How to use Amazon FBA’s Inventory Placement Service

Author:

Amazon’s Inventory Placement Service (IPS) is a feature within Fulfillment by Amazon (FBA) that allows sellers to send all their inventory to a single fulfillment center, rather than splitting it across multiple fulfillment centers. This can be beneficial in reducing shipping complexity and costs, as well as streamlining the management of shipments to Amazon.

Here’s a step-by-step guide on how to use Amazon FBA’s Inventory Placement Service:

Step 1: Enable the Inventory Placement Service

Before using the Inventory Placement Service, you need to enable it in your Amazon Seller Central account.

  1. Log in to Amazon Seller Central:
  2. Navigate to Settings:
    • From the main dashboard, click on “Settings” in the top right corner of the page.
  3. Choose Fulfillment by Amazon Settings:
    • Under the “Settings” menu, select “Fulfillment by Amazon”.
  4. Enable Inventory Placement Service:
    • In the FBA Settings page, you will see an option for Inventory Placement. Click on Edit and enable the service.
    • You may need to accept Amazon’s terms and conditions for the service.

Once enabled, your products will be eligible to use Inventory Placement when creating shipment plans.

Step 2: Create a Shipment Plan with Inventory Placement Service

Now that the service is enabled, follow these steps to create a shipment plan using the Inventory Placement Service.

  1. Log in to Seller Central:
    • Navigate to “Manage FBA Shipments” by selecting “Inventory” in the main menu and choosing “Manage FBA Shipments” under the “Shipping Queue” option.
  2. Select or Add Products:
    • Select the products you want to ship to Amazon’s fulfillment centers. If you haven’t already added your products to your inventory, you can add them now.
  3. Create a New Shipment:
    • Click on “Create a shipment plan” to start the shipment process.
  4. Choose Shipment Options:
    • During the shipment process, you will be prompted to choose your “Shipping Method” and “Shipment Mode”. Here, select Inventory Placement as the method.
    • This ensures that Amazon will direct all your products to one fulfillment center (instead of distributing them across multiple centers).
    • Keep in mind that the Inventory Placement Service may incur additional fees, depending on your specific needs and shipment details. Review the costs carefully.
  5. Review Shipment Destination:
    • With Inventory Placement enabled, you’ll receive a single destination fulfillment center address for all your products.
    • Amazon will assign a specific fulfillment center based on the service’s algorithms, but you won’t have to worry about the logistics of distributing inventory to multiple centers.
  6. Confirm the Shipment:
    • Once the destination is confirmed, review all the details, including the quantity of units you’re sending, packaging requirements, and estimated fees.
    • After confirming the shipment details, click “Approve Shipment”.

Step 3: Print Shipping Labels and Prepare Inventory

After confirming your shipment plan, you’ll need to prepare your products for shipment and print the necessary shipping labels.

  1. Print Shipment Labels:
    • You can download and print FBA shipment labels for the destination fulfillment center.
    • Make sure to label each product and box according to Amazon’s requirements. This will include FNSKU labels (barcode labels for individual units) and shipping labels (for boxes).
  2. Pack Your Products:
    • Pack your products carefully and securely according to Amazon’s guidelines.
    • Even though all inventory is directed to one fulfillment center, make sure to follow proper packing standards. Label each box correctly and ensure the contents are listed properly in your shipment plan.

Step 4: Ship Your Inventory

Once everything is packed and labeled, it’s time to ship your inventory to the Amazon fulfillment center.

  1. Ship to the Designated Fulfillment Center:
    • Using the provided shipping labels, send your inventory to the designated fulfillment center.
    • You can choose any carrier to ship the goods, but make sure you enter tracking information in the shipment plan for proper tracking.
  2. Track Shipment Progress:
    • You can track the status of your shipment through Seller Central. Once the inventory arrives at Amazon’s fulfillment center, it will be processed and added to your FBA inventory.

Step 5: Monitor Inventory in Amazon’s Warehouse

Once your products have been received and processed by the fulfillment center, Amazon will begin fulfilling orders from your inventory.

  1. Check Inventory Status:
    • Go to “Manage Inventory” in your Seller Central account to view your stock levels.
  2. Update Product Listings:
    • Once your inventory is live, you can monitor sales and make any necessary changes to your listings to optimize performance.

Key Benefits of Using Inventory Placement Service

  1. Reduced Shipping Complexity: Instead of sending your products to multiple fulfillment centers across the country, you send everything to one center, which simplifies logistics.
  2. Cost Efficiency: By consolidating shipments, you can potentially reduce shipping and freight costs.
  3. Simplified Inventory Management: Managing your stock in one location can make it easier to track and replenish inventory, compared to having inventory spread across multiple centers.
  4. Better Control: It gives you more control over where your inventory goes, which is useful for sellers who want to reduce inventory dispersion and manage stock more efficiently.

Key Considerations and Costs

  1. Additional Fees: Inventory Placement is a paid service. Amazon charges a fee for using IPS, which is in addition to the regular FBA fees. You’ll be charged for the service based on the size and weight of your products.
  2. Limited Availability: IPS might not be available in all regions or for all products. Some restrictions apply based on the category of products you sell.
  3. Delays: Although you are shipping everything to one center, this might cause delays in the processing of your inventory if there are issues with receiving or sorting.

Conclusion

Using Amazon’s Inventory Placement Service can significantly streamline the process of sending inventory to Amazon’s FBA warehouses by reducing the complexity of shipping to multiple fulfillment centers. By consolidating your shipments, you can simplify logistics, reduce shipping costs, and gain better control over your inventory. However, be mindful of the additional fees and make sure you’re prepared for the costs associated with the service. When used effectively, Inventory Placement can be a great tool for Amazon sellers looking to optimize their FBA operations.

Categories: Digital Marketing