Everyday this week I will be posting a quick Amazon FBA tip that will cover a topic that I feel is important that I haven’t covered yet. Most of these tips will be based off of the questions I had while i was going through the whole process as well as answering some common questions that I get all of the time.
I will be posting a new tip each day this week, so make sure to be on the lookout for more!
The first tip I will be covering is a HUGE money saver for those shipping large shipments to Amazon. What I will be showing you how to do is ship your products to one Amazon fulfillment center instead of multiple different ones.
Why This is Useful
You might be wondering why doing something like this would be useful?
Let me give you an example of the scenario that I went through:
I have mentioned in previous updates in my Amazon FBA case study that shipping cost me around $1,500. What I didn’t know when I first received that quote from my freight forwarder was that this quote was based off of sending my shipment to one fulfillment center.
When I created my shipment plan within Amazon’s Seller Central it had me shipping my 1008 unit shipment to three different Amazon warehouses. When I told my freight forwarder about having ti split up my shipment into three smaller shipment and send them to three different warehouses the quote was no longer $1,500.
Now, it was going to cost me over $3,000 to ship my products to these three Amazon warehouses. This killed my profit margins and wasn’t going to work for me.
Luckily, there was an alternative option for me that saved me a lot of money. This option was called Amazon’s Inventory Placement Service.
Amazon’s Inventory Placement Service
This is a service that allows you to ship to only ONE Amazon warehouse.
Yes, there is going to be a small fee to be able to do this but it will more than likely be cheaper than sending to multiple warehouses.
The fees for using Amazon’s Inventory Placement Service is shown below:
Depending on how much your product weighs, that will determine what type of fees you will have to pay per unit to have your shipment go to one warehouse.
In my example, my product fell under the “1 lb. or less” tier so I had to pay $.30 per unit. since I ordered 1,000 units it cost me an extra $300 to ship to only one warehouse.
Compare this extra $300 to the extra $1,500+ it would have cost me to ship to all three different fulfillment centers, you can see how using this inventory placement service could save you a lot of money!
It personally saved me over $1,200!
Now, this will be different for every person and every situation, but what you should do is compare how much using this inventory placement service will cost you to how much it will cost you to split your shipment to multiple Amazon warehouses. Pick the option that will cost you the least and go with it. I would think that sending your shipment to one center will usually be the cheapest option, unless you have a very large item that weighs a lot.
Now that I have explained what the inventory placement service, I am now going to explain HOW to do this for your own shipments!
Step-by-Step Guide on How to Ship to One Fulfillment Center
This is actually really easy to do and doesn’t take a lot of steps. A few clicks and you could be savings thousands of dollars!
1. Go to Your Amazon Sellers Account
The first step is to go to the homepage of your Amazon sellers account.
2. Go to the Amazon Fulfillment Settings
From the homepage, click on the “Settings” in the top right corner and then go to the “Fulfillment by Amazon”. This will be at the very bottom, click on it. See below for further explanation:
3. Edit the “Inbound Settings”
You should be at a page that looks like the one below, then click on the “Edit” button under the “Inbound Settings”.
4. Change the Inventory Placement Option
This is where you change the setting so that you can send your whole shipment to one fulfillment center. Change the setting from “Distributed Inventory Placement” to “Inventory Placement Service”. See below:
Once you change the settings, make sure you click “Update” and then you should be good to go! You can confirm this worked by doing the following step below.
5. Confirm it Updated
The last thing you can do is confirm that it updated. You can do this by going into your shipment plan within your Amazon Sellers Account and see where Amazon is telling you to send your products. If it only shows one fulfillment center then it worked! You should see something like mine, which is shown below:
6. That’s It!
After you do all of the above steps you will now be able to send all of your shipment to one fulfillment center. Like I said, it is fairly straightforward to do this but it can be confusing to find proper instructions on how to do this.
For those of you that prefer watching a video, I have put together a quick video below:
That ends the first tip for the week!
I hope this was helpful for some of you and that this was able to save you some money, because I know it saved me a lot of money. I will be back tomorrow with another tip so make sure you stay on the lookout. Not only will there be a new tip tomorrow, but also all week long so stay tuuned. Thanks for reading!