Amazon gives you a choice on every inbound shipment: send everything to one location and pay an inventory placement fee, or split it across several fulfilment centres and pay no fee.
Most sellers pick one and never revisit it. But which is cheaper is a per-product calculation, and it flips depending on how your product packs.
Prefer to watch? One hundred and sixty-three seconds on why packing efficiency decides the answer, costing both options as dummy shipments, and the costs that never appear in a freight quote.
The trade
Pay the placement fee — one destination, one freight movement, a fee per unit.
Split the shipment — no fee, but you are now paying freight to several destinations instead of one.
The split option is only cheaper when the extra freight costs less than the fee. That depends almost entirely on how efficiently your product fills a box.
Why packing efficiency decides it
A product that fits 48 units to a box where the box could hold 182 is shipping mostly air.
And you cannot always fix that — case pack configurations are frequently fixed by your supplier and not negotiable.
When a product packs badly, every additional destination multiplies an already inefficient shipment, and splitting across five locations gets expensive quickly.
When a product packs densely, the extra destinations cost comparatively little, and avoiding the fee wins.
So the answer is genuinely per product, and worth recalculating when case packs or rates change.
How to work it out
Build the same shipment twice as a dummy, and compare.
1. Create a dummy inbound to FBA with the split — Amazon assigns the destinations and quotes the freight. That gives you the multi-destination cost.
2. Create the equivalent single-destination shipment and read the placement fee.
3. Compare, and divide by units to get the saving per unit.
A worked example
A product with a warehouse in California, 48 units per box.
Shipping to AWD in California: quotes ranged $430–620, so take a midpoint of about $500.
The same shipment inbound to FBA across five locations: $1,543.
Splitting to five FBA locations was substantially more expensive than a single AWD movement — so for this product, the consolidated route won clearly.
That gap is a packing problem showing up as a freight problem.
This calculation is per product, per shipment, and it changes as rates and case packs change — see Where Your Margin Actually Goes. A decision made once against last year's rates is not a decision that still holds.
The third option
AWD often beats both.
One inbound movement to a single AWD facility, then Amazon distributes to FBA — so you avoid the placement fee and the multi-destination freight, and you gain a replenishment buffer.
Run the comparison three ways, not two:
Split FBA shipment, no fee.
Consolidated FBA shipment, plus fee.
Inbound to AWD, plus AWD storage, processing and transportation fees.
See Is AWD Cheaper? and AWD Shipping and Replenishment.
What else the split costs you
Freight is not the only difference.
Check-in time. More destinations means more shipments to track, and any one of them can stall — see Creating a Shipping Plan.
Reconciliation effort. Each destination is a separate shipment to check for discrepancies — see Claiming for Shipment Discrepancies.
Stock fragmentation. Units spread thinly across regions can leave you technically in stock but slow to serve.
None of these appear in the freight quote, and on a marginal calculation they should tip you toward consolidation.
Common mistakes
Choosing once and applying it to every product regardless of how they pack.
Comparing the fee against freight to one destination rather than to all the destinations Amazon assigns.
Ignoring case pack efficiency, which is the variable that actually decides it.
Leaving AWD out of the comparison, where it frequently wins.
Counting only freight, and ignoring the tracking and reconciliation load of five shipments.
Not recalculating when rates move or a supplier changes the case pack.
Related
- Is AWD Cheaper? — the third route, and how to cost it.
- Creating a Shipping Plan — where the split is assigned.
- Where Your Margin Actually Goes — what a per-unit freight saving is worth.