Amazon-FBA-Prep-service

4 Reasons Why Amazon FBA Prep Service Better Done in China?

#1  Cheaper labor cost


china-us-labor-cost-FBA-prep-service
Labor cost for FBA prep service in China and U.S. (Source: https://www.aei.org)

We can see from the chart that US labor cost is 4 times of China. Although, China experienced a 20+% labor cost increase over last 20 years.

For a full 40″ container of caster wheels and yoga mats mixed like this:

9: Container loaded with wheels & yoga mats
40 feet full  container loaded with wheels & yoga mats

It can take 849 hrs total to repack and bundle. (*click to see details of how caster wheels and yoga mats are repacked, bundled, consolidated, shipped)

total-time-required-for-repack-and-bundling-40-feet-full-container-of-wheels-and-yoga-mats
total time required for repack and bundling 40 feet full container of wheels and yoga mats

Amazon seller can save 849 * 15 = 12,735 USD labor cost if this collect, repack / bundle, label, consolidate, ship are done in China.

#2  Easier return / replace / rework


In case some defective products are found, they can be sent back to the factory for re-work. Or simply for a rebate on the order. Payment can be done for the good pieces only. This a much better setup than finding out about quality issues overseas. Return is no possible.

Defective flags (spot) picked out
Defective flags (spot) picked out

As the factory gets the rejects, they learn about what is acceptable and what is not. It’s good for training supplier too.

defective screws found during inspection, major issue (40% defects)
defective screws found during inspection, major issue (40% defects)

#3  Lower shipping cost


Instead of shipping several LCL (less than container load) shipments, Amazon sellers can have a China prep center receive all their small shipments, then consolidate and ship out by FCL (full container loads).

It’s cheap and easy to ship inside China. Take Yiwu for example:

goods delivery to Yiwu
Almost all goods from China can delivery to Yiwu within 3 days.

This can save lots of logistics cost (freight, docs, handling, customs inspections…) and often offers safer protection for fragile items.

#4  Lower tax & duty


Amazon sellers don’t have to ship defects all the way from China to overseas, pay all duty and tax for defects. What a waste!

06: fall-apart-defects picked out
defects nail art brushes were picked out
defective-slingshots-picked-out-in-China-prep-center
Defective slingshots were picked out in China prep center during inspection and repack

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