Amazon Inventory Placement Service - Is it worth the Fees?

In the ever-evolving e-commerce landscape, efficient inventory management can be a game changer.  While Amazon provides sellers with an extensive suite of tools, including FBA, sellers can still face unique inventory hurdles that prevent them from fully actualizing their business objectives. Things like optimizing shipping costs, fulfilling customers' delivery expectations and managing high demand, especially in peak seasons like holiday sales. 

These unique inventory hurdles can mar business operations, however, Amazon Inventory Placement Service may offer a solution to these inventory related challenges. 

Amazon Inventory Placement Service: What is It?

Amazon’s Inventory Placement Service allows Amazon sellers to send their inventory to a single fulfillment center.  This service can be preferable as generally Amazon FBA sellers have to send split shipments separately to multiple fulfillment centers across different locations - which can often result in increased costs and time delays. 

Is Amazon Inventory Placement Service Free?

Although Amazon’s Inventory Placement Service offers convenience, it is not free. When sellers sign up for this service via their seller account, they are charged a per-unit fee based on the weight of each SKU (Stock Keeping Unit). 

The table below provides the current fee breakdown for using Amazon’s Inventory Placement service: 

Is Amazon Inventory Placement Service Right For You?

Before you opt in for Amazon’s Inventory Placement Service, it's important to put things in perspective to know whether it is cost-effective for your business. 

Let’s say you want to ship 500 units of your standard size inventory, each weighing 1 to 2 lb. Amazon charges $0.40 per item in this category, so you’ll end up incurring Inventory Placement service fees of up to $200. 

However, if this $200 in additional fees is more cost effective than the additional freight charges to get your 500 items split across multiple fulfillment centres - then it is an option to consider.

So do your sums, Amazon Inventory Placement Service can be a brilliant solution for sellers who want to streamline their inventory management and are happy to pay a bit extra for the service.  And before you sign up, ensure you do your due diligence, understand how it works, the costs and its implications for your business.