There are more than 500 FBA prep services providers globally (of which 80% are present in the US alone) catering to over 5 million sellers that sell on Amazon. The prep services are pivotal drivers in e-commerce operations and have been a significant contributor to the growth story of marketplace selling. The providers assist the sellers with specialized services, including inbound logistics, storage, FBA prep, outbound logistics, and returns.
In this guide, journey with us as we unpack the evolving landscape of marketplace selling, the indispensable role of prep services providers, market opportunities, hurdles, and the tech-driven solutions to navigate them.
There are more than 500 FBA prep services providers globally (of which 80% are present in the US alone) catering to over 5 million sellers that sell on Amazon.
E-commerce is estimated to grow at about 10% each year (CAGR) and reach an astounding $8 trillion in total sales value by 2027.
Marketplaces have emerged as the most important enabler of e-commerce growth. Amazon, Walmart, and other marketplaces enabled over 67% of all online sales in 2022.
Amazon has grown to become the largest player in e-commerce marketplaces. In 2022, Amazon facilitated over 600 billion in sales (GMV) globally.
There are currently 9.5 million active sellers on Amazon of which 94% of them partake in the Amazon FBA program, either for their product catalog or a part of it.
The added complexity in Amazon FBA has led to the rise of FBA prep services providers, making them an indispensable part of marketplace selling.
FBA prep services providers provide a range of essential services to the sellers such as short term storage, FBA fulfillment, compliance with Amazon's guidelines, and much more.
The search term "FBA Prep Center" has seen a 105% increase in search volume, signaling a growing interest and importance of the specialized services.
With the help of the right software technology, FBA prep services providers can scale their fulfillment throughput and business, improve the compliance with Amazon's guidelines, seamlessly manage a range of clients, and provide an improved experience to the clients.
Prep service providers are third-party service providers that help sellers adhere to Amazon's rules and guarantee effective, error-free, and efficient FBA Fulfillment. They are recognized by Amazon under their Service Provider Network (SPN).
Fulfillment by Amazon (FBA) is a service that allows businesses to outsource order fulfillment to Amazon. Businesses send products to Amazon fulfillment centers and when a customer makes a purchase, they pick, pack, and ship the order. They can also provide customer service and process returns for those orders.
Prep services providers face numerous challenges in client servicing and FBA prep and fulfillment. The challenges include 1. Multi-client complexity 2. Continuous compliance with Amazon's changes 3. Manual and spreadsheet-based operations 4. Limited visibility to the clients, and more.
The right technology is pivotal in improving FBA prep and fulfillment. Firstly, it helps automate many redundant tasks and enhances the productivity of the associates. Additionally, by integrating with the Amazon Seller Central, it ensures compliance with Amazon's latest prepping, packing, labeling, and shipping requirements. Lastly, it enhances scalability of prep services providers by enhancing their fulfillment throughput and enabling them to onboard additional clients.
Download the guide