Understanding Amazon's Inventory Placement Service
Amazon's Inventory Placement Service (IPS) lets you ship all your inventory to a single fulfillment center instead of splitting across multiple FCs. But is the fee worth it?
IPS Fees (2026)
| Size Tier | Per Unit Fee |
|---|---|
| Small Standard | $0.30 |
| Large Standard | $0.40 |
| Large Bulky | $1.30 |
| Extra Large 0–50 lb | $1.50 |
| Extra Large 50–70 lb | $2.00 |
| Extra Large 70+ lb | $3.50 |
When IPS Saves Money
Scenario 1: Small Parcel Shipments If Amazon splits your 10-box shipment into 4 destinations, you're paying for 4 separate UPS/FedEx shipments. IPS fee may be cheaper than quadrupled shipping costs.
Scenario 2: Low-Weight, High-Unit Products 100 units at $0.30/unit = $30 IPS fee. Shipping to 4 FCs separately could cost $40+ more.
When Distributed Shipping Is Better
Scenario 1: FTL/LTL Shipments For pallet-quantity shipments, the per-unit math changes dramatically. 5,000 units at $0.30 = $1,500. A single FTL to one FC costs $2,000–$3,500. Two FTLs to two FCs might cost $4,000–$5,000 but avoid $1,500 in IPS fees.
Scenario 2: Heavy Products Large bulky items at $1.30/unit add up fast. 500 units = $650 in IPS fees alone.
Decision Framework
| Factor | Choose IPS | Choose Distributed |
|---|---|---|
| Shipment size | Small parcel | LTL/FTL |
| Product weight | Light | Heavy |
| Unit count | Low (<500) | High (1,000+) |
| Destinations | 4+ FCs | 2–3 FCs |
| Shipping partner | No broker | Experienced FBA broker |
The Best Strategy
Work with a freight broker experienced in FBA who can calculate total landed cost for both options on every shipment. The answer often changes based on the specific fulfillment centers Amazon assigns.
