7 Tips for Cutting Costs With Your FBA Inventory and Shipments

1. Stickerless Commingling

Amazon’s default inventory setting is to commingle the same products together from a manufacturer. That means if you are selling the exact same product as other retailers or sellers, your inventory will be mixed with theirs. Amazon simply scans the UPC or EAC code for each product rather than an FNSKU label.    

Intended to save time, the setting frees sellers from labeling each product before sending it to Amazon. For Amazon, it also saves time processing at a fulfillment center and allows them to more quickly put that inventory into circulation for customer orders. Once processed, Amazon can also pull stock from whichever fulfillment center is closest to the customer, rather than sourcing from a center with a specific seller’s inventory.

To note, not all items listed on Amazon are eligible for stickerless commingled inventory, so those would not be set by default. Amazon holds the right to alter these requirements or eligibility of an item without prior notification.

The requirements for items to qualify for commingling are as follows:

• Items must be in mint condition. No damaged, gently used, or open packages are acceptable.
• Items must qualify as “evergreen items,” meaning there is no expiration limitation on the item.
• Each item must have a clear barcode that can be scanned. An EAN or UPC code must also be present on the item, and this barcode must be applicable only to an individual ASIN.
• Media items (including DVDs, VHS, CDs, software, and video games) do not qualify for this service.

The Issue

Reputable large-scale Amazon sellers and retailers should be wary of commingling. Less reputable sellers send knock-off products to Amazon, which are then pooled with legitimate products. As a result, all sellers end up being vulnerable to accusations of fraud and account suspensions.

For instance, a customer buying a Nike t-shirt through a reputable seller’s store might receive a counterfeit product from the commingled inventory. If that happens, that seller is then on the hook. The original seller that first sent in the counterfeit to Amazon is not. For that reason, many FBA sellers opt to not participate in commingling.  

To avoid this issue, you want to change your default barcode preference settings. This change will apply to all new products. If you have already sold some products as commingled, the barcode change will not affect those. You will either need to change the barcode preference for each of those products individually or create a new FNKSU for that product. Going forward, your products will need to be sent with that FNSKU label so each will be directly linked to your inventory. To note, Amazon will still sell your other commingled inventory, if you do not change the barcode preference.

Commingling is not an issue for private label businesses, since they are selling their own products. It only might become one if a reseller offers your products without your knowledge.   

3. Inventory Placement

Sellers can also opt to send their shipments of inventory to one fulfillment center. Known as Inventory Placement, this setting simplifies the shipping process; however, once Amazon receives a shipment, they will likely send your products to different fulfillment centers. Since your inventory is sent out again, your stock might not be immediately available for purchase. Naturally, you might want to ship inventory earlier than usual to minimize delays. To note, this service comes with an added cost per item that’s in each box. Those costs are the following:

Standard Sized Items

• $0.30 for items that are 1 lb. or less
• $0.40 for items that are 1-2 lb.
• $0.40 for items over 2 lb. plus $0.10/lb. above the first 2 lb.

Oversized Items

• $1.30 for items that are 5 lb. or less
• $1.30 for items over 5 lb. plus $0.20/lb. above the first 5 lb.

There are also a few product exceptions for Inventory Placement. Items in the following categories may be directed to a different receive center or fulfillment center even if you use the Inventory Placement Service:

• Apparel
• Jewelry
• Shoes
• Media
• Commingled inventory
• Oversize items
• Items with Amazon prep required
• Items with Amazon labeling required
• Hazardous materials

To note, Amazon reevaluates where to send each new shipment and will change the destination. As a result, sellers cannot reliably predict the cost of replenishing inventory if using this option. To truly take advantage of Inventory Placement, you will need to conduct a cost-benefit analysis and figure out which setting saves you the most money for each shipment. In fact, many sellers do.  

5. FBA Prep Services

FBA prep services are another avenue of possible cost savings. You may want to investigate whether it makes sense to have a third-party company receive your inventory, prepare it for FBA, and ship it to Amazon. Amazon also offers this service, but you will still need to ship your products to them. In either case, you are charged a fee per item to properly package inventory for FBA fulfillment.  

These services can be cost-effective in a variety of ways. For private label sellers, inventory normally arrives from China at a port of entry in the United States. By finding a prep service nearby a port, you can possibly reduce trucking costs to move your inventory and leverage their personnel to quality assure your products. To note, if they do not offer quality assurance, you run the huge risk of never actually seeing the inventory that you are sending to Amazon.

In a similar fashion, retailers or sellers can arrange for their inventory to be sent from a brand’s distribution warehouse to a nearby FBA prep service. Similarly, this decision could very well save significant time and money on shipping.

Some third-party FBA prep services also allow sellers to store inventory at their warehouse. Since many resellers do not have their own warehouses, this options can remove the clutter and complication of receiving inventory.

No matter the general benefits, sellers must stay ever-attuned to whether these services cost-effectively add to the bottom line or not. 

Conclusion

Through these seven tips, FBA sellers actually have shipping and inventory options that can save money and elevate profitability. As Amazon expands its distribution network, you will want to efficiently maximize these options so that your business is not entirely dependent on selling more to grow. You will also want to stay ahead of any new policies, third-party options, and trends in your business so that you can adapt in an ever-changing market.