Using an Amazon FBA prep service for your arbitrage business

Unfortunately there are a few pitfalls you can fall into when doing FBA and one of those is shipping. Maybe you don’t have the space to store bulky items at your home until you’re ready to send them to Amazon, or you’re concerned about Amazon’s very strict policies on how your items must be packed and labeled. Fortunately, there is a solution that can help you with at least some of this – an Amazon FBA prep service.

A prep service is effectively a middleman that will receive your items, store them for a period of time if you so wish and then package and ship them to Amazon for you. They charge a fee to do this, but you’ll never have to worry about packaging or label correctly for Amazon again. In this article we’ll go through everything you need to know about using a prep service for selling your online arbitrage products through Amazon FBA.

Why Amazon FBA prep services exist

At first glance, you might think that sending items to Amazon FBA is as simple as throwing products together into a box or onto a pallet and sending them to an Amazon fulfilment center.

Unfortunately this isn’t the case. Amazon is very, very picky about the shipments they will accept, and if you don’t send an item in exactly the condition they expect, they will reject your shipment and you will be liable for the return charges.

Additionally if your items get damaged during transit, even if it’s not your fault, Amazon will reject them and you’ll have to go through a lengthy process of claiming from your carrier. Amazon’s policies are extremely strict and it’s almost impossible for an online arbitrageur doing things by themselves to keep up with all the individual requirements. This is where FBA prep services come in.

With a prep service, you ship your items to their facility. Most services will have a dashboard where you can notify them of items you’ve sent to them and where you can check to ensure everything has been delivered safely. After this, they will prepare your products for shipping to FBA. Many FBA prep services have many years’ experience in doing this and will know exactly what Amazon expects. They will then (upon your instruction) use an Amazon partnered carrier to send the items to an Amazon FC and then your items will be ready for sale on Amazon.

Why use an FBA prep service?

Put simply, because it’s a lot easier than doing it yourself. Keeping up with Amazon’s policies can be very daunting for new sellers and if you get things wrong, it can be costly. Amazon has been known to reject shipments for things that sellers may consider trivial, such as not using an approved carrier, or even having their carrier turn up at the wrong time.

Of course, we’re assuming you’ve already picked your products – and if you haven’t, you should be using a product sourcing tool such as SourceMogul, which can scan millions of products at hundreds of retailers to find you the best deals on products you can resell on Amazon. We offer a 7 day free trial, which you can claim at the link below.

Other things can go wrong when shipping to Amazon – if you accidentally ship your item to the wrong fulfillment center, Amazon will reject it. If your item arrives damaged, Amazon will reject it. If the FBA shipping label is incorrect or the FNSKU is missing, Amazon will reject it. Amazon has even been known to reject shipments that arrive late, or have outstanding duties or taxes.

As such, it’s extremely important you get this correct, as any mistakes can lead to a large bill from your carrier for the return of your items. In some cases, Amazon has even been known to dispose of items – so this is where an FBA prep service really comes into its own, as above all else it gives you peace of mind that your items will actually be accepted by Amazon.

Choosing a prep service – what to look for

There are lots of Amazon FBA prep services out there, and unfortunately not all of them are good. Many of them are, however, and there are things you should look out for when choosing one. This isn’t an exhaustive list, and if you’re looking for a prep service you should be considering them a partner in your arbitrage business, so make sure you do the appropriate amount of due diligence on any prep service you’re considering.

Location

One of the most important things to consider is where the prep service is. Many of the larger services will have multiple locations around the US, but for example if you’re in Los Angeles, and the prep service is in New York, you’ve got to bear in mind that the cost to you to ship your items to the prep service (especially if they’re bulky or heavy) is going to be a lot more than if the prep service had a facility in, for example, San Diego.

Additionally you’ve got to consider the time it takes. Amazon will give you a 90 day window once you’ve told them you’re shipping products to them. If you want to ship coast to coast over the holiday season, for example, it’s far more likely that there are going to be delays in your item getting to the prep service, particularly if you’re shipping ground. You could ship by air but this has the potential to be prohibitively expensive and will eat into your margin very quickly.

The facility itself

This is another thing to consider – if you’re happy with their location, are you happy with their facility? You need to ensure you’re dealing with a serious operation, and not someone who’s just rented some warehouse space and is making a go of running an FBA prep service. Ensure there’s enough space in their warehouse if you’re planning to ship a lot of items to them. Ensure they’re using a proper inventory management system or an ERP to make sure your items don’t get lost. How long will they keep your items in storage without charging you? All of these are things you must think about.

Track record and customer reviews

How good are they at meeting Amazon’s criteria? Are you seeing reviews of other arbitrageurs saying that their goods were refused by Amazon because the label wasn’t correct, or they arrived damaged because the prep service didn’t pack them properly? What do people say about their online interface? Is it intuitive and easy to use or is it buggy and slow? What’s their communication like? How quickly do they ship out parcels? All of these are things that people will be either complaining about or praising the prep service for, and you should ensure you read as many reviews on as many different websites as possible before choosing a prep service.

Take these with a pinch of salt, however – as people are far more likely to leave a negative review than a positive one. Additionally, a business with 100% positive reviews is a bit of a red flag as this could suggest the reviews are fake. If you know other arbitrageurs, you should ask around and see what they’re using as a personal recommendation is much stronger than anything you can read online.

Costs

This is something you need to consider carefully, as if you get it wrong, you can lose money on your items. Many prep services give fixed pricing for arbitrage prep per unit. Others will quote you based on the volume of packages you’re sending to them – which for an arbitrageur, can be difficult as you never really know what’s out there that might be profitable. Make sure you pick a prep service with a pricing model that works for you.

Also – many services will charge an account setup fee. This is usually something minimal (about $30 or so) but is something to consider. Also you need to be aware that most prep centers will give you a set period during which they will store your products for free, after which they begin to charge you, and this charge is generally per cubic meter. We’re not saying to avoid a prep center that charges these fees (most do) but just that you need to be aware of them to avoid racking up a big bill.

Frequently asked questions

How much does a prep center cost to use?

This is very much dependent on the individual facility. Some will charge per item, some may charge a flat fee for a set number of items or others may have a different pricing model. Additionally if you want them to repackage items or handle returns there will likely be further charges.

How do I prepare FBA shipments for a prep center?

Generally you don’t need to – the prep center can just receive items in the same way you’d receive them through the mail and then either repackage or relabel them so they’ll be accepted by Amazon. Usually you’ll be given a specific address or code linked to you so the prep center can identify items sent to them as belonging to you.

For example, the prep center may tell you to ship to their address, but in the field where you’d usually give your name, you’ll be asked to put something like “Box 18372” so that it’s easy for them to tell the item is yours.

How many items at a time can I send to a prep center?

This depends on the individual prep center as they may only be able to handle a certain volume of items at a time. However, if you give them an idea of exactly what you’re expecting to send there when you go through the quotation stage, they should be able to tell you what they can accommodate at any given time.

Are prep centers reliable?

Again – it depends on which one you pick. Many prep centers have been operating for years and are responsible for shipping thousands of packages to Amazon every day. Others might not be so reliable. You need to ensure you do as much due diligence on the prep center as possible to ensure you aren’t going to have to deal with poor service.

Summing up – is a prep center worth it?

Ultimately this is down to you. Keeping tabs on Amazon’s ever-changing shipping policies is a difficult job in and of itself, and if you’re trying to source products using SourceMogul at the same time, you might find yourself overwhelmed.

And of course, the game is to find products at a discount and sell them at a profit, and if you’re worrying about exactly how your item should be packed rather than looking for your next arbitrage opportunity, you are losing money. A prep service takes this worry away and leaves you with more time to do what makes you money – source new products.

Only you can decide whether the cost is worth it for the convenience it provides you – but we would recommend it. We’d also recommend a subscription to SourceMogul, which scans thousands of retailers for millions of products leaving you more time to focus on running your business. Check it out using the link below for a free 7 day trial.