For FBA prep, you have three choices, including paying Amazon, doing it yourself, or outsourcing with a third-party prep center. With Amazon, you must consider your monthly shipping and the size of your profit margins. You are eligible only when you meet the minimum threshold of 40 items per month. Even if you meet the threshold, you still must determine if their hefty fees are economical for your business, or if the fees will potentially bring your small margins to zero.
If you decide to do the prep yourself, you will have to factor in costs such as rent, employees, supplies, technology, and management time. Renting a small space will cost you quite a bit by itself ($750 per month at a bare minimum), depending on the location.
Unless your rented warehouse has dock access, you will have to incur lift gate fees when you order from suppliers who ship items on pallets since small spaces don’t usually have loading docks. After renting the space, you need to hire one or more employees each at about $2500 or more per month (including benefits. In short, you can easily spend more than $3000 per month doing FBA prep yourself.
When you outsource FBA prep, you only pay for the space you use, a price that is usually lower than renting your own space. You will not encounter lift-gate fees and can enjoy additional discounts if you commit to longer terms. Furthermore, you won’t need to hire employees; thus, you can rest assured of faster processing times. The cost of outsourcing FBA prep services with a prep center is significantly less expensive than other options.
FBA Prep centers usually charge the following fees:
- Labeling Fees
- Prep Fees
- Stickering Fees
- Box, Bubble Wrap and Pallets Fees
- Inspection Fees
