Sales Taxes
If you purchase goods on the internet in the US (i.e. online arbitrage) you may have to pay sales tax. It is possible to save money by choosing a prep centre in a state with no sales tax or low rates. How? Send your stock straight to the pre-center. If your inventory is in one of the states without sales tax (Delaware Montana New Hampshire Oregon) Storage fees will likely be less than what you would be paying in your country. Remember that the US has a sales tax of between zero to seven percent. Even a two- or three percent decrease in sales tax could make a a big difference in the total cost of your purchase.
Climate
If you sell perishable goods like food the first thing you should inquire of any prep service is whether their storage and receiving facilities are climate-controlled. The goods you sell should not be damaged simply because they weren't stored in the correct conditions. This doesn't only apply to perishable items. Controlling the temperature is crucial for those who are shipping goods to a hot climate or one that is prone to extreme weather. If conditions aren't controlled correctly your items could spoil or get damaged by damp.
Storage Facility
FBA prep services are responsible to prepare your inventory to go into FBA. However, prep centres are getting more sought-after for sellers who want to keep their inventory. The sellers use this method for two main reasons. One reason is that it is less costly than storing all your inventory in the Fulfillment Center. Sellers maintain their inventory at their prep service and then transfer the FBA inventory based on the sales rate. For instance that if a seller owns 10,000 units in their prep facility and sells about 1,000 units per month, they will only send 1,000 units to FBA each year. The remainder of stock remains at the center. Amazon's suspension is the second reason. Your stock can be suspended and then it will be in the Fulfillment Center. It costs you per item to return it, and can take several weeks for it to be delivered. In your Plan of Action, you (or your prep center) must inspect the inventory you had in FBA. Once you are reinstated, you will need to have your stock repackaged. It is an expensive process, which sellers try to minimize by keeping their inventory in a Prep Center and submitting smaller quantities. If you decide to go this route be sure that your prep service can quickly turn inventory around. Ask for their insurance. This is important as you'll want your items to be protected from theft or fire.
Processing Time
When selecting an FBA prep service, the speed they can prep your inventory is key. The need for speed will depend on several variables. You might need them to return units in 48 hours if you are holding stock at the prep facility and sending it based on sales speed (see below). Many prep companies are transparent regarding their processing times. Some offer a 24-48 hour guarantee. If you can't see this information, be sure to ask, as you don't want your delivery rate to suffer due to your prep service are waiting for their sweet time to get your inventory into FBA. Check out the best Door to Door Delivery site for more.
Inspection
Alongside labeling and packaging it's important to inquire if the FBA prep service carries out inspections. It's not an alternative to inspections carried out by the factory of the manufacturer. However, it may help the inspections. Manufacturers are not required by law to examine shipments because they can be liable for more losses if inventory is returned. Imagine your manufacturer doing a pre-shipment inspection. They inspect 10,000 units, and 20% of the items. There's a good possibility that the FBA preparation services will find problems in your stock which your manufacturer didn't. Danny McMillan believes that manufacturers typically don't examine their products too closely because they know that if they reject a product, it's going to cost them more money and eat away at their margin. The inspections conducted by the company that prepares your food more important.
In Summary
Outsourcing your FBA prep could help make your business run efficiently, but picking the wrong service can slow you down even more.The primary thing to remember is that you should not be scared to ask questions, no matter how minor they may seem. It is important to establish an rapport with your prep service. If they appear disinterested when you ask them questions this may be an indication that they are not the best choice. You can also talk to other sellers. You can learn which the services they use for their preparation and, even more important whether there are any issues to avoid. You want to ensure that your possessions are secure when you send it to a different person.