The Hidden Cost of Amazon Placement Fees: Maximizing Profits with Cost-Effective Prep Services - StockandShip.Com
                     THE HIDDEN COST OF By
AMAZON PLACEMENT FEES Stock and Ship
THE HIDDEN COST OF AMAZON 
PLACEMENT FEES
Selling on Amazon FBA offers huge opportunities but comes with hidden 
costs. Placement fees and labeling charges can silently reduce your profit 
margins. This presentation reveals these hidden costs and shows how prep 
services like Stock and Ship can save you money.
KEY POINTS OF HIDDEN COST OF 
AMAZON PLACEMENT FEES
1. Amazon FBA helps sellers reach millions of buyers
2. Convenience & scalability come with hidden costs
3. Placement fees are often overlooked but significant
4. Sellers can unknowingly lose thousands annually
5. Purpose: Expose these fees and offer solutions
WHAT ARE AMAZON PLACEMENT FEES?
Also called Inbound Placement Service Fee. Charged when Amazon splits 
shipments across multiple FCs. Ensures faster delivery & efficient 
warehouse operations.
Two options:
Distributed Inventory Placement (default, fees apply)
Inventory Placement Service (ship to one FC, per-unit fee)
Looks small but adds up quickly
HIDDEN COSTS BEHIND PLACEMENT 
FEES
Range: $0.27 to $1.58 per unit
Example: 1,000 units × $0.40 = $400 lost
Large & heavy items cost even more
Hidden risks:
Complex logistics with multiple shipments
Inventory tracking becomes harder
Cash flow issues with unexpected charges
Reduced profitability in low-margin products
HOW PREP SERVICES HELP?
1. Prep centers reduce placement & labeling costs
2. Services include:
 FNSKU labeling
 Polybagging & bundling
 Inspection & compliance with Amazon FBA rules
3. Lower cost compared to Amazon’s own services
4. Outsourcing = more time to focus on growth & marketing
STOCK AND SHIP - COMPETITIVE 
PRICING
1. Transparent, scalable pricing model
2. Online Arbitrage Prep:
$1.75 per unit (0–500 units)
$1.15 per unit (5,000+ units)
3. Wholesale Prep:
$1.30 per unit (501–1,000 units)
$0.95 per unit (5,000+ units)
4. Includes: Receiving, inspection, FNSKU labeling, polybagging, 14 days 
free storage
5. Much cheaper than Amazon services
THE LABELING FACTOR
1. Amazon labeling fees: $0.55 per unit
2. Example: 1,000 units → $550 lost
3. Prep centers charge $0.20–$0.30 per unit
4. Stock and Ship includes labeling in most packages
5. Benefits:
Ensure compliance
Save significant costs
Avoid Amazon rejection or re-routing
BEST PRACTICES TO MINIMIZE 
PLACEMENT FEES
1. Bundle & standardize shipments for fewer FC assignments
2. Use tax-free prep centers (Delaware, Oregon)
3. Work with cost-effective prep services like Stock and Ship
4. Stay updated on Amazon inventory policies
5. Compare costs: Inventory Placement Service vs distributed shipments
6. Plan ahead to avoid penalties
CASE STUDY – KITCHEN GADGETS 
SELLER
1. Business ships 2,000 units/month
2. Amazon Placement Fees:
$0.40 per unit = $800/month = $9,600/year
3. With Stock and Ship:
Prep = $2,700
Savings = $1,900 (fees + labeling)
Net prep cost = $800 effective
4. Annual savings = $9,600 + smoother operations
5. Result: Reduced stress, higher efficiency, better profit margins
KEY TAKEAWAYS
1. Amazon placement fees drain profits quietly
2. Fees + labeling charges accumulate to thousands annually
3. Prep services are cheaper, compliant & scalable
4. Real cost reduction in logistics & labeling
5. Smarter logistics = healthier cash flow & better margins
FINAL THOUGHTS
1. Amazon FBA is powerful but has hidden costs
2. Placement & labeling fees cut into earnings
3. Prep centers like Stock and Ship offer smarter solutions
4. Advantages:
Lower costs
Compliance guaranteed
Easier inventory & shipping
5. Smart sellers partner with cost-effective prep services to grow 
faster & keep more profits