Sales Taxes
If you purchase your products from online stores in the US (i.e. online arbitrage) you could be required to pay sales tax. You can however reduce costs by choosing the services of a preschool in a state without sales tax or at a low rate. How? By shipping your stock straight to the prep center. If your product isn't subject to sales tax in any of the four states in America (Delaware Montana New Hampshire Oregon), then storage fees that are incurred as you wait for additional stock to be delivered to your state will be less than the taxes you'd need to pay. The sales tax in the US can range from zero to just under seven percent. A prep center in a state where the sales tax is reduced by two or three percentage points could be a significant impact on the cost of your services.
Climate
If you sell perishable items such as food items or beverages, the first thing you should ask any prep company is whether their receiving/storage facilities are climate-controlled. It isn't a good idea for your products to go bad because they weren’t stored in the correct conditions. This doesn't just apply to perishable goods. Climate control is also important in the event that your inventory is headed to an unstable or hot state. If the climate isn't properly controlled your goods could deteriorate or get damp.
Storage Facility
FBA prep services are primarily responsible for getting your inventory ready to go into FBA. However the prep centers are becoming more and more popular for sellers who want to store their inventory. There are two main reasons for sellers to do this. The first reason is that it can be less expensive than storing all your inventory in a Fulfillment Center. Sellers keep their inventory at their prep company and then buy FBA according to their sales velocity. For instance that if a seller owns 10,000 units stored in their prep center and is selling about 1,000 units per month the seller will only be sending 1,000 units to FBA every year. The prep center will keep the rest of the stock. Amazon's suspension philosophy is the third. You can get your stock suspended and it will remain within the Fulfillment Center. It will cost you each item returned, and could take a few weeks to be delivered. Then, you (or your prep center) must inspect your FBA inventory in the Plan of Action. In order to send the stock back to the Prep Center, you'll have to arrange for it to be repackaged. It is an expensive processthat sellers attempt to minimize by keeping their stock in a Prep Center and submitting smaller quantities. This is a good alternative if you wish to get inventory turned quickly. Find out about their insurance. The inventory should be secured against theft and fire.
Processing Time
When selecting an FBA prep service, the speed they can prep your inventory is crucial. There are many variables that determine how quickly you'll need your inventory be prepared. If you store stock in a pre-production facility and ship it out with respect to the sales speed (see above) Then you'll want them not to take more than 48 hours to complete your orders. Many prep services have transparency regarding processing times and offer 24 to 48 hour timeframes for assurances. If you're unable to find this information, ask. Your late shipment rate won't be affected if your prep service takes too long to get your inventory in FBA. Check out the top rated Door to Door Delivery blog for updates.
Inspection
It is also advisable to inquire whether the FBA prep service conducts inspections. While this does not replace product inspections at your manufacturer’s factory, it could be added. Because shipments are rejected, manufacturers don't want to scrutinize them in a way that is too thorough. Imagine your company conducting a pre-shipment inspection. Imagine that you've got 10,000 units and they go through 20% of your goods. There's a good chance your FBA prep team will find problems with your stock after examining it. Danny McMillan believes that many manufacturers don't inspect their shipments in the way they should due to the fact that it increases the costs of shipping and lower their margins. This makes your inspection of your prep service even more important.
In Summary
You can outsource FBA prep to help your business become more productive, but it may also slow your business. It is important to establish a rapport with your prep service. If they seem dismissive when you inquire about their services or concerns, it could be a sign that they are not the right choice for you. Contacting other vendors may be useful as well. You will be able to identify the prep services they utilize and, more crucially the ones you should avoid. As you don't want to see your supplies to be wasted, it is important to make sure it is safe.