When you create an FBA shipping plan, Amazon often splits your inventory across multiple fulfilment centres. The Inventory Placement Service (IPS) lets you send everything to a single location instead — for a fee. Here is whether it is worth it.
Why Amazon Splits Shipments
Amazon distributes inventory across its fulfilment centre network to get products closer to customers. By having your stock in multiple locations, Amazon can offer faster delivery times. This is great for customers and for your delivery speed metrics, but it means you might need to ship boxes to two, three, or even four different fulfilment centres from a single shipping plan.
What IPS Changes
With IPS enabled, Amazon designates a single fulfilment centre for your entire shipment. You send everything to one address, and Amazon handles the redistribution internally. This simplifies your shipping logistics — one collection, one destination, one set of labels.
The Cost
IPS charges a per-unit fee that varies by product size tier. For standard-size items, it is typically around £0.20–£0.30 per unit. For oversize items, it is higher. These fees are in addition to your regular FBA fulfilment fees.
The question is whether this per-unit cost is offset by the shipping savings. If splitting a shipment means sending three separate courier deliveries to three different fulfilment centres, the total shipping cost might exceed what IPS would have charged to send one shipment to one location.
When IPS Makes Sense
IPS is most cost-effective when you are sending small quantities of many different products (where split shipments would mean sending tiny boxes to multiple locations), when the fulfilment centres Amazon assigns are far apart geographically (maximising your shipping costs), or when you value simplicity and time savings over absolute cost minimisation.
When to Skip IPS
If you are sending large quantities of a single product, split shipments are often cheaper because you can fill each box efficiently. If the split destinations happen to be nearby, the additional shipping cost may be minimal. And if you are using pallet delivery, splitting between two or three destinations is manageable.
How to Enable IPS
In Seller Central, go to Settings, then Fulfilment by Amazon. Under the Inbound Settings section, you can enable or disable the Inventory Placement Service. The setting applies to all future shipping plans — you cannot toggle it per shipment.
The Prep Centre Perspective
Many sellers who use prep centres find that IPS is less necessary because the prep centre is already optimising shipments. At Precision, we ship to multiple fulfilment centres regularly — it is part of our standard workflow. We consolidate stock efficiently, use appropriate shipping methods for each destination, and handle the logistics so you do not have to.
Whether you use IPS or accept split shipments, the key is factoring the true shipping cost into your product economics. Shipping to Amazon is a cost of doing business with FBA, and managing it well directly improves your bottom line.