Every brand has a number that keeps it in business. For some it’s conversion rate. For a lot of ecommerce brands, it’s often cost per unit.

Amazon prep costs used to feel like a side note. A few cents for bagging here. A little for labeling there. You accepted the fees because they kept boxes moving. Then you look at the fee table and realize those cents are not small at scale.

What Amazon prep costs look like in real life

Take the official FBA Prep Service fees table. A standard size fragile product that needs bubble wrap and a label costs $1.59 per unit in prep. A standard size adult product that needs an opaque bag and a label costs $1.55 per unit. A simple small item that only needs bagging and a label costs one dollar twenty five per unit.

None of those numbers look fatal on their own. The problem is volume.

Say you sell ten thousand small items a month that need bagging and labeling. At $1.25 each, Amazon prep costs you $12,500 every month. That’s $150,000 a year for one line of prep work. Now add a second small SKU that ships 5,000 units a month. That’s another $75,000 a year.

The table doesn’t move. But your margin does.

How small fees grow into big decisions

Most brands don’t feel this in month one. They feel it when they look back over a full year. You see prep totals in your statements and ask a simple question: Did I really need to spend that much just so someone else could put a label and a bag on my product?

Imagine a basic comparison:

• Amazon charges $1.25 per unit for bagging and labeling a small standard size item.
• A good 3PL charges 50 cents per unit for the same work. The difference is 75 cents.

At 20,000 units a month, you pay:

• To Amazon: $25,000
• To the 3PL: $10,000

The gap is $15,000 every month or $180,000 a year. Even if your own numbers are half that size, the gap is still large enough to matter.

This is where the breakeven point sits. Once your volume crosses a modest line, Amazon prep costs for many SKUs are no longer a convenience fee. They’re a quiet tax for not building your own system.

Why brands start asking what else they are paying for

There’s another effect here. Once you see how much you spend on prep, you start to ask about the rest: Storage. Shipping. Returns.

ShipSage ran a comparison on oversized items that looked at total pick, pack, and ship. In the table, four sample products showed Amazon FBA shipping and handling fees like $46.87 for one item and $69.06 for another. ShipSage shipping for the same items sat in ranges like $16.46 to $26.24. In those examples, shipping costs fell by as much as 65 percent.

Prep isn’t the only place money leaks. It’s simply the most visible line item when you stare at that FBA fee table.

Once brands decide to move prep out of Amazon, many also decide to move more of the downstream work. They ask a 3PL to handle storage, pick and pack, and shipping from the same building.

The question changes from “How much does Amazon charge me?” to “What’s the total landed cost per order if I run this through my own network?”

What a serious 3PL does for prep

Prep is boring by design. When it’s interesting, something has gone wrong. A warehouse that treats prep as core work sets up its day very differently from a seller who relies on Amazon to fix problems later.

First, the warehouse receives inventory and checks cartons against purchase orders. Damaged cartons are flagged before they mix with good units.

Second, it inspects sample units and maps each SKU to a clear prep rule: This item always gets this bag. This size of bubble wrap. This warning label in this spot.

Third, it builds simple work instructions inside its WMS and OMS. Staff don’t invent a process each day. They follow written steps that live in the system and on the floor.

ShipSage structures this with its own order management and warehouse management platform and a network of warehouses across the country. That setup lets the team store inventory closer to end customers and still keep receiving and prep under control.

When orders ship, ShipSage hits a same-day shipping rate of roughly 99.5 percent and reaches two-day delivery for about 97 percent of the United States.

Inventory accuracy sits near 99.9 percent and service tasks like work orders and value added work hit their 48-hour targets about 99 percent of the time.

Those numbers aren’t magic. They’re what you get when prep and shipping live in one consistent system.

How to find your own breakeven point

You don’t need complex software to decide whether Amazon prep costs still make sense. You need a sheet and honest numbers.

Step one.

List every SKU that uses Amazon prep.

Step two.

For each SKU, match it to a row in the FBA Prep Service fees table.
Fragile, small, adult, powders, apparel, and so on.

Step three.

Pull the actual units shipped per month for each SKU.

Step four.

Multiply units by the total per unit prep fee in the table.
That gives you Amazon prep costs by SKU and in total.

Step five.

Ask one trusted 3PL for a simple per unit quote for the same work:

• Bagging.
• Labeling.
• Simple kitting if needed.

Step six.

Multiply again.
Now you see what it would have cost to send the same units through a warehouse partner instead.

The gap between those two totals, over 12 months, is your decision space. For some tiny catalogs, the difference will not justify a change. For brands with even moderate volume on small items, the math often argues for moving prep out of Amazon and into a specialist warehouse.

Where ShipSage fits into that decision

ShipSage doesn’t exist to simply be cheaper than Amazon. It exists so brands can have one place where prep, storage, shipping, and Seller Fulfilled Prime all line up under one set of rules.

You still pay per unit for prep. You still pay to move boxes across the country. The difference is that you can design a system around your products instead of around the tightest part of an FBA fee table.

When prep lives inside a partner like ShipSage, you can:

• Build standard work for small, fragile, and adult SKUs.
• Use the same inventory for Prime orders and non-Prime orders.
• Take advantage of shipping savings on larger SKUs where FBA rates climb fast.

And as Amazon stops offering prep services in the United States, you aren’t stuck scrambling. You already know what it costs to do the work yourself and you already have a warehouse that does it every day.

In the end, the brands that win are not always the ones with the highest revenue.
They’re the ones that understand where each dollar actually goes and are willing to move that dollar when the math no longer works.

Amazon prep costs are just one line on that ledger. But they’re a line worth reading closely.

FAQ about Amazon prep costs

1. What are Amazon prep costs for small items?

Amazon prep costs for small standard size items that need bagging and labeling can reach $1.25 per unit. That includes both the bagging fee and the label fee from the FBA Prep Service table.

2. When do Amazon prep costs start to favor a 3PL instead?

Once you ship even tens of thousands of units a year, the difference between Amazon fees and a lower per unit rate from a 3PL can add up to tens of thousands of dollars. The higher your volume, the more the gap grows.

3. Do I need to move all SKUs away from Amazon prep at once?

No. Many brands start by moving a few small SKUs with high prep spend to a warehouse partner and keep others on FBA for a while. The goal is to chip away at the most expensive prep first, not flip everything overnight.

4. How does ShipSage help reduce Amazon prep costs?

ShipSage receives your inventory, applies consistent bagging and labeling based on your rules, and then ships orders directly or through Seller Fulfilled Prime. By replacing FBA prep with its own workflows, it can often deliver a lower per unit prep cost plus better control over shipping and inventory.

5. How do shipping savings connect to prep savings?

Once prep and storage move into a 3PL, you can also route orders through that network instead of FBA. In ShipSage examples for oversized items, shipping and handling have been up to 65 percent lower than comparable FBA fees, which adds another layer of savings on top of reduced prep costs.