FBA(Fulfillment by Amazon) Prep is the process of preparing an inventory to send to an Amazon fulfillment center for receipt. The main elements of this process are inventory inspection, packaging, and labeling.
It is important to make sure that inventory is compliant with Amazon’s requirements otherwise they will charge you additional fees and in a worst-case scenario, refuse to accept the products. If you are looking for services of third party prep in Canada check this out.
Image Source: Google
FBA Prep warehouses are a cost-effective way for e-commerce companies to outsource the preparation of their inventory.
Advantages of Outsourcing FBA Prep
1. Lower Storage Costs With Pre-Fulfillment Warehousing
The typical use of FBA prep facilities has been preparing inventory for an Amazon fulfillment center, but a growing number of e-commerce companies are using a prep facility for pre-fulfillment warehousing in addition to FBA prep services.
Companies are moving to this strategy because of the significant savings when it comes to storage fees relative to Amazon storage costs.
2. Avoiding Amazon's "Peak Season" Pricing
Amazon’s storage pricing is already more expensive than standard third-party warehousing, but their rates also increase by 220% during “peak season” (October-December).
Amazon is all about moving products quickly and therefore their pricing model encourages companies to limit their use of storage space in fulfillment centers.