Amazon FBA Prep Centre

Undoubtedly, one of the largest areas of growth areas in business and that has a massive knock-on effect on the logistics industry is eCommerce. Luckily, this boom in eCommerce was matched with an equal rise in the required associated infrastructure that would support the logistics requirements. One of the key components in this infrastructure is the development of Prep Centres - warehousing services that support the preparation (unsurprisingly!) of your products, ready for onward movement to a fulfillment centre (e.g. Amazon FBA) and ultimately your customer.

In this section of the Knowledge Centre we will cover what services a Prep Centre offers, how they can support the growth of your online (or offline) store and what the key considerations are when you are choosing a Prep Centre to partner with.

Firstly, let’s cover a couple of key questions – why do Prep Centres exist and what is a Prep Centre

At LOGISTO we have run our own ecommerce store for years and we know first-hand that one of the main barriers to running a successful ecommerce store is the storage, packing and dispatching of the products to your customers. We know it can be a headache to find the space and it can certainly be a headache having to label all the products to send to customers or to a fulfilment warehouse such as Amazon for FBA. Naturally, as many ecommerce entrepreneurs start in their spare bedroom or garage (or even shed!) this can significantly limit the scalability of your business through a lack of space and resource. This is where a Prep Centre can step in and support. A Prep Centre will support you with everything you need to run your ecommerce business, leaving you to focus on customer acquisition and sales, leaving all the logistics to a trusted 3^rd party.

What are the benefits of a using a Prep Centre?

Benefits of Using a Prep Centre

1. More time to focus on your core business activities - selling product!

2. Work/life balance – stops the need for your inventory being delivered to/collected from your house/warehouse

3. Less stress caused by having to keep shipping and prepping supplies in stock

4. Potentially save on inbound shipping fees — Some prep centers are located closer to FBA warehouses than your current location might be, and your inbound shipping could drop by using a prep center for your deliveries.

5. Speed – Prior to outsourcing prep work, entrepreneurs find that they can get bogged down in all the elements and jobs needed to run an e-commerce business. Key components such as sourcing can (quite rightly) take the majority of your time and the last thing you want to do is get stuck pulling all-nighters and prepping your stock for onward movement to Amazon. Couple that with the fact that Many (most) prep centers have 24-48 hour turnaround, which means that can turn around big volume quicker than you can…. which can be crucial for time-sensitive inventory and increasing sales!

6. More freedom – back to the first point (reiterated as it really is so important). After all, freedom is the reason many people want to get into e-commerce and outsourcing of any task only adds to the freedom. However, the main point for this outsourcing remains the key one – outsourcing gives you the time to focus on the core activities of your business, increasing sales and profits

Sounds good, but what services does a Prep Centre actually perform?

Whether you are selling Private Labels, Wholesale or Retail Arbitrage the process will largely be the same. A Prep Centre will provide the following (and more!) services:

Receiving: Once you have ordered your products, you have them shipped to the Prep Centre. They will receive the goods, and inspect and document the contents.

Processing: The Prep Centre will process the products as to your requirements (or those of the final fulfilment centre destination – e.g. Amazon FBA). They will provide additional packaging services such as bundling, repacking, bubble wrap and labeling.

Pick and Pack: The Prep Centre will prepare your goods for their onward destination into cartons, ready for courier pick up. A good prep center will have this completed in a very short period.

Shipment: Working with you, a Prep Centre will finalise the shipment plan and arrange to pick up.

It is as easy as that!

The above is the standard service you can expect. Many Prep Centres will also provide additional services such as arranging professional photography for your products. Many will handle returns for you (sadly part of the e-commerce journey!). This will involve the receipt, inspection and repack of returns which can either be resold online or forwarded to yourself.

Pricing

The cost of the above services will vary across the country, but a guide is provided below. A good Prep Centre really is worth the money and will allow you to focus on the key aspects of your e-commerce business.

Please note: Some Prep Centres charge a monthly membership fee on top of the pricing per unit, although you will often receive a number of activities included in that monthly membership at no additional cost.

Example price list:

Below, we have provided an example of the actual costs that you can expect from a UK Prep Centre. As a rule, you can expect a number of services included within the basic cost. There often include the following:

Delivery and received product details

FNSKU labeling

Packing and preparation for shipment

Less than 100 Units Flat Rate £0.75 - there is no minimum order quantity with a flat fee.
ITEMS PER PRODUCT VARIATION Less than 10
• Total Units 100+ £0.55
• Total Units 200+ £0.50
• Total Units 500+ £0.45
ITEMS PER PRODUCT VARIATION More than 10
• Total Units 100+ £0.50
• Total Units 200+ £0.45
• Total Units 1000+ £0.43
ITEMS PER PRODUCT VARIATION More than 100
• Total Units 100+ £0.45
• Total Units 500+ £0.35
• Total Units 1000+ £0.32
• Total Units 10000+ £0.25

Value added services:

Further to the ‘standard’ services, good Prep Centres will be able to offer a number of added services for an additional fee. These include, but are not limited to the following (pricing provided for guidance):

Added services for an additional fee
• Suffocation , expiration , warning labels £0.05 per label
• Poly bags up to 25x25cm £0.10
• Oversize items £0.25
• Heavy items - over 5 kg £1.0
• Double sided box 63x48x48cm £2.00 – (note: good/responsible Prep Centres will reuse the boxes that your product arrive in wherever possible to reduce cost and waste)

Bundling

The bundling of items in a poly-bag, having it labelled (FNKSU and suffocation warning labels) and ready for shipment can cost from as little as £0.45 per bundle.

Now that we have discussed the individual costs, let’s run through a couple of real world examples, to better understand the true cost you can expect for your business and the added value that a Prep Centre can provide.

Order 1:

1000 units of a single product - no variations
• £0.25 per item - inspected , labelled , boxes re-used ,repacked and ready for FBA shipment.
TOTAL CHARGE : £250 + courier /pallet shipping.

Order 2:

200 units of a single product - no variations , bubble wrap required + 2 large boxes needed.
• £0.45 per item - inspected , bubble wrapped, labelled , 2 double sided eco friendly boxes supplied ,repacked and ready for FBA shipment.
TOTAL CHARGE : £114 + courier /pallet shipping.

Of course, the above are indicative and the exact pricing will vary by product, services required and which Prep Centre you select. As always, it is best to speak to the suppliers themselves to run through your requirements. Luckily (OK, not luckily – it is what we do!), LOGISTO have an exhaustive list of Prep Centres located across the UK to help you find the perfect site to support your business.

If you have any questions, please pop it on the LOGISTO Forum or contact us and we will be happy to give you our thoughts.

Thank you

LOGISTO Team