Sales Taxes
If you purchase your products from online stores in the US (i.e. online arbitrage) you could be required to pay sales tax. If you use a pre-purchase center in a state with either zero sales tax or a lower rate, you may save money. How? You can ship your goods directly to the center for preparation. If your product isn't exempt from sales tax in any of the US states (Delaware Montana New Hampshire Oregon), then storage fees that are incurred while you wait for more inventory to arrive in the state you reside in will be less than the amount you'd have to pay. Remember, sales tax in the US ranges from zero to seven percent. Just a two or three percent reduction in sales tax can make a an enormous difference to your overall costs.
Climate
If you are selling perishable products such as food items, it is best to ask the prep service if their facilities for receiving and storage are controlled in terms of temperature. It is not acceptable for your items to be damaged because they weren't stored in the correct conditions. This doesn't only apply to perishable items. If you are sending stock to a hot climate or a country with extreme weather fluctuations, climate control is equally important. If the climate isn't properly managed, items may become damaged or lose value.
Storage Facility
FBA prep centers' main role is to prepare your inventory to be shipped into FBA. But increasing numbers of sellers are turning to pre centres to store their inventory. The two primary reasons sellers utilize prep centers are to understand why. It's cheaper than having your entire inventory at Fulfillment Centers. According to their sales velocity, sellers store their inventory at their prep center and then transfer stock to FBA. For example that if a seller owns 10,000 units stored in their prep center and sells around 1,000 units per month the seller will only be sending 1,000 units to FBA each year. The rest will be held in the prep center. Another reason for this is Amazon's suspension culture. The Fulfillment Center will hold your inventory until it is removed. You will have to pay for each piece in order to return the item. The item might take some time. Your prep center or you will be required to inspect the inventory placed in FBA as part of the Plan of Action. If you are reinstated, you'll then have to have your stock repackaged and labeled in order to return it. This is a costly procedure that sellers would like to reduce by having their stock stored in the Prep Center and sending smaller quantities. This is a good alternative if you wish to turn inventory around quickly. Find out for their insurance. This is crucial because you want your stock to be protected from theft or fire.
Processing Time
The speed with which your inventory can be prepared is a crucial element to consider when selecting an FBA prep firm. There are many factors that can affect the necessity to be quick. If you've got stock at the prep facility and you're transferring it on the basis of sales volume (see above) You will probably want them to deliver units within 48 hours. Prep services are generally upfront about their processing times. They might also provide a guarantee of 24 to 48 hours. If you can't see this information, you should ask, as you don't want your shipping rate to be harmed because your prep service are slow in getting your goods into FBA. Have a look at the most popular Door to Door Delivery website for details.
Inspection
You should also inquire about whether the FBA prep service conducts inspections. It's not an alternative to inspections carried out by the factory of the manufacturer. But, it could complement the inspections. Manufacturers do not inspect shipments very closely because it can cause stock rejections which cost them more. Imagine that your company performs an inspection prior to shipping. Imagine that you have 10,000 units, and that they inspect 20% of the goods. The FBA preparation company is likely to find additional issues in your inventory. Danny McMillan believes that most manufacturers don't look at their products very closely because they know that rejections can lead to higher costs and lower margins. This makes the check conducted by your pre-production service even more critical.
In Summary
Transferring your FBA prep could help make your business run efficiently, but picking the wrong service can slow you down even more.The main thing to remember is that you should not be intimidated to ask questions - no matter how minor they may seem. You'll have to develop a relationship with your prep provider, so if they are unresponsive when you inquire it's an early warning that they might not be the best choice. Speaking with other vendors could also prove useful. You will be able to identify the prep services they use and, even more importantly the ones you should stay clear of. Because you don't want your stock to be wasted it's important to ensure its safety.