Work smarter, not harder. This was a phrase that was drilled into my head as a child and is something that I live by today. As an Amazon seller, you only have so many hours in a day to source, prep, ship, and everything else you need to do to make your business run. Once you hit your maximum capacity, you need to start thinking about how to outsource some of your tasks to free your time up (to work on more important money making activities).
One of the commonly outsourced activity is prepping your products. Sometimes people hire on staff to help prep in your garage or even rent a warehouse for prepping and shipping. Some sellers, specifically sellers who use online arbitrage, private label, or dropshipping, use a 3PL prep center.
If you aren’t familiar with a 3PL prep center, this blog post is going to give you background information, the benefits of using these services, and when you should start considering using a prep center.
What Is A 3PL Prep Center?
A 3PL, or Third-Party Logistics provider, is a company that offers outsourced logistics and supply chain management services to businesses, including Amazon sellers. In the context of an Amazon seller, a 3PL prep center specifically focuses on handling the preparation and fulfillment aspects of the seller's orders or sending the items into Amazon’s FBA program.
Most Amazon sellers are already familiar with third-party logistics through Amazon FBA. When you send your items to an Amazon warehouse and Fulfillment by Amazon (FBA), you are using Amazon’s logistics network of warehouses, planes, trucks, and delivery drivers to make sure your product ends up at the doorstep of the person who bought it.
A 3PL prep center is essentially the same thing, but they handle the prepping step before the products are sent to an Amazon warehouse. Instead of shipping an online arbitrage order to your house, you send it instead to a prep center. Once the products arrive at the prep center, they handle unpacking, prepping, and sending the items into Amazon on your behalf.
This is particularly valuable for sellers who do not have the capacity to handle all of the prep themselves or for sellers who are located in another country. Dropsellers also use prep centers to act as their own version of Amazon FBA and ship the item that is purchased to the prep center for inspection and shipping to the end customer.
What Are The Benefits Of Using A 3PL Prep Center?
A 3PL prep center gives an Amazon seller a competitive advantage that can allow their business to scale and grow. As an Amazon seller, leveraging the services of a prep center offers multiple of advantages.
One compelling reason to utilize a 3PL prep center is the expertise it brings to the fulfillment process. Trained professionals handle the intricacies of order preparation, packaging, and shipping, ensuring that your products meet Amazon's stringent standards. This expertise not only guarantees a smooth and efficient fulfillment process, but you don’t need to stay up to date on the latest updates to Amazon’s policies. You can focus on the parts of your business that only you can do.
Scalability is another key benefit that makes a 3PL prep center indispensable for Amazon sellers. As your business grows in order volume, a prep center allows you to scale at your own pace. You don’t need to run out and hire a bunch of different employees, rent warehouse space, or even buy expensive equipment. Instead you pay a per-item price to have someone else take care of the prepping and shipping processes. This saves you the overhead costs and the extra headaches that come along with growing.
Here are the other key benefits that make using a 3PL Prep Center a game-changer.
- Product Inspection and Quality Control:
- A 3PL prep center ensures that each product is thoroughly inspected for quality and adherence to specifications before it is shipped to customers or Amazon. This includes checking for any damages, defects, or discrepancies in the received inventory.
- Packaging and Labeling:
- The prep center takes care of professionally packaging each product, ensuring it is adequately protected during transit. Additionally, they handle labeling requirements, including barcodes and other essential product information in compliance with Amazon's guidelines.
- Order Fulfillment:
- If you are using a 3PL prep center to dropship, order fulfillment is a key benefit. Once an order is received, the 3PL prep center receives, repacks, and ships the products to the end customer without them noticing the difference.
- Returns Processing:
- Handling product returns can be a complex task.. A prep center manages the process of receiving returned items, inspecting them, and either restocking or processing them according to your specific return policy.
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When Should You Start Using A Prep Center?
This is tricky question, but I like to think of it in one of two different ways:
Rationale #1 - Growing Pains
As one of my favorite business professors of all time said: “You expand when the pain becomes unbearable.”
When you start experiencing growing pains, you should start taking a look at your business and seeing where the pain is coming from and if there is a way to fix that pain.
For example, if you are finding a lot of online arbitrage deals on Tactical Arbitrage and you are starting to drown in packages, you might want to consider outsourcing to a prep center. If you are starting to spend more time prepping and shipping than actually sourcing, you might want to also consider a prep center.
Rationale #2 - Lack Of Time
When you could be doing something else that would make you more money, do that thing and outsource the other stuff. That’s the golden rule of when you should consider using a 3PL prep center.
This holds true with Amazon sellers who outsource listing creation, accounting, ect. Sometimes it costs you more money to try to do something yourself than it saves you by doing it yourself.
Let’s take plumbing for example: If I tried to fix my septic tank, I would have most likely spent a ton of money on tools, equipment, and probably still not have it fixed in the end. Instead, I hired a plumber and he had the problem fixed within a few hours. I had to pay, but I spent that time making money sourcing online. So in the end, I ended up making money instead of doing my own plumbing. The same concept should be considered when making the choice to use a prep center.
Conclusion
The age-old wisdom of "work smarter, not harder" holds true in the world of Amazon selling, where your choices can make your life easier and help you grow your business. Embracing the services of a 3PL prep center can be a game-changer for sellers looking to streamline their operations, scale their business, and focus on the activities that make them the most money.
The benefits, ranging from expert handling of product preparation to seamless order fulfillment and returns processing, provide a competitive edge that allows businesses to grow without the burden of excessive overhead costs. Whether prompted by the growing pains of success or a strategic decision to prioritize time and profitability, the choice to use a 3PL prep center becomes not just a convenience but an important step towards success in your Amazon business.
