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How To Save Money On Amazon FBA Shipment Factory Shipments VS using 3rd party

Logistics for your shipping can be stressful if not done right. This can be especially true for FBA sellers shipping from China because they have the added layer of navigating overseas shipments, customs and tariffs.

We’re going to show you how to create a shipping plan and layout every option available. We want to give you the advantages and disadvantages of each.

FBA Shipping to Amazon requires 3 things:

  • An Amazon Seller Central Account
  • Your products packaged ready for shipment (We go over this below)
  • Your listing set up and set up to be fulfilled by Amazon

FBA Shipping costs from the manufacturer to Amazon FBA vary based on 3 factors:

  • FBA fees
  • Supplier and freight forwarder relationship
  • Size and Weight of your product

However, this method cuts out all the middlemen and is very fast but the cost of air shipment is significantly more expensive than sea shipment.

To lower costs it’s necessary to pay Amazon to ship all items to a single location. (which is an additional $0.30 per unit…quite a hit to the margins).

You can add a little control by including inspection on the China side (for an added cost of course). But there is still no one making sure the boxes weren’t damaged in transit. However, You won’t be required to do any labeling or inspecting yourself, which saves you time. And time is money.

How to save money on Amazon FBA shipment factory

How to Properly Set Up Air to FBA Shipments

Shipping “air express” directly to FBA is a simpler way to handle your FBA shipping.

First, you should choose to set up “inventory placement”. Sending two or three boxes separately to different facilities will likely be more expensive than just paying $0.30 a unit.

Go to “Settings” at the top right of Seller Central. Then click “Fulfillment by Amazon” and then go to “Inbound Settings.”

“Distributed Inventory” is the default setting, but if you edit you can change to “Inventory Placement” which will make Amazon accept all the products to only one facility.

Next, you’ll need to create the shipment in Amazon.

Quickly Prep & Ship Products to Amazon FBA

Now you need to select how your products are getting to Amazon.

Small parcel delivery and if you’re sending the products from your house you would be using your own shipping services. It can be FedEx, DHL, UPS or even the US post office, whatever you like.

If a third party is sending your shipments ask them who they’re using to send your products in and they will give you all of that information.

Use your factory’s shipping account. Most factories in China have a DHL account. Because of how much they ship, they can often offer you a pretty good deal. Also, I would get your own quote as well, to make sure your factory is actually giving you a discount.

How to save money on Amazon FBA shipment factory

Make sure all of shipping information is correct and ask your third party freight forwarder how much 1 box weights and what the dimensions are.

Otherwise, you can weigh the box in your house by stepping on a scale.

How to save money on Amazon FBA shipment factory

Print your box shipping labels.

How to save money on Amazon FBA shipment factory

You need to send the file of these labels to whoever is going to be doing the shipping for you if it’s not yourself.

How to save money on Amazon FBA shipment factory

Once you send your products into Amazon you will get a tracking number from your shipping company. If you sent 10 boxes then you should get 10 tracking numbers. Place the tracking numbers in your Amazon seller dashboard.

(Safest Shipping Method) Air Shipping: Manufacturer to Home

How to save money on Amazon FBA shipment factory

You get the advantage of faster air shipping. And, add a layer of protection by giving you the opportunity to personally inspect the boxes/products.

Cost is, of course, higher due to air shipping. And you may still want an inspection on the overseas side of things.

Quality control is what this strategy is all about. You are personally seeing to it that everything is done properly so that your shipment is not rejected by FBA.

You have to store the products at your location, inspect them yourself and then label them and arrange pickup/dropoff.

(Most Expensive Shipping Method) Air Shipping: Manufacturer to Prep Center

How to save money on Amazon FBA shipment factory

You might be wondering:
What’s the safest way to get products from overseas while making sure everything is packaged and labeled to perfect FBA standards?

The solution: Air shipping to a Prep Center.

This is a fast shipping method and prep centers, depending on their workload, can make short work of your prep requirements.

The major downside to using a prep center is the cost.

For some reason, FBA inspection centers are notoriously expensive for two reasons:

  1. Labor rates being rather high in the US.
  2. Due to the popularity of Amazon FBA, many inspection centers price according to the market.

(Cheapest Shipping Method) Sea Shipping: Manufacturer to Amazon FBA

How to save money on Amazon FBA shipment factory

Sea shipping:  Shipping from China to Amazon FBA via sea is the slowest method.

Slow as it may be, sea shipping is also the most affordable way to ship inventory.

Best Incoterm to Use? (LCL, FCL)

LCL (less than container load) sea shipments can be a few hundred bucks, reducing costs to no more than a dollar or two per item (sometimes even just a few cents).

There is the added cost of using a freight forwarder though, as they are necessary for helping obtain a customs broker and for consolidating LCL shipments or breaking apart shipments for distributed inventory.

As with air shipments, sea shipments sent directly to FBA reduce your level of quality control. Therefore, reduces safety in ensuring your products are accepted by the warehouse.

Benefits of sea shipping: 

  • Improves on the fact air shipments can cost anywhere from $5 to $11 per kilogram (or more).
  • Only Adds a few dollars PER UNIT to your cost of products.
  • Cuts out middlemen.
  • Low price of factory-side inspections.

No physical effort will be required on your part. The products are sent directly from factory to FBA warehouse. Both of which will likely be very far away from you.

Cut Out the Middlemen – Teach Your Supplier to Apply FNSKU Labels

Notice that one of the steps on the seller checklist was to download the FNSKU labels?

Have your supplier apply the labels FOR YOU. Amazon charges you an additional $0.20 per unit, slowly chipping away at your margins. Typically your supplier will do this for free,

but sometimes they’ll charge a nominal fee. (a couple cents per unit extra).

Amazon prefers a sticker
, but printing it on the box is okay so long as the background is white. That means, you should NOT be paying an inspection center to apply your labels.

Shipping from China to FBA Direct

  • They place labels on the boxes
  • They’ll shrink-wrap and label the pallets
  • Anything else a prep center would typically do

Setting things up this way, shipments go straight to FBA, or are ready for Amazon partnered carrier as soon as it hits a warehouse distribution center or staging warehouse.

(Most Efficient Shipping Method) Sea shipping: Manufacture to Distribution Warehouse

How to save money on Amazon FBA shipment factory

Unlike FBA inspection centers, distribution centers don’t squeeze every dime from unwitting yet hopeful Amazon sellers.

They make their money warehousing and distributing products, often times for very large companies.

Now:

Any labor will still be pricey.  So use these staging warehouses to have Amazon partnered carriers come and pick up the products.

Distribution centers handle:

  • Freight forwarding
  • Duty and Customs
  • Palletize inventory when shipping less than a container load

You reduce your shipment travel time when your distribution center is located closer to your factory.

Benefits of Choosing the Right Distribution Center

For example, if you sell on Amazon in the US and are shipping from China, having a distribution center in California keeps your products on the water for about 16 days, as opposed to 30 to 45 days going to the East Coast.

  • Shipping by sea is affordable extra costs of freight forwarders is often made up for in speed of delivery and quality control.
  • Distribution centers help with quality control.
  • You can ask them to open a box and send you a picture to ensure things look good inside the cartons.
  • The center will be either palletizing or shipping/floor loading your products at FBA
  • Damaged cartons will be rejected by FBA and held at the distribution center to be returned.
  • Distribution centers handle your sea shipment and make the process entirely hands off.
  • You get peace of mind knowing things are being labeled, handled and organized properly.

How to Set Up Sea to Distribution Center Shipment

Use sea shipping for large orders not possible via air.

Over the ocean, you’ll be shipping either LCL (Less Than Container Load) or FCL (Full Container Load) in containers that are either 20ft, 40ft or 40ft HQ.

Advantages of shipping to a distribution center:

  • You have the ability to create a shipment using Amazon’s Partnered Carriers.
  • They discount the service.
  • You can use distributed inventory, since it will be Amazon’s carriers who pick up the products.
  • Organize your product variations the way you want and have them palletized separately.
  • A final set of eyes on your products to ensure shipping damage didn’t occur before everything is sent to FBA.

Pallet Requirements:

You must decide whether you wish to have your products palletized by your factory or by the distribution center. There are pros and cons to both methods.

Pros:

  • Having your products palletized by your factory will save on labor.

Cons:

  • It decreases the total capacity of your container (pallets take up room)
  • The pallet itself could be a concern. Amazon FBA clearly states pallets MUST be wooden.
  • You will be required to take extra steps to ensure your factory has vetted one.
  • If wooden pallets aren’t properly treated and fumigated, they could arrive in your FBA country either broken or infested.

Working with the distribution center to palletize your products will cost you more, but the pallets will meet all standards and regulations.

Whoever you decide to have palletize, they will also need to stackshrink wrap and label the pallets according to Amazon’s guidelines. If the facility has no experience sending pallets to Amazon, you will need to supply them with the “FBA – Shipping Inventory to Amazon” handbook.

A couple of quick notes about pallets, however, are:

  • Must be standard 40” x 48” wooden.
  • Cannot exceed 1500lbs
  • Cannot exceed 72” in height (unless it’s a single oversized unit).
  • Must be shrink-wrapped.
  • Labels go on each of the 4 sides

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