7 Considerations When Selecting a Prep Center for Your FBA Business

As your FBA business grows, you’ll learn that it ultimately becomes necessary to outsource certain aspects of your business to third parties. Choosing which elements of your business to outsource depends on your own skill set and resources, and you’ll learn that one man cannot do it all!

From an economic perspective, and perhaps a mental sanity perspective as well, outsourcing simply makes sense. You’ll learn the steps of the FBA process that you love, and you’ll quickly learn the steps that you loath. If you love the marketing aspects of growing your business, and if you are good at it, then that would be one of the last steps of the process that you want to outsource, if at all. And, if the idea of attaching one more label to a box and getting cut by that stupid so-called “automatic” tape dispenser makes you want to pull your hair out, then outsourcing the prep aspect of your Amazon business might just be one of the first things you’ll want to outsource!

But, how do you select with whom to work? Here are seven important considerations when choosing a prep center:

  1. Location location location! You might want to choose a location that is close to your home. Or, you might want to choose a location close to a sea cargo port of entry in the United States. Another consideration is selecting a prep center that is located near a large air shipping hub, which receives cargo shipments by air daily. This ensures that your products arrive at the prep center in a timely manner. Time is money, and the quicker you can get your products from China, received in the US, prepped, labeled, packaged and forwarded to Amazon, the quicker you will start making money.
  2. It’s gettin’ hot in herrr! You’ll want to make sure the receiving and preparation facilities are climate-controlled, especially if it is located in an area that experiences seasonal weather changes. Fluctuations in temperature can damage many types of goods, not just food products. If the warehouse is not climate-controlled, be sure the geographic location that you send your goods to are not subject to temperature extremes in any direction. If a prep center’s website does not specifically state that it is climate-controlled, be sure to ask, and get it in writing!
  3. Death and taxes…. As you know, the only things in life that are certain, are death and taxes. Then you are shopping for a prep center, price will almost always come into your decision-making, as it should. Although you shouldn’t select a prep center based on price alone, do make sure you factor in local tax when you are comparing prep centers. Furthermore, you’ll want to make sure you know the price per product when factoring in costs, and figure this out as soon as possible in the logistics process. Pricing transparency is key in helping you make this decision.
  4. Interview the prep center! You will have questions, and the prep center must be willing to work hard to put you at ease. They should be responsive to your questions and concerns, and be easily accessible should you have questions about their processes, or your specific order. Let’s face it. We live in a technologically-dependent world, and your prep center needs to be “with it” in terms of communications and technology. Can you easily send the prep center a note via email, their website, or Skype? How responsive are they? Take note of the answers to these questions when you initially reach out to a prep center. If they aren’t responsive and working hard to get your business now, imagine how difficult it will be after you’ve become a customer.
  5. Bigger isn’t always better! But sometimes it is, and that is for you to decide. Do you want to work with a facility that processes thousands of units daily? Do you require a facility that has a loading dock and can receive trucks and/or pallets on your behalf? If you are a larger seller who ships a lot of pallets to your prep center, you are going to want to make sure they have a loading dock and the ability to receive and store pallets. Also, make sure you determine the facilities’ minimum requirements and maximum unit processing capabilities based on your specific needs. Some facilities have minimum unit requirements, while others do not. You need to find the prep center that can best accommodate your quantity needs, whether it be small or large.
  6. Stop the presses! In some situations, as a seller, you might want a prep center to hold your products for you for a certain amount of time. Perhaps you want to accumulate a larger order over time, but cannot afford to purchase at once. Ask the prep center how long they will hold your products, if at all. Do they have storage capabilities? If so, what are the additional costs?
  7. How quickly can the facility process my order? Some prep facilities guarantee a 24- to 48-hour turnaround time, whereas other centers might take a week or more to process your inventory. You need to have a clear understanding of a company’s processing time frame ahead of time. If the company isn’t initially transparent about the turnaround time, then make sure you ask! Keep in mind that order sizes can greatly impact turnaround time.

Many people have to outsource the prep aspects of their Amazon business. They are digital nomads, roaming the planet, connected only via their computer, and can run their business from their computers from anywhere. But they cannot receive, process or ship packages from the hostel they’re staying at in Thailand. Others live in small units, or in congested cities, and accepting and processing larger orders, as their businesses grow, simply isn’t feasible. And then others have learned, sometimes the hard way, that they simply cannot actually “run” their Amazon business from their home because of binding lease agreements, restrictive Homeowners Association Agreements, local zoning laws and ordinances, or disgruntled neighbors. And believe it or not, no matter how much your husband loves you, he doesn’t want to give up his man-cave permanently, and he wants that space back ASAP!

If you’re one of these people, it sounds like outsourcing the prep process just might be for you!

About the Author

Suzi Hixon, a former intellectual property attorney, is the owner of Jungle Prep, a receiving, prepping and forwarding facility located in south central Kentucky, strategically just 2 hours from UPS Worldport, the world’s largest UPS hub.

Suzi is also an experienced FBA seller. With over thirteen years of experience practicing trademark law, combined with over seven years of running her own businesses in San Francisco and Kentucky, Suzi combines her experiences with her superpower of simplifying complex matters and putting them into easily-digestible forms to help Jungle Prep’s customers build their own businesses and achieve their own successes.

When Suzi isn’t drowning in bubble wrap at Jungle Prep, you can find her tending to her small chicken flock on the family farm or spending auntie time with her (usually) darling niece and nephew. Suzi is a chocolate addict, self-proclaimed dog whisperer and serious book worm. Writing, teaching, hiking and enjoying home-grown greenhouse tomatoes with her beloved all make her pretty happy, too.

6 thoughts on “7 Considerations When Selecting a Prep Center for Your FBA Business

  • March 22, 2016 at 7:20 am
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    Great Post, as usual.
    I have a question : regarding the fact I’m an european citizen living in europe, knowing NOTHING about all taxes and US habits. So a prep center really makes sense. I don’t wanna talk about PL products processes.
    BUT, for somebody who plans to do OA at wallmart office depot best buy toys’r’us websites etc…how could it work ? Because day 1, you find a deal on site 1, you purchase 5 units of toys. The day after, you find 10 items on kitchen goods, day 3 you purchase 20 videos games @ another one and so on. How to optimize shipping cost at the prep center company ? Cause I feel that once the company receive and inspect order, it will send automatically to Amazon warehouse. The best way to cut margins. How to deal with that ?
    Thank you.

    Reply
    • March 22, 2016 at 8:04 am
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      Most Prep Centers will work with you on this and only send a shipment to Amazon when you’re ready to (although there might be a nominal storage fee for the week or so while various items arrive).

      Reply
      • March 22, 2016 at 10:32 am
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        Hey Lotfi and Chris! {Original poster, Suzi, here just chiming in.} This issue is something you will want to discuss with the prep center to make sure that they can accommodate your needs. You’ll want to see if they can hold back your products for you for a certain amount of time so that you can accumulate enough items that it makes sense to send in to Amazon. And yes, you are right. It doesn’t make sense from a financial perspective to send multiple small shipments, but rather wait until you have accumulated at least a decent sized box’s worth. Also, keep in mind that when those creating the shipment, Amazon might ask you to split them up into multiple shipments…. You could ask the prep center to ship, say, after they’ve accumulated 50 items from you. (I’m just throwing this out there as an example.) Remember that some prep centers will charge for storage after a certain period of time has passed, so make sure you calculate this possibility.

        Reply
  • March 22, 2016 at 2:43 pm
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    Great post!

    I’ve used prep centers extensively! I’m looking at a few boxes of stock right now at my business partners apartment for the first time after selling FBA for a year. But for that first year I was backpacking or living on ski hills.

    So there is truth in this post. It’s doable!

    We decided to get a bit of stock at my partners apartment this time so we could ‘appreciate’ the time and effort that goes into all the prep work as I have a felling half way through we are going to want to kill ourselves haha!

    Reply
    • March 22, 2016 at 3:12 pm
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      Exactly, Dominik. People can get into FBA and not be tied down to receiving and processing their inventory. Looks like you’ve experienced a bit of both! Lucky you! It really is a business someone can run while couch surfing their way through Cambodia, right?!

      There are also people who are disabled in ways that make it very difficult to physically process items, all the while still being able to run an Amazon (or eBay or some other e-commerce business) from their laptops :).

      Happy you liked the article!

      Reply
  • November 1, 2016 at 3:40 am
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    One important thing I see not discussed is inventory loss and damage reimbursement policy. I have checked a list of FBA prep and ship services available on Reddit and NONE of them have policy whatsoever.

    Reply

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