Hello! One of my January goals was to open one new wholesale account. Well, I actually did better than that and opened 5 of them!
I believe that part of that success was because I’ve been using a prep center to process my online shoe orders. This has given me extra time during the day so that I can concentrate on wholesale. Without the prep center, I would have spent my afternoons playing “Shoe Tetris” and believe me, I’m super slow at figuring out how to fill up the shipping boxes just right.
In today’s post, I’ll go over prep center pricing, locations and how your general workflow will change.
Prep Center Pricing
When you start searching around for a prep center, I suggest that you first come up with a list of the typical products that you order online. Then make a note of any products that need extra processing such as used books, bundles, glass, groceries and oversized units.
Once you have your list, then start contacting the prep centers to confirm that they will process your specific type of inventory and to find out how much they charge. For example, when I first started price-checking, I contacted several prep centers to see how much it would cost for them to process 10 pairs of shoes.
When you’re checking prices, here are a few questions to find out:
- Is there a sign-up or joining fee?
- What are the per-item charges and/or monthly charges?
- Are supplies such as poly bags, bubble wrap and shipping boxes additional?
- Are there storage fees?
- What is the procedure if the prep center receives damaged inventory?
- Is there a minimum number of units that must be included in each shipment?
- If you live near a prep center, will they accept your retail arbitrage purchases?
Each prep center sets their own prices, but as a point of reference, I’m currently paying Pacific Prep Services $1.50 for each pair of shoes processed and I paid the same to FBA Prep and Ship last quarter.
While you’re doing your initial contact with the prep centers, also make note of their customer service. You’ll want to work with one that gives you a great first impression by answering your questions promptly and courteously.
Prep Center Locations
In Jim Cockrum’s free list of prep centers, you’ll see that the prep centers are located in several different states. The state that your prep center is in can make a difference in how much you pay in shipping fees and sales tax.
Save on Inbound Shipping Fees: If you live on the west coast and are always shipping to Amazon’s east coast warehouses, you might consider signing up with a prep center on the east coast to save on inbound shipping fees. But as a warning, this isn’t guaranteed because Amazon can change your normal warehouse location at any time.
The reason that I chose Fulfillment Butler (now Illinois Pack and Ship) as my first prep center was because of their close location to the IND4 warehouse where most of my shoe shipments go to. I live on the west coast and figured that the savings in inbound shipping fees would more than cover the prep center fees.
Well, I was wrong and here’s what happened. Every shoe shipment that I had Fulfillment Butler process was sent to California. Go figure.
*** Don’t let my experience keep you from choosing a prep center that’s close to your normal warehouses!
Save on Sales Tax: When you order your products online, you’ll use the prep center’s address as your shipping address. If the online retailer charges sales tax, they will calculate it based on the prep center’s sales tax rate. This means that if the prep center is located in a state that doesn’t have sales tax, then you won’t be charged sales tax.
Two of my favorite online retailers charge sales tax when I have my online shoe orders shipped to my house. My sales tax rate is 8.4% so if I buy 4 pairs of shoes for $100, I’m charged $8.40 in sales tax. By shipping the shoes to Pacific Prep Services in Oregon, I exchange $8.40 in sales tax for $6.00 in prep center fees. This saves me $2.40 plus I save on not having to use my own prepping & shipping supplies.
Prep Center Workflow
When I know that I’ll be shipping my online orders to a prep center, my workflow immediately changes.
The first change is that I have to be super careful before I order any products. I have to make sure that I matched up the product to the exact Amazon product listing. This is because you won’t be able to scan in barcodes into your listing software because you won’t have the barcode in front of you.
Then after I order my products, I copy and paste the ASINs into a spreadsheet so that I can list the products later.
*** FBA Prep and Ship enters the UPC number into your shared Google Spreadsheet!
The second change is that after you order your products, you’ll need to let the prep center know what you ordered. Each of the 3 prep centers that I used provides a shared Google Spreadsheet. This is where you list what you ordered and the prep center will update the spreadsheet as they receive and process the inventory.
The rest of the workflow really depends on if you will continue to do all of the Seller Central tasks or if the prep center will do them. The table below shows the general process of how each workflow works:
|Prep Center without User Permissions on Your Amazon Account||Prep Center with User Permissions on Your Amazon Account|
|You order products||You order products|
|You tell prep center what you ordered||You tell prep center what you ordered|
|You list your products||You list your products|
|You send shipping plan to prep center||You send shipping plan to prep center|
|You email a PDF file of your product labels to prep center||Prep center prints the product labels|
|Prep center preps & labels and packs the shipping boxes||Prep center preps & labels and packs the shipping boxes|
|Prep center sends you box content info, box sizes and weights|
|You enter the box info and email shipping labels to prep center||Prep center enters the box info and prints shipping labels|
|Prep center gives shipping boxes to UPS||Prep center gives shipping boxes to UPS|
I prefer that the prep center handles the Seller Central tasks because that means there’s less work for me to do! 🙂 This gives me more time to do other things.
With my current arrangement with Pacific Prep Services, I have it really easy. All I have to do is order my products, update the Google spreadsheet and list my items. They ship my inventory once a week and they have permission to create my shipping plans and to do all of the Seller Central tasks.
If you’re ready for a prep center, I hope that this post helps you with choosing one. Also remember that you can use more than one at a time. For example, you may send your online arbitrage orders to a prep center in a tax free state and your wholesale orders to a prep center that’s close to your wholesaler’s distribution center or close to an Amazon warehouse.
Please let me know if you have any questions about prep centers. If you’re already using one, please tell me about your prep center! Use the comment form below or leave me a note on Facebook!