Amazon Seller Guide: Inventory Placement Service

As an amazon FBA seller, apart from the obvious product costs, one main factor the attributes to the main costs in selling FBA is logistics. When you think about it you are paying from your product to get to the amazon warehouse; where in our case we are shipping our products from Chiang Mai Thailand, to Los Angeles USA it can get costly. That’s already a big cost for us but then there is the cost of shipping from Los Angeles to the Amazon warehouses which are state wide. When you sell FBA, it requires you to make shipping plan. you can check out our step by step process here

The shipping plan you create in your account for your shipment from you to the amazon warehouse will go into a receive center and in turn be distributed to many fulfillment centers despite being within the same category or the same product.

Note: One shipment into amazon can consist of products that are within different product categories thus making it inevitable that the products will not be located in the same warehouse.

But why should I care?

So once your product is out of your hands is that it? Definitely not. Now if all your individual products were to go to separate warehouses through out the entire country, the logistics cost would spiral through the roof.

Amazon thus has a IPS ( Inventory Placement Service) system in which all your stock, providing it is within the same product category will all be shipped and located in the same Amazon Warehouse.

Fees

Naturally fees do occur but either way you would have to pay, why not make it a controlled cost right? Amazon splits the costs per item pretty simply ; size category and weight. The heavier the item the more expensive it is per item

Now for example if you were to have 200 items being sent into the amazon warehouse with the weight of 1.5 pounds per item it would be

200(Items) x $0.40= $80

So a set in stone figure of $80.00 to ensure that your products get to the same fulfillment center. It does seem steep but the figure can definitely go higher if you aren’t careful with your logistics planning!

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