How to Make the Most of Amazon FBA Split Shipments

Split ShipmentsLast month, we talked about Amazon Split Shipments and the options you have between Distributed Inventory Placement (DIP) or Inventory Placement Service (ISP). Today, we’re going to take the conversation to the next level and talk about how to make the most of whatever placement decision you make. For most of us, this decision should not be a one time decision where we set things up and forget about it. A lot of time and money can be wasted if you don’t have a strategy in how you choose to react to Amazon split shipments.

The following are different shipping situations I have found myself in. I’ll do my best to explain how I have dealt with Amazon split shipments and why I felt it was the best decision to make.

Note: When I mention BNA3, PHX6, RIC2, etc, I am referring to the code names of individual Amazon fulfillment centers that are spread throughout the country.

A. Shipment contains 250 items.

138 → BNA3
  70 → PHX6
  42 → RIC2

I leave this shipment with Distributed Inventory Placement (the default). There are more than enough items in each individual shipment to warrant the shipping costs. It’s not worth it to pay $0.30 per item to send them all to the same FBA warehouse.

B. Shipment contains 30 items.

26 → BNA3
 2 → PHX6
 1 → RIC2
 1 → ABE2

You have four options with this situation:

1. You can send the items in under Distributed Inventory Placement, but you’ll overpay in shipping costs to send only two items to PHX6, one to RIC2, and one to ABE2. This option might cost you about $15-$20 more than it needs to cost.

2. You can turn on Inventory Placement Service and pay around $0.30 per item. This will make sure (most of the time) that they will all go to the same fulfillment warehouse. In this example, you will be charged a fee of $9.00 ($0.30 x 30) for all 30 items to be sent to the same FBA warehouse.

3. You can send in your shipment of 26 items to BNA3, and then delete the other shipments. Maybe next time you enter them in, they’ll all go to the same fulfillment center. Important: I do not recommend deleting shipments on a regular basis. This will hurt your seller metrics in the long run, and should only be used in rare circumstances.

4. You can go ahead and send in your shipment of 26 items to BNA3, but leave PHX6, RIC2, and ABE2 open. While leaving these shipments open, you can add more items on a future date. Once you have enough items (maybe 8-10 items or 8-10 pounds worth of items), then you can proceed with sending them in.

The tricky thing about Inventory Placement Services, is that you need to turn it on before you even start a shipment. If you want to use ISP, then the most likely situations when you would need it would be: 1) if you had a small amount of inventory to ship and/or 2) if you had a smaller shipment with multiples of the same SKU. When you have multiples of the same item, Amazon likes to spread those out at different fulfillment centers. Most likely, these two circumstances would be the times that you would consider using ISP. Just don’t forget to turn IPS off when you’re about to start a new, large shipment.

cardboard-box-open-lgPersonally, I don’t think it’s a wise financial decision to pay $0.30 – $0.40 per item to send them all to the same warehouse. If I have a shipment of 50 items where Amazon wants to send 48 items to Indiana and 2 items to Arizona, I am not going to pay $15 just so that I’ll avoid paying an extra $10 to ship those two items to a Arizona. To me, it’s just not worth it. Most of the time, I’ll simply leave the smaller shipment open and wait until I have enough items to make a full box which, overall, makes the shipping cost lower.

On the other hand, just because it’s not worth it to me, doesn’t mean that Inventory Placement Service isn’t a good decision for you. You may not be able to wait for a larger shipment to send your inventory in. You might not have the storage space to hold even a few items at your house, or the item you just bought might be a super hot toy item that needs to get to FBA ASAP. In that case, do the math and see if Inventory Placement Service is right for you. If you decide that inventory placement is a long term solution for you, then be sure you include that in your costs when you are out sourcing an item for resale.

So what do you think about using inventory placement service? Is it worth it to you? What other split shipment situations have you been in? I’d love to hear your thoughts on this.

 

35 Responses to How to Make the Most of Amazon FBA Split Shipments

  1. Great post, Stephen, awesome tips. I didn’t know deleting shipments could affect our seller metrics, I’l bear that in mind for future.

    • Thanks, Melissa. Deleting your shipments every once in a while won’t hurt your metrics, but doing it on a regular basis will. Only delete a shipment in necessary situations.

  2. I have been using IPS a lot lately. I send in smaller shipments ( my son and my rule is to use IPS if the shipment is less than 70 items) and it seems to be way cheaper for me to send them to CHA1 ( from Indiana) than Arizona. I just sent in a shipment that had some heavy items and I am sure that I would have had to send some to Arizona, but I was able to send them all to CHA1. I think that weight, shipping supplies and convenience ( your time is worth money) should be part of the equation.

  3. Plus shipping time should be considered ( if it is a hot item) I get product in in 3 days to CHA1 and it is over a week to Arizona. Sometimes that can make a big difference in what you can get for your products.

  4. There is a consideration not mentioned here: If “a super-hot toy needs to get to FBA ASAP,” as you mention, then using IPS is likely going to delay its availability even further, because MOST of the time, Amazon is going to re-route these items to where they wanted them to be in the first place. During that rerouting time, those “hot toys” are still going to be unavailable for sale, while you wait for them to arrive at their desired destination.

    This may not be a big issue between January and October, but can really, really hurt you in November and December. As a matter of fact, any shipping delay in November and December can be a huge problem, simply because the warehouses are completely overrun with incoming products, but then: that’s another topic entirely! ;-)

    Good post, easy to follow, and informative.

    • I haven’t noticed any delay with my products. They show up for sell ( and I sell them) when they are checked in at the one warehouse ( with that said, I am not sending 50 of an item)

    • Thanks for the encouragement, Georgene.
      The delay while Amazon moves your items around is definitely a possibility and something to consider. I did mention that possibility in my first blog post on Amazon Spilt Shipments (http://www.fulltimefba.com/amazon-split-shipments-and-what-you-can-do-about-them/), but I probably should have brought it up again in this post, as it can be a deal breaker when it comes to “super hot” items that need to be ready for sale ASAP. Thanks for bringing it to everyone’s attention on this post.

  5. I have a question.
    In option 4, can you send in the 26 items to BNA3 and can you choose to send the rest of the items to one warehouse instead of sending them to PHX6, RIC2, and ABE2 ?

    • Andrew Cassinelli

      DA, I don’t think so, since you have to turn on ISP before creating a new shipment. Those few items would already been in shipments with ISP off.

      You could delete those shipments, turn ISP on and then load those remaining items, but they won’t necessarily go to the location your first larger shipment is going.

      Personally, I would prefer to wait until you have enough for a full box before finishing a shipment.

    • What Andrew said. He’s a smart cookie!

  6. Hi Stephen,

    At first I used to just send whatever Amazon told me to send where they wanted it. I found myself spending a lot of extra money on shipping until I realized that I had options.

    I started holding back shipments that were too small (lite) and adding items to them as I sourced and listed more inventory. Once the box got to a reasonable size (weight) I would complete the shipment and send it off.

    So far this is working for me.

    Thanks for a great article.

    Sincerely,
    Mark F.

  7. One option that was left out of the discussion was the case pack option. Similar to IP, you can send items of the same skus together at no extra charge. These items will get redistributed but you save the .30 per item charge. I use it quite frequently.

  8. One option I recently discovered shortly after starting to use the newer shipment creation workflow is that if I’m shipping in just 2 or 3 SKU’s but multiples of those SKU’s, I can turn off the Inventory Placement to save the per item cost and most of the time it will just be 1 shipment to 1 FC if I only start off saying that I’m sending 1 of each SKU, but at the last step of the shipment process on the page where you are entering the weight of the box, there is a button that says “Review and Modify Units” (or something very close to that) and at that time I can add the additional units I want to put in the box.
    So to simplify this scenario, when I am creating my shipping plan, I only add a quantity of 1 for each SKU, (which more than likely will end up being 1 shipment to 1 FC and this only works with 3 or less SKU’s from my experience) but after the Shipment is created and you go to “Work on Shipment” you can change the quantity. I do find that AZ will typically only let me raise the quantity to 7 of any individual item but I keep that in mind while I am planning the shipment. Last thing to keep in mind is that you have to remember to print the right quantity of labels at that point in the Shipping Plan creation even though you are only using 1 as your quantity you are sending at that point.

    • Dave,
      I’ve used this option too, but only when I actually forget to add the correct amount of items to my shipment. I’ve read in a few ebooks (can’t recall right now which ones), but I think this is another “loop hole” that I would not try to use too much. Again, it’s just me wanting to be safe and have the best seller metrics as possible. All the best to you.

  9. Th bigger picture ( and best answer) is to source products that have a margin large enough that $.30 doesn’t make a difference one way or other.

    I am selective about what I sell and have lots of wiggle room, but I understand a penny saved is a penny earned.

  10. Stephen,

    Good, solid, sound, advice as always!

    I had not heard “Important: I do not recommend deleting shipments on a regular basis. This will hurt your seller metrics in the long run, and should only be used in rare circumstances” and that is good to know.

  11. I have very small quantities of each item. I have been doing Ok as a seller but my inventory is growing. The max i have may be 65 of one item. Most are 5-6. What do you all recommend?

    • Marielena,
      It all depends on how much you’re shipping and the weight of the shipping boxes. If you have only 1-3 items going in a shipment, then it might be best to turn ISP on if the math works for you, or I’d wait until you had more going in to make a larger shipment. If you have at least 5 items or 5 pounds of items going to a warehouse, I’d think that’d be enough to not use ISP.

  12. Marielena,
    I have found that when I send in more than 18 of one item they all go to the same warehouse without Inventory Placement.

    • Sidra,
      I’ve noticed the same thing. Anytime I send in 18+ of the same thing, they always seem to go to the same warehouse. I assume from there most of those items are then split up by Amazon and shipped to multiple warehouses on Amazon’s dime. Amazon always wants as many products spread out over the entire country, so that when a customer orders that item, there will be one at the warehouse closet to that person.

    • I have heard that before but it doesn’t seem to work for me. I tried it on a batch with multiple SKUs and also on a batch with a single SKU; nope, AZ still wants me to spread my stuff all over. Wonder if it only works on older accounts?

      I do turn off IPS for media though since those seem to go to the same warehouse anyways.

      • Turning off IPS for media items is a very smart idea. They almost always go to the same place (unless you have a lot of multiples of the same item).

  13. Thanks so much Stephen for telling us that deleting our shipments could affect our seller metrics. That’s really important to know. I just did that a few days ago because I only had one item going all the way across the map. Just didn’t make sense to send one item.
    Lots of good information, thanks again!

    • Val,
      You’re welcome. Don’t worry about deleting shipments every now and then. Only when it’s done excessive amounts of time will it be a problem for your seller metrics.

  14. I opened a ticket with Seller Support and got this reply about the deleting shipments question:
    Dear Dave,

    Thank you for contacting Amazon Seller Support.

    I read your query and glad to inform that the that there is no hit on your metrics on deleting shipments.

    It is obvious that you would try creating shipment to see if they are allowed for FBA or not.

    Please be rest assured about it that there is no negative impact on your metrics for this.

    Please understand there are many irrelevant talks on forums regarding this as some seller might have had any bad experience due to any other reason and must have understood for this.

    I have tried to answer you in the best possible way.
    —————-
    So fortunately it appears that it does not hurt your metrics. I typically go through the whole shipment creation process when I have questions about whether an item is allowed to be sent in to FBA. (Hazmat, restricted etc.) So I routinely delete shipments after I do that. Hope this helps everyone!

    • Dave,
      It’s funny… when I asked an FBA representative about this question, they replied, “Yes, your seller metrics are dinged, but only with excessive usage of the ‘delete shipment’ option.” It looks like, just like in other situations, different FBA workers give out different “official” FBA answers. Keep that email from them in case you ever discover that you were dinged. I wish you continued success!

  15. Yes, Stephen, I thought of that later after I posted that! YMMV with questions answered by seller support!
    The way I phrased it to seller support (and this is true) is that I always go through the full item and shipment creation process on items that I have any question on whether they are FBA eligible (Hazmat, Restricted, etc) before I buy them just to make sure, and then I delete the shipment. I do this maybe 3 or 4 times a month when I’m not sure of an item eligibility for FBA.

  16. I use the Inventory Placement Service for ease of packing. Trying to fill a box in the combination AZ wants is like trying to fit a square peg in a round hole. Very frustrating.

    I am confused about #4. When you create a shipment, it closes out the shipping plan. How are you able to add more items? Also, AZ wants you to send all related shipments to arrive at each fulfillment center within 7 days of the first shipment received.

    • Phebe, I use ScanPower to list all of my items, so maybe I’m able to keep it open because of that service. I’ve only listed on Amazon a few times, and would much rather use the ScanPower service to list, label, and ship. I’m able to close the shipments one at a time, so that I can leave shipments open if I don’t have enough items in there for a “full” shipment. Also, I’ve had a shipment open for about a month at the longest as I waited for enough items to make it worth the shipping costs… and have never had anything negative happen because of waiting. I don’t make a habit of waiting that long, but do from time to time.

  17. I’ve use same trick as you, thank you Stephen to make it clear.

  18. Corinna L Stevenson

    I am confused as to why deleting a shipment can hurt our seller metrics. Can you point me in the direction of where this is talked about on Amazon so I can understand it better?

    • An fellow Amazon FBA colleague of mine got this email from Amazon after deleting shipments on a regular basis:

      ———-
      Dear FBA Seller,
      Based on your recent inbound history to Amazon fulfillment centers, we wanted to remind you of FBA’s Distributed Inventory Placement guidelines to help ensure that your inbound products are received as quickly as possible. Click the button at right to learn more.
      Learn More About Distributed Inventory Placement (sign-in required)
      Please note that FBA distributes inventory to get it closer to customers, so we can reduce shipping times and delight your customers.
      To avoid inbound issues, please adhere to the following requirements:
      •Send each shipment in the associated plan. Do not delete or ignore these shipments.
      •All shipments in a plan are expected to be received within seven days.
      •Ship all related shipments in a plan at the same time.
      •If you need to make a quantity change of more than 5% for a product in a shipment, remove the MSKU from each shipment, “Send/Replenish” the MSKU from the Inventory Amazon Fulfills page, enter the new quantity (the original quantity plus or minus the change in quantity) and finally create a new shipment for the MSKU or use the “Add to an Existing Shipment” option to combine with other shipments.
      IMPORTANT: Failure to comply with FBA product preparation requirements, safety requirements, inbound requirements and product restrictions may result in the refusal of inventory at the Amazon fulfillment center, disposal or return of inventory, blocking of future shipments to the fulfillment center, or charging for unplanned services at the fulfillment center. Also, failure to follow the shipment plan can cause delays in your inbound shipment receive time.
      If you have any questions, please contact us at fba-inbound-compliance@….
      Thank you for your time,
      The Fulfillment by Amazon Team
      ————–
      Again, deleting shipments from time to time is NOT a big deal to Amazon, but doing it on a regular basis could hurt you as was warned above.
      I hope this helps everyone!

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