convenient location, compare their prices and service packages, and select the option that works best for your business. The questions listed below will help you make the right choice.

What questions should you ask to choose a prep center?

Where is the prep center located?

Consider proximity to your inventory or Amazon fulfillment centers. Additionally, if you sell online arbitrage products, sales tax may apply. Using a prep center in a sales tax-free state (Montana, Delaware, Oregon, or New Hampshire) can save you money. If you often source products from overseas, you can look for a prep center close to a port.

What services does the prep center offer?

Make sure the prep center provides all the services you need. That may include labeling, packaging, kitting, returns processing, etc. Also, ensure they are familiar with Amazon's FBA prep guidelines.

What is the prep center’s pricing structure? (per unit, per item, )

Prep centers offer different pricing models, including per-item fees or fixed monthly payments. As a rule, the price depends on the volume of your inventory and the size of the products. The smaller and lighter the products are, the lower is per-unit price. Check for the minimum fees and additional service charges. The US prep prices start from $0.50 to $2.00 per unit.

What is the prep center’s inventory tracking system?

Select a prep center with reliable tracking software to monitor your products at every stage of the fulfillment process.

What is the prep center’s storage capacity? 

In some prep centers, you can store your products. If storing inventory at a prep center is cheaper than in the Amazon fulfillment center, you can use the prep center’s warehouse for a specific time to save money.

Does the prep center offer special handling?

If your inventory requires specific warehousing conditions, you must check if the prep center can provide them. For instance, not all prep centers are capable of processing dangerous goods (hazmat), paper books, etc.

What is the prep center’s turnaround time?

Product processing time is crucial because you must quickly deliver orders. On average, the preparation time for Amazon FBA products must be 24 – 48 hours.

Does the prep center offer inspection services?

When considering a prep center, selecting the one offering inspection services is better. They will unpack and inspect the shipment, ensure there are no missing items, and check its condition. That helps reduce the risk of defective items, customer returns, and refunds.

Does the prep center provide consistent and prompt communication?

Inevitably, issues can arise. Maybe damaged products are discovered during prep, or there might be unexpected delays. Open and prompt communication allows you and the prep center to work together to find solutions quickly and minimize any negative impact on your sales.

Related: Best FBA Prep Services for Amazon Sellers

How to Find a Prep Center for Amazon FBA?

If you are looking for a prep center for Amazon FBA, there are two options: you can use Amazon’s FBA prep or a third-party service provider. The choice depends on the types of products, price, and prep center location.

Fulfillment Box is an international network of prep centers known for its comprehensive approach to service providing. Warehouses are located in Europe, Canada, the USA and China, close to Amazon fulfillment centers. Services in China include supplier inspection with options for preparation and subsequent transportation of goods.

The company provides a full range of services for Amazon sellers:

• FBA preparation;
• FBM order fulfillment;
• Returns processing;
• Prime order fulfillment;
• Services for the dropshipping and flipping models.

Fulfillment-Box also offers numerous other services that are beneficial to companies with multi-channel sales.

All Fulfillment-Box warehouses operate on a robust WMS system that automates processes and minimizes manual labor and the risk of errors. Every customer has access to personalized chat support with multilingual technical support.

Fulfillment-Box is a versatile and efficient solution for Amazon sellers, suitable for both small businesses with growth potential and large enterprises that require highly efficient operations.

Does Amazon offer prep services?

Amazon prep services include labeling, bubble wrapping, stickering, and bagging your products according to FBA guidelines for a per-unit fee. 

Amazon preps products in any condition (new, used, collectible, refurbished). Each unit must have a scannable barcode (ISBN, UPC, EAN, or JAN). 

To enable FBA Prep Service in your Seller Central and ask Amazon to prep the product, select FBA fulfillment method, and in the “Who preps?” field of the Prepare Products page choose “By Amazon”.

How much does Amazon charge for prep?

When you plan your shipment in the "Send to Amazon" workflow, Amazon will estimate the FBA Prep Service fee based on the services required for each product. You can find the Amazon FBA prep fees in the table below.

How to Find a Prep Center Near Me?

Apart from Amazon, many third-party companies offer Amazon FBA prep services. Here are a few ways to find a prep center close to the nearest Amazon fulfillment center.

Search online

A Google search for "Amazon FBA prep center near me" or "FBA prep services near [your zip code]" will return results for a list of Amazon FBA prep centers in your area.

Use online directories

Websites like PrepCenter or Seller Essentials allow you to search for prep centers based on location and other criteria like service offerings and pricing.

Ask for referrals from Amazon sellers

Another method to find a local Amazon FBA prep center is to ask for referrals from other Amazon sellers. They can recommend to you some options they use themselves and have positive experiences with. 

Check seller forums and communities

Online forums and communities for Amazon sellers can be a great place to find recommendations from other sellers. Look for groups on Facebook or Reddit related to Amazon FBA. The Amazon FBA Prep Center Facebook Group is one good option you can use.

How much does it cost to use a prep center?

The cost of using an Amazon prep center can vary depending on several factors, but here's a standard breakdown to give you an idea.

Per-unit fees

This is the most common pricing structure. Prep centers typically charge a set fee per unit (item) to handle prep services like labeling, packaging, and boxing.  Prices generally range from  $0.50 to $2.00 per unit.

Per-item fees

Some centers might charge based on the type of item, with prices varying depending on size, weight, or complexity.

Minimum fees

Many prep centers have a minimum order value,  which means you'll need to pay a certain amount regardless of the number of units you send.

Additional service charges

There might be extra fees for services like labeling specific products, using special packaging materials, or removing manufacturer labels.

How to Calculate Prep Center Cost?

For online arbitrage, wholesale sellers, and dropshippers who do product research, it’s essential to quickly calculate all fees, including prep and logistics costs.

Seller Assistant allows you to do calculations directly on the Amazon product page and in the Side Panel View on any website. Seller Assistant’s FBA & FBM Calculator lets you quickly estimate all essential product metrics, including prep costs for FBA sellers and logistics costs for FBM sellers. 

In the FBA & FBM Calculator, you can switch between the FBA and FBM fees. It shows all Amazon fees, including referral fees, FBA fees, and monthly storage fees. 

Related: Amazon FBA Calculator: Free Vs Paid

5 Tips to Calculate Amazon FBA Profit Accurately

In addition, the calculator lets FBM sellers to calculate 3PL (third-party logistics) costs — (Ship + Prep + Frgl). FBA sellers can factor in the cost of shipping per unit from the supplier to the Amazon fulfillment center and prep center fees.

You can configure FBA and FBM logistics costs to account for your expenses, and calculate your product price with different levels of profit and ROI.

Related: Amazon 3PL - Complete Guide for Sellers

Amazon FBA Prep Centers: All You Need To Know

Best FBA Prep Services for Amazon Sellers

Seller Assistant also allows you to calculate sales tax if applicable. To do that, enter COG, click it, and switch the “Tax” toggle in the pop-up. Seller Assistant will calculate your tax.

Seller Assistant supports VAT calculation and European VAT. You can select your VAT scheme — no VAT, standard VAT rate, reduced VAT rate, non-registered VAT for UK sellers, and VAT on fees for European sellers who sell on Amazon US or Canada. Incoming VAT for the cost of goods is supported. To calculate it, enter COG, click it, and switch the “VAT” toggle in the pop-up. Seller Assistant will calculate your VAT.

Related: Best Tax Software for Amazon Sellers

‍What is Amazon EFN fulfillment program

Amazon EFN vs Pan-EU Program

Tips to Use Amazon FBA Prep Center

Amazon FBA prep center can save time, ensure compliance, and streamline your Amazon business. The tips below can help you get the most out of using an Amazon FBA prep center.

Do your research

Not all prep centers offer equal services and price conditions.  Get quotes from several centers and compare their services, pricing, turnaround times, and experience with your industry.  Ask the questions we discussed previously to find the best fit for your business.

Communicate clearly

Provide detailed instructions for each product, including labeling requirements, packaging needs, and special handling instructions. Set clear expectations about the prep service time and quality. The more information you provide, the less likely there will be errors.

Utilize technology

Many prep centers offer online portals where you can track your inventory, submit prep requests, and download reports.  Take advantage of these tools to streamline communication and improve efficiency.

Monitor performance

Regularly assess the prep center's work to ensure they're meeting the agreed-upon standards. This includes factors like turnaround times, accuracy (labeling, packaging), and communication.

Build a relationship

Your prep center can be a valuable partner in your Amazon FBA business. Treat them with respect and communicate openly. This will foster a positive working relationship that benefits both parties.

FAQ

How much does Amazon prep center cost?

Amazon prep centers typically charge $0.50—$2 per item, but prices can vary depending on factors like volume and service.  Consider this cost alongside the time saved and the potential for fewer errors.

Does Amazon do FBA prep?

Yes, Amazon offers FBA Preparation Service for labeling, bubble wrapping, etc., but some sellers prefer third-party centers for more options and potentially lower costs.

What is an Amazon FBA center?

An Amazon FBA center is a warehouse where Amazon stores, picks, packs, and ships your products to customers when you use their Fulfillment by Amazon program.  This lets you focus on selling while Amazon handles the fulfillment process.

Does Amazon FBA cost money?

Yes, Amazon FBA incurs costs. You'll pay storage fees based on space used and fulfillment fees per item, though these can be offset by the convenience and scalability it offers.

Final Thoughts

A preparation center is an excellent solution to outsourcing prepping and shipping your inventory to Amazon fulfillment centers. That allows online arbitrage, wholesale sellers, and dropshippers to focus on product research and growing their business.

Product research is also done much more straightforwardly with seller tools. Seller Assistant is an all-in-one extension incorporating features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines a Side Panel View, FBM&FBA Profit Calculator,Quick View,ASIN Grabber, Restrictions Checker, in one tool.