The digital world has given rise to many famous startups that have become a vital part of our daily schedule, like online food delivery apps, fintech startups, online classroom & meetings platforms, etc. Over the years, the most crucial result of this digital development has been online shopping apps like Amazon and other such platforms.
On the one hand, it is an effortless task for customers to add an item to the cart and proceed with the payment. The product reaches the customer’s doorsteps, and the process completes thereon. But, it is not a smooth-sailing process for the companies to sell on Amazon.
Amazon provides convenience to the businesses to sell their products through their platform & earn profit. They receive the goods from companies, process them, check the quality, and deliver them to the final customers.
In the whole process, the organizations do not have to worry. But before proceeding to the Amazon FBA, businesses need to prepare their inventory in the proper condition for fulfillment. If the stock is not ready on time, companies might incur additional losses in the form of returns, rejection, or poor quality. Therefore, companies should consider various third parties or an appropriate Amazon FBA prep service to ensure proper on-time delivery of goods to Amazon.
Table of Contents
Top 7 Things To Consider For Choosing Amazon FBA Prep Service
Price
Price is one of the key components of any business decision. Companies have to choose among different prep service providers on the basis of whether they charge a fixed, a monthly variable amount, or per item-based price.
Businesses should choose the charging system based on their needs and inventory size. A monthly pricing system is the most suitable method if they usually keep a large stock. On the other hand, per item charge will prove beneficial for those dealing in small inventory levels.
Apart from the primary charging, some prep services additionally charge companies for storage & packaging services. An experienced business will critically analyze these extra cost factors to save cost. Moreover, if you are selecting a low-rated prep service, make sure the quality of the goods is not compromised. The long-run profitability must be prioritized instead of short-term cost analysis.
Warehousing Feature
Another significant utility of prep service is the storage of goods. Most of the businesses use FBA prep service centers as storage houses. It is a pocket-friendly option that keeps your stock stored in the Amazon fulfillment center.
When a company stores goods in these prep service centers, they can send goods to the FBA (Fulfillment By Amazon) when the demand or sales opportunity arises. If you send all the goods in one go to FBA, there are high chances of loss of freshness or prone to poor quality.
Apart from this, FBA rejects the goods if they are defective or have any type of quality issues. If you do not store goods at your prep service center and directly send the whole lot to the Amazon FBA, it will take a lot of time in the case of rejection & return.
As part of their terms & conditions, Amazon sends the defective goods to the supplier in around 14-15 days. After receiving the return of the goods, the suppliers will have to check for the quality defect and repack them. The whole repacking & relabelling process will incur a high cost.
Quality Check
Quality of goods is the most vital concern area for every business. Businesses outsource quality inspection activities to excel in customer service & customer retention. Nowadays, organizations look out for prep service centers that offer quality inspection.
It is crucial to use credible and reliable prep services. Sometimes the service providers claim to offer 100% quality checks but underdeliver the promise. This adds to the company’s costs by having more chances of return from Amazon FBA.
Processing Time
In every country, there are plenty of prep service center options. But, the difference lies in their work agility. The main work of these prep services is to make inventory available for FBA. Therefore, the processing time of these centers must be as quick as possible.
Processing time becomes a more critical factor for companies selling high-demand products. If the sales velocity is high, the processing time of the prep service centers should be impressive. Companies should opt for prep services that offer a guarantee period.
Tax Consideration
Most countries have a rigid taxation system of trading goods to different countries. The most common tax they collect is the sales tax. It is a bad choice if you are approaching a prep service center in a country with high sales tax.
Organizations should use a service center in counties with a low sales tax system or no system at all. There are four countries (Delaware, New Hampshire, Montana, and Oregon) that do not charge sales tax.
Companies should note down the sales tax collected by different countries and compare with each other. Select the country with a comparatively lower rate that can prove economical. Even if service providers charge a high amount and are particular about a country for prep service, you can hire more cost-effective fulfillment service providers like Shipo.
Right Location
Selecting a feasible location for your FBA prep service is a research-oriented activity. If selected the best location, it will yield considerable profits; otherwise, it will impact the cost constraint. Long distances between the prep service center and shipping port can lead to high costs. If the shipment size is small, it may turn into a loss-making decision to choose an FBA service.
It is crucial to select the prep service center near the shipping area. It will save a lot of effort. Even if the cost of choosing a nearby service center is high, a business should choose it due to long-term gains. It also gives more flexibility in making minor changes in the shipment at the lost moment.
Temperature & Climate
The country’s climate in which the prep service center is located also affects the decision for the prep service. It is essential to ask the prep service providers about the temperature of the centers.
If there is a regular fluctuation in temperature, it may lead to complete damage of goods, especially perishable items. Apart from damaging, it either degrades the quality or shortens the lifespan of the goods. Therefore, businesses should consider the climate-controlling facilities of the FBA prep service centers to ensure safe delivery to final customers.