Sales Taxes
You can purchase your products online from US merchants (i.e. If you purchase goods on the internet (i.e. or through online arbitrage), you might be required to pay sales tax. You can save money by choosing the services of a prep center in a state with no sales tax, or with low rates. How? By shipping your stock straight to the pre-center. You can ship your stock directly to the prep center if it is located in one or more of the four states with zero sales tax (Delaware Montana New Hampshire Oregon). The costs for storage they incur while they wait for the arrival of more stock will be lower than the tax you pay in the home state. Remember, sales tax in the US ranges from zero to just over seven percent. It is possible to save money by selecting an office in a state that has lower sales tax than the other states.
Climate
You should ask your prep service if the climate control is available for perishable items like food. It is not a good idea for your goods to become damaged just because they were not kept in good working order. This isn't limited to perishable products. The control of climate is equally important when you're shipping stock to extremely hot states or states with highly variable weather. If the climate isn't properly controlled, your items may spoil or get damp.
Storage Facility
While FBA prep centers are FBA prep service's primary function is to prepare your inventory for FBA, sellers are increasingly using prep centers to keep their inventory. The sellers use this method for two primary reasons. It can be more affordable than storing your entire inventory at Fulfillment Centers. Sellers store their inventory at their prep service, and then send FBA stock according to sales velocity. For example If a seller has 10,000 units of inventory in their prep center and is selling around 1,000 units per month the seller will only be sending 1,000 units to FBA each year. The rest of the inventory will be stored at the center for prep. Amazon's suspension is the other reason. If you're suspended, your stock essentially becomes stuck in the Fulfillment Center. It costs the customer per item returned, and may take several weeks to reach you. Your Plan of Action will require the prep center to examine all inventory within FBA. After you have been reinstated, the stock must be repackaged and labeled before you are able to return it. This is a costly procedure, and sellers attempt to reduce by keeping their inventory in a Prep Center and submitting smaller quantities. If you choose this route make sure your prep company can quickly turn inventory around. Inquire about their insurance. Your inventory must be protected from fire and theft.
Processing Time
The speed with that they will prepare your inventory is an important aspect to consider when selecting the FBA preparation service. Numerous factors could influence your need to be fast. If you've got stock in the prep center and you are bringing it in based upon sales velocity (see above) it is likely that you want them to deliver units in 48 hours. Most prep services will be open about processing times. They may also offer an assurance of between 24 and 48 hours. Always ask for this information if not sure. This is due to the fact that you don't want to have your late delivery rates affected by a prep company which takes too long to get your inventory to FBA. See the best Door to Door Delivery blog for info.
Inspection
Also, you should inquire whether the FBA prep service can conduct inspections. It is crucial to remember that this does not replace product inspections at your manufacturer's factory, but can be used in conjunction with the inspections. Manufacturers don't inspect shipments that carefully, as if the product is rejected it costs them more. Imagine your company performs an inspection prior to shipping. Imagine that you have 10,000 units and they inspect 20% of the products. The FBA preparation service is likely to discover other issues that your manufacturer didn't notice when they go through the inventory. Danny McMillan believes that many manufacturers don't inspect their shipments in the way they should since it can increase the cost of shipping and reduce their margins. This makes inspections by your prep company even more vital.
In Summary
You could outsource FBA preparation to make your business more productive, but it could also slow your business. In order to build relationships, you will need to become familiar with your prep service. If they are unable to answer questions, it's an indication that they might not be the right option. Chatting with sellers from other companies is an excellent idea. Speaking to other sellers could help you find out which prep companies they use and, perhaps most important the ones you should avoid. Because you don't want your supplies to go to waste, it is important to be sure that it's safe.