This was one of my biggest problems with my first couple of shipments to Amazon. My production was almost done in China and I would start creating the FBA shipment in Amazon Seller Central, so I could arrange a forwarder. However, once I created the shipment, Amazon split my shipment into multiple shipments. I spoke with my forwarder and he told me my shipping cost would double because of this. Because they had to deliver the products to 3 different warehouses all over the country.
Why does Amazon split shipments?
In order to offer fast delivery to their customers, Amazon has to spread your inventory over the whole country. They have warehouses in almost every state. If you go to your inventory reports you can actually see in which warehouses your stock is located. Of course, they rather want the seller to ship their products to all the different warehouses over the country, so that is why FBA splits the shipment.
How to avoid split shipments in FBA?
You can avoid split shipment by using: Inventory Placement Service! This is the solution you are looking for! However, you have to pay for it. Before you create a shipment in Amazon Seller Central you go to your settings tab, click on Fulfilment by Amazon. Scroll down and find the Inbound Settings tab. Here you find the Inventory Placement Option.
If you select Inventory Placement Service Amazon will send all your inventory to 1 FC. The only downsides of this that they will charge you a fee per unit for this, depending on the size of the product:
|Standard-Size per unit (includes all Standard-Size product size tiers)|
|1 lb. or less||$0.30|
|1 – 2 lb.||$0.40|
|Over 2 lb.||$0.40 + 0.10/lb. above the first 2 lb.|
|Oversize per unit (includes all Oversize product size tiers)|
|5 lb. or less||$1.30|
|Over 5 lb.||$1.30 + $0.20/lb. above the first 5 lb.|
Is Inventory Placement Service worth it?
That is up to you to calculate! You can calculate how much extra you would have to pay with split shipments, versus how much the Inventory Placement Service would cost.
To give you an example: Let’s say we are shipping 2000 1.5 lb standard size units from China to Amazon.
I would request 2 type of quotes from my forwarder:
- Quote A: with Inventory Placement Service: All 2000 products will be delivered to 1 warehouse.
- Quote B: without Inventory Placement Service: All 2000 products will be split into multiple shipments, to be delivered to multiple warehouses.
He comes back with the following quotes:
- Quote A: $1500
- Quote B: $2500
You would think it makes sense to go with Quote A as this seems cheaper. However, we still have to add the cost of the Inventory Placement Service:
- Total cost quote A: $1500 + $800 ( 2000 * 0,4 ) = $2300
- Total cost quote B: $2500
In this case it would make sense to use Inventory Placement Service as it would save you $200.
Who do you use for a forwarder and how does that process work?