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Amazon inventory placement service

Optimize Inbound Shipping Costs with Amazon Inventory Placement Service (Hack included) (2024)

If you’re running a business that utilizes Fulfillment by Amazon (FBA) shipments, you understand the importance of efficient and cost-effective inbound shipping. Amazon Inventory Placement is a service that can help you streamline this process, optimize your inventory management, and ultimately reduce your fulfillment costs.

Key Takeaways:

  • Amazon Inventory Placement can help you optimize inbound shipping costs for your FBA shipments.
  • This service streamlines the shipment process by allowing you to send your inventory to a single Amazon fulfillment center.
  • The benefits include potential cost savings and efficient delivery to customers.
  • However, there are also potential drawbacks to consider, such as limited control over inventory distribution and additional service fees.
  • Ultimately, by evaluating the pros and cons, you can decide if Amazon Inventory Placement is worth using for your business.

What is Amazon Inventory Placement Service?

If you’re an Amazon seller using Fulfillment by Amazon (FBA), you may be familiar with the logistical challenges of managing inventory across multiple fulfillment centers. This is where Amazon Inventory Placement Service comes in.

Simply put, Amazon Inventory Placement Service allows you to send your inventory to a single fulfillment center, rather than distributing it across multiple centers. This service streamlines the shipment process and ensures efficient delivery to customers.

When you use Amazon Inventory Placement Service, your inventory is shipped to a designated fulfillment center, where it is then distributed to other centers as needed. This simplifies the logistics of managing your inventory, reducing the time and cost associated with fulfillment.

How is Using Inventory Placement Service Different from Distributed Inventory Placement?

Many sellers do not use the inventory placement service fees associated to the program. So what is the alternative? Distributed Inventory Placement is where your shipping plan will send your inventory to multiple warehouses to get products closer to the buyers. By using distributed inventory program, you can skip the per item fee. You will trade off higher amazon FBA inventory inbound shipping costs versus paying the fba inventory placement service fee per item. Shipping to multiple warehouses, allows Amazon to receive products faster and ship inventory to your customers faster.  

The Benefits of Amazon Inventory Placement Service for FBA Sellers

  • Reduced fulfillment costs: Because your inventory is concentrated in a single location, you can take advantage of lower shipping rates and reduce your per-unit fulfillment cost.
  • Greater efficiency: By using a single fulfillment center, you can streamline your operations and reduce the time and cost associated with inventory management.
  • Improved inventory control: With all your inventory in one place, you can better track and manage your inventory levels, reducing the risk of stockouts by getting products into the Amazon receiving or fulfullment center faster.

Overall, Amazon Inventory Placement Service is a valuable tool for FBA sellers looking to optimize their fulfillment operations and control costs. By using this service, you can improve your inventory management and streamline your shipping processes.

What does it cost to use Amazon FBA Inventory Placement? 

Each year it seems like the prices went up. Just a couple of years ago the standard fee was $0.15 per unit to use the service. Prices continue to go up and in 2024 they are going up again. The price is no longer set by the inventory size. It will now be set by size and weight. For 2024 (starting March 1, 2024) the fees will range from $0.21 to $0.68 per item for standard size products. Oversize products will range from $2.16 to $6.00 per-item. 

Pros and Cons of Amazon Inventory Placement Service

Amazon Inventory Placement Service offers several benefits, but it’s not without its drawbacks. Let’s take a closer look at the pros and cons of using this service for your FBA inventory.

Pros

One of the primary advantages of Amazon Inventory Placement Service is the potential cost savings. By sending your inventory to a single fulfillment center, you can reduce shipping costs and take advantage of the per-unit fee charged by Amazon for this service. This is especially beneficial if you have small inventory volumes or frequently send items that require additional preparation.

Another advantage of using this service is the streamlined shipment process. With all your inventory in one place, Amazon can efficiently manage the fulfillment of your orders and ensure prompt delivery to customers. This can help improve customer satisfaction and boost your business’s reputation.

Cons

One of the main drawbacks of Amazon Inventory Placement Service is the limited control over inventory distribution. When you send your inventory to a single fulfillment center, you may not be able to control which products are in which locations, potentially leading to inventory management challenges.

Another potential issue is the service fee charged by Amazon for Inventory Placement. While this fee can be offset by the potential cost savings, it’s important to factor in this additional cost when evaluating whether this service makes sense for your business.

Is Amazon Inventory Placement Service Worth It?

Amazon Inventory Placement Service can be a valuable tool for managing your inventory and optimizing your inbound shipping costs. However, it’s important to evaluate whether the service makes sense for your specific business needs. Here are some scenarios where utilizing Amazon Inventory Placement Service may be worth it:

  • Smaller inventory volumes: If you have a small volume of inventory to manage, utilizing this service can help streamline the process and ensure efficient delivery to customers. These shipments will likely be split to multiple warehouses.
  • Items requiring additional preparation: If Amazon requires items that need additional preparation, such as labeling or prep services, using this service can help expedite the process and ensure compliance.

While there are potential cost savings that come with this inventory management service, it’s important to consider the charges associated with Amazon Inventory Placement. Amazon charges a per-unit fee for using this service, so it may not make sense for businesses with smaller volumes of inventory or those with tighter profit margins.

Another consideration is the limited control over inventory distribution. When using Amazon Inventory Placement, you will not have control over which fulfillment center your inventory is sent to. This lack of control can sometimes lead to inventory management challenges, such as scattered inventory or difficulty in locating and managing inventory.

Overall, whether Amazon Inventory Placement Service is worth it for your business depends on several factors. Evaluating your business’s inventory management needs and comparing the potential cost savings to the service charges is key in deciding whether to use this service for your FBA shipments.

Our Amazon Inventory Placement Service Guide:

Stereotypically we do not recommend using the inventory placement service due to the fees Amazon will charge. Shipping inventory to one warehouse is generally not worth the financial costs. Speed of getting your inventory to a fulfillment center outweighs the costs of the shipping. While shipping your inventory to one warehouse seems like a blessing, with the increasing fees, it has become hard to overcome the inventory placement service charges. Small oversize products may really benefit from the service due to the size and splitting multiple LTL (pallet) shipments can greatly increase inbound shipping costs. 

How can Send Inventory to Just One Warehouse Without Paying a Fee? (Hack)

Amazon stereotypically will consolidate inventory once you are sending a minimum of 18 units of a single ASIN. By increasing the quantity of units, you can reduce your chances of split shipments. Larger shipments with multiple ASINs in higher volume will also be less likely to split. We also recommend if you are using software like Fusion List & Ship or Fusion 2D Prep, you can try resubmitting the shipment at different times of the day. We find early morning shipments to be sent to one Amazon receiving or fulfillment center. 

Conclusion

Overall, utilizing Amazon Inventory Placement Service can be an effective way to optimize your inbound shipping costs and ensure efficient FBA shipments. By centralizing your inventory in a single fulfillment center, you can reduce shipping costs and potentially save money on the per-unit fee charged by Amazon for this service.

However, there are also potential drawbacks to consider, such as limited control over inventory distribution and the added cost of the service fee. It’s important to evaluate your business goals and needs to determine whether using this inventory management service makes the most sense for your operations.

In conclusion, Amazon Inventory Placement Service may be beneficial for businesses with larger inventory volumes or when specific items require additional preparation. By considering the pros and cons discussed in this article, you can make an informed decision that aligns with your business goals and needs.

FAQ

What is Amazon Inventory Placement Service?

Amazon Inventory Placement Service is a program that allows sellers to send their inventory to a single Amazon fulfillment center. This helps streamline the shipment process and ensures efficient delivery to customers. By using this service, sellers can consolidate their inventory and reduce shipping costs.

What are the pros and cons of Amazon Inventory Placement Service?

The pros of using Amazon Inventory Placement Service include potential cost savings on shipping fees, simplified inventory management, and faster order processing. However, there are cons as well, such as limited control over inventory distribution and the per-unit fee charged by Amazon for using this service.

Is Amazon Inventory Placement Service worth it?

Whether Amazon Inventory Placement Service is worth it depends on your specific business needs. If you have larger inventory volumes or need to comply with Amazon’s requirements for certain items, this service can be beneficial. However, there are potential drawbacks to consider, such as the additional charges and inventory management challenges that may arise.

How do I decide if I should use Amazon Inventory Placement Service?

To determine whether Amazon Inventory Placement Service is right for your business, consider factors such as your inventory management capabilities, the cost savings potential, and the level of control you want over inventory distribution. Evaluate the pros and cons, and weigh them against your specific requirements and goals.

Can I change my inventory placement option after using Amazon Inventory Placement Service?

Yes, you can change your inventory placement option even after using Amazon Inventory Placement Service. However, keep in mind that there may be additional charges or limitations associated with modifying your chosen inventory placement method.

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