Is it Time to Use an Amazon Prep Service | Amazon FBA

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What is an Amazon Prep Service?

Amazon FBA sellers need to abide by a long list of rules. When you send products to their fulfilment centres, they need to be a certain way. OR ELSE. The consequences are quite severe if you don’t follow their instructions. It starts at a slap on the wrist and often quickly scales right up to account suspension. For that reason, you need to make sure that what you send in adheres to their guidelines and won’t cause any trouble when it gets to the other side.

It’s Amazon’s reputation on the line at the end of the day. If we send in shipments containing products that slow down their workflow or get to customers in a less than satisfactory state, they’re the ones that suffer. To keep things flowing smoothly, Amazon encourages us to do a few things with our products before we send them in.

Although optional, the top thing on the list is to apply an Amazon barcode to each product. They can do it for you (at a cost) but it needs to be done so every item in their fulfilment centres can be processed efficiently. Particular items may need to be polybagged, bubble wrapped or have suffocation warning stickers applied. All of these things take time to do. It may not seem bad at first, but it’s a different story when your front room is filled with polybag off-cuts and stray pieces of bubble wrap.

Prep services are the middle (wo)men that ensure that what you send into Amazon is all above board. They remove stickers. They apply labels. They bundle. They do all of the dirty work, and then they create a shipment for you and get UPS to send it off to Amazon on your behalf.

Is it Time to Use a Prep Service?

Before you decide to use a prep service, there are a few questions you need to consider:

How Much Time Do You Spend Prepping?

Is your Amazon FBA business a full-time thing or is it part-time? Either way, they more shipments you send out, the more time you’re going to spend preparing products to be sent out to Amazon. Do you have the resources to do that yourself, and will you once you grow your business to whatever size you would like it to be? Think about it. Could you get someone else to do it for you?

Do You Enjoy Prepping?

Some people actually like doing it. I hear that. I just think that if you’re the one doing the business development, your time is probably better spent doing something other than prepping products. It really depends on what needs

Do You Have the Space for Prep Materials?

Bubble wrap costs money. As do poly bags. As do cardboard boxes. All of these things take up space too. Do you actually have the room for this? One of the reasons many people choose Amazon FBA over eBay is because it’s inventory-free (ish). Using a prep service would mean that you never actually have to touch the products at all. It would be truly inventory free, and you wouldn’t have your space taken up by all of the things that go along with product prepping.

What Proportion of Your Inventory Requires Additional Prep?

Basic prep is just the fundamental labelling. Anything else is the additional prep. It’s the latter that really eats into time. Labels tend not to take much time. You’re going to be handling your goods anyway, so does it really matter if you need to stick a few stickers onto them too? However, if you come home from work and have to spend the next few hours making packs of three toothpastes and packs of eight shower gels, are you really going to be able to do it in the long term?

It may even be a wake up call to adjust what you’re sourcing and to move away from things that require additional preparation, so you can get your time back.

How Strong are Your Margins?

Outsource your prep and additional costs will follow. Depending on who you go with, it will probably cost around 50p per item. Can you afford that? Do you work with margins that allow for that kind of additional expenditure to get thrown in there.

What’s My Experience with Amazon Product Prep?

I do all of my Amazon FBA product prep at home. The way my business is now, I don’t need to do much else. The vast majority of my items only need to have a label applied to them. That said, I have an Impulse sealer, rolls of bubble wraps and poly bags for days at home, because most of my shipments will contain a few things that require a little additional prep. Hollie does all of this for me, so it’s not taking up any of my time. If it got to the point where the shipment sizes were unmanageable, we would probably change up the sourcing before we considered using a prep service.

In my case, I do, but we can easily manage without any additional help. From what I’ve heard from other sellers, the main problem with these services is how quickly they’re able to send out shipments. Lots of deals are time-sensitive, so the last thing you need are delays after you’ve done all the hard work of finding the deals. Take too long to get your inventory to Amazon and you may miss the boat. The margins may have depleted or the sales velocity may have dropped.

I’ll use my latest shipment as an example. I sent it out on 27^th December, after having prepped it all in an hour on Boxing Day. It contained 80 units (from 39 SKUs) of last minute arrivals from before Christmas.

Buying price: £511.90

Expected selling price: £1,019.96

Shipping: £11.56 to send via UPS

Estimated profit: £508.06

Now let’s see how things would have been if I used a prep service. Let’s also consider that the shipment probably won’t have gone out until the first or second week of January.

Prep expenses (a £0.50/unit): £40.00

Estimated sale value reductions: 5%

Estimated profit: £405.50

That’s a whole £100 less, when it took barely any time to do, and I would have retained more profit from sending it in sooner. Imagine if this was the lead-up to Christmas and I needed things sent in for the final sales rush? All of these factors mean that it just isn’t for me. You may be in a different boat though.