FBA Prep Centers play an essential role in the entire Amazon e-commerce ecosystem. Acting as intermediaries, they help merchants comply with Amazon’s guidelines and ensure effective, error-free, and efficient FBA Fulfillment.
However, a Prep Center’s prep operations come with challenges and complexity. The inbound, storage, prep, and outbound processes are subject to inefficiencies and errors that increase operational costs and impact the merchant experience.
In this article, we cover challenges faced by FBA Prep Centers and provide 5 tips on how they can effectively manage the prep operations, decrease costs, and provide exceptional merchant experience.
Challenges Faced by FBA Prep Centers
Below are some of the challenges that all FBA Prep Centers face.
1. Manual and Spreadsheet-based processes
A majority of FBA Prep Centers still rely on managing their operations manually and with the use of spreadsheets. It results in high operational costs, process inefficiencies, and frequent occurrences of human error.
Prep Centers often use spreadsheets in managing inbound consignments, tracking products and associated barcodes, inventory levels, outbound order management, merchant billing, and more.
2. Scalability of Multi-Customer Operations
Prep Centers find it a challenge to cater to more FBA merchants consistently. It is partly because of process inefficiencies that hamper inventory velocity, thus increasing space utilization and leaving no room for additional customers.
At the same time, managing plenty of merchants and their operations is a major challenge when having the manual processes described above. It again restricts the growth of FBA Prep Centers.
3. Compliance with Amazon’s Guidelines
Amazon has stringent guidelines around prepping, packing, labeling, and shipping products to the FBA fulfillment centers. When these guidelines are not met, it results in high costs for the Prep Centers and merchants alike.
These guidelines are also ever-evolving and make it difficult for merchants and their Prep Centers to stay up-to-date and ensure error-free fulfillment.
Tips to manage Prep Center operations effectively
It is difficult to manage prep operations across sellers while remaining compliant with Amazon guidelines, enhancing cost and fulfillment efficiency, and ensuring error-free FBA fulfillment. Prep centers can effectively manage their operations through digitization and automation of their entire inbound, outbound, storage, and prep activities.
Below is a list of steps prep centers can follow to manage their operations efficiently.
1. Staying up-to-date with Amazon’s guidelines
Amazon has ever-evolving guidelines for prepping, packing, labeling, shipping, and more. The guidelines can also slightly or significantly differ depending on different product classes.
An FBA Prep Center must stay up-to-date with any such changes made by Amazon and must also communicate with the merchants. Prep Centers must also ensure that all guideline changes introduced by Amazon are followed in the prep, pack, and ship processes. Failing to do so can result in the return of inventory and higher costs for the Prep Center and the merchant.
A Prep Center should adopt an automation-centric approach to complying with Amazon’s prepping, packing, labeling, and shipping guidelines. This can be accomplished by using fulfillment management software that directly sources guidelines and instructions from Amazon Seller Central.
2. Use of Hardware Devices
FBA Prep Centers can simplify their inbound, storage, and outbound processes and reduce errors by using appropriate hardware devices. It includes handheld scanners, pick-to-light systems, mobile devices, and more.
Right from receiving inventory and putaway, to picking, prepping, packing, labeling, and shipping, using the right scanning devices and the right barcode labels maximizes process efficiency and assists in error reduction.
As mentioned, it is important to have the appropriate barcode label on each unit, box, or pallet. Commonly used barcodes include UPC (Universal Product Code), FNSKU (Fulfillment Network Stock Keeping Unit), MSKU (Merchant Stock Keeping Unit), LPN (License Plate Number), and more.
Moreover, Prep Centers must also deploy dimensioning robots and weighing scales to automate compliance with Amazon’s guidelines around box/pallet weight and dimensions and notify associates about any discrepancies.
3. Software Automation
Prep Center operations involve many activities and tasks that require significant manual effort, are prone to human error, and affect overall efficiency. For that reason, a Prep Center must use the right software to manage FBA fulfillment to automate, optimize and simplify many such tasks.
First, Prep Centers must automate the process of sourcing all inventory details from each merchant’s Amazon Seller Central account. This includes having a real-time sync for inventory data such as product information, relevant barcodes (such as MSKU, ASIN, FNSKU, etc.), and available quantity.
Additionally and more importantly, Prep Centers must be able to automate the generation of shipping plans. Traditionally, creating shipping plans involved manually logging into each merchant’s Amazon Seller Central and generating one. With automation, Prep Centers can automate the generation of shipping plans for multiple merchants based on configurable triggers such as 1. Time 2. Inventory levels 3. Other business rules. This helps Prep Centers save man hours and also have a digital record of all orders and shipping plans.
Prep Centers can also benefit from automating the retrieval of product-specific prep and pack instructions as well as the generation and retrieval of all labels such as FNSKU, box, and shipping.
4. Visibility to the Merchants
FBA Prep Centers must adopt a collaborative approach when rendering prep services to Amazon merchants. The merchants must have complete visibility into the state of their prepping and fulfillment operations.
Merchants must, in real-time, be able to view their orders/shipping plans, inventory levels, performance metrics, and more.
Such real-time visibility is essential in providing an excellent merchant experience and thus attracting and retaining Amazon merchants.
5. Using the Right Prep Center Management Platform
A Prep Center cannot attain the abovementioned capabilities without having the appropriate platform that ties each activity with one another. To maximize operational efficiency, and minimize errors, a Prep Center must aim to automate, digitize, and optimize as many tasks and processes as possible.
Spreadsheet-based processes and manual recordkeeping is insufficient in today’s day and age and having the right Prep Center management software becomes critical for any Prep Center’s success.
The right Prep Center platform helps in the seamless onboarding of merchants, creation of inbound consignments, receiving & putaway, automated generation of shipping plans, optimized picking and packing, weight and dimensions compliance, automated label generation and printing, and creation of shipping plans. In essence, by using the right platform, an FBA Prep Center can digitize and simplify the complete FBA fulfillment lifecycle.
Prep Centers are witnessing a tremendous surge in demand fuelled by the growth of e-commerce and marketplaces. Merchants are adopting marketplaces as a sales channel in hoards and thus require specialized prep services to comply with marketplace guidelines.
Given the high expectations merchants have today, optimization, efficiency, and accuracy must be at the center of every operational and strategic decision taken by Prep Centers. This would help in providing an excellent merchant experience, which, in turn, improves retention and acquisition and drives cost and fulfillment efficiencies.