One of the (many) beauties of selling on Amazon is that a lot of the monotonous aspects can be outsourced. The #1 task that can be outsourced (and should be): prepping and shipping. There is no shame in hating prepping and packing. You can work hard without moving boxes.
Ironically, the more time you spend doing manual “hard” labor, the slower your business will grow. This is coming from a guy who loves nothing more than the testosterone rush of “out sweating” his competitors. In this case, doing grunt work is futile.
Spend your energy in the gym, use your mind in your business. Manual labor in an e-commerce business is like running on a treadmill and expecting to get somewhere.
Let's talk about how you can get past doing this all yourself and the steps to bring professionals on board to handle the process while you focus on higher level tasks.
What is an Amazon prep center?
If you don't use one already, I will assume it's because you don't know how awesome they are 🙂
#1 Register with a company.
#2 Ship your goods to the prep center's address.
If you buy wholesale, private label or online arbitrage, instead of having the goods shipped to your location, simply have them sent directly to the prep company you signed with.
#3 The prep company receives your goods and charges you per item processed (or a flat fee).
Prices vary, but relative to the time you save, it is a tremendous investment if you manage it correctly.
Won't It Cost a Ton?
You make money when you are sourcing products or making deals with suppliers. Monotonous tasks like prepping take you away from your core work (the stuff that YOU do well because you are experienced and have a particular skill set).
Ask yourself these simple questions:
- How much time do I spend prepping and shipping my product?
- How much money do I estimate I earn when I am sourcing?
- How much would I earn if I traded my time prepping for more sourcing? Time Prepping x $/Hour Sourcing = (Value of Prep Company).
- How much would I spend on a prep company? This will be your estimated units shipped per month x prep fees. Prime Zero Prep works on a fixed rate scale that varies if you do wholesale or online arbitrage. There are also discounts if you pay quarterly instead of monthly. This is easy to calculate.
- Do your prep costs total less than your potential earnings sourcing? 9 times out of 10, it does.
If Prep Costs < Potential Earnings if Time is Spent Sourcing Instead –> Use Prep Company
If Prep Costs > Potential Earnings if Time is Spent Sourcing Instead –> Don't Use prep Company
How to Leverage Prep Companies to Make More Money
It is simple: calculate the prep costs into your buying parameters.
If an item would make you $10, estimate what it would make you after your prep fees and THEN ask yourself if it is still within your buying threshold.
You may pass up more items than normal after prep fees, but overall, you will make much more. You will now be sourcing MORE products because you will spend LESS time prepping and packing.
What if you could source 50% more products at 10% smaller margins total? Good deal to me.
OR what if you could source the same amount of products, but at higher margins and better returns even AFTER you pay your prep fees? That is what more sourcing time will allow you to do. Your time sourcing is always more valuable than your time prepping. You can take that to the bank.
When you crunch the numbers, it really is a no brainer.
Which Prep Company I Recommend
There are multiple prep centers in almost every state, but there is only one I know to recommend: Brenden Sullivan‘s Prime Zero Prep.
In fairness to all the others, I haven't tried them (not possible) and some are great too I'm sure, but I KNOW PZP is going to give you great service.
They are going to give you:
- Amazing attention to quality. I believe that the team at PZP will do a more thorough job than 99% of sellers would themselves…they are pros and have mastered the process.
- Fast work without cutting corners. Less time to warehouse = Faster time to profits. Simple. Some prep companies have horrendous turn around times.
- Detailed record keeping. They have SAVED several sellers accounts because of this… trust me.
- Competitive pricing. Pricing varies for wholesale vs. OA sellers and if you pay quarterly or monthly. The rates are fixed based on how many units you sell and there is a per fee if you need to go over (which is reasonably priced).
This is my only prep company affiliate and I personally stand behind their quality with my name. If you are ready to try a prep and ship company in 2017, I HIGHLY recommend you start your search at Prime Zero Prep.
Again, focus on what only YOU can do for your business. Spend your time growing, sourcing and making deals. Let the experts handle the monotonous shipping and prepping.
They have a hard cap on members and they hit it frequently. If you plan on using them in 2017, don't wait, contact them today.
How to Pick a Prep Company
Now, I recommend Prime Zero Prep but there are many other companies out there as well. I recommend you consider several before you decide on which to work with.
Here are some important steps and questions to ask:
- Where is the prep company located? Logistics matter. If you do a lot of private labeling and Chinese imports, working with a west coast company may be your best bet.
- Are they located in a tax free state? Many of the most popular prep companies are in tax free states. This is awesome because you can often pay your prep costs with the money you'd save on sales tax (depending on where you live). Currently, the only states without sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon. Prime Zero Prep is located in New Hampshire, a tax free state.
- What is there average turnaround time. You should be aiming for a company that works at around 3 business days or less during regular operating times (Q4 will always be slower).
- What are their hours and days of operation? These vary. Some companies work through the weekend while some don't.
- What is their pricing? Do they offer bulk discounts? Most companies offer tiered pricing.
- What are other people saying about them? It is not possible for one person to know about every single prep company. Go on Facebook and research the good and the bad.
- How long will they store your items. You may want to accumulate more of an item before creating a shipment. Make sure that this is ok with the prep company.
- Here is a very thorough list of prep companies from the lovely people at SellerEssentials.com.
- Here is a another list full of unadulterated reviews and feedback from the savages at Reddit.
- Here are 7 steps to help in your prep company selection process.
- Here is what Amazon sellers are saying on the seller central forum.