By Bernardo Campelo, Forbes Business Council E-Commerce Leader, Amazon SPN Certified provider, Amazon SP-API authorized partner, and Founder of PrepVia.
I have read a lot of prep center agreements. I have also written one, versioned it, and operated under it across thousands of shipments at PrepVia, our facility in Miami, Florida. Operating under your own document, on the receiving end of every ambiguity you left in it, teaches you exactly which clauses do real work and which ones are decoration.
Most sellers sign a prep center agreement the way they accept a software update. Scroll, click, done. Months later a count does not match, or a payment lands late, or the seller decides to move on, and both sides go looking for the document. What they usually find is a template copied from another template, and it answers none of the questions that actually come up.
This is the checklist I wish every seller brought to the table: ten clauses, what healthy language looks like in each, and the question to ask before you sign. It pairs with our guide to prep center red flags, which covers the operational warning signs. This one covers the paper.
The 60-second version
The document predicts the operation. A prep center that has thought through offboarding, count records, and acceptance logging has thought through its operation.
The ten clauses that matter: service scope, liability and insurance, count of record, payment terms, storage and abandonment, offboarding, venue, persisted acceptance, changes to terms, and data confidentiality.
The one that saves relationships: the count-of-record clause. The healthy answer is that Amazon's receiving data governs, because it is the one ledger neither side controls.
The one almost everyone misses: acceptance that is actually recorded. A checkbox that writes nothing to a database protects nobody, including you.
Why the Paper Predicts the Operation
Writing a real agreement forces an operator to decide, in advance, what happens in every uncomfortable moment: a damaged case, a late invoice, a client who stops replying, a count that does not reconcile. An operator who never made those decisions on paper will be improvising them for the first time with your goods on the shelf.
That is why agreement quality is one of the most reliable proxies for operational quality, right next to the questions in our guide on how to choose an FBA prep center. A vague document is not a friendly document. It is a deferred argument.
The Ten Clauses in Detail
1. Service scope, per unit
Every prep center quotes a per-unit fee. Almost no agreement defines what that fee buys. Receiving? Inspection? The FNSKU label? Polybagging when Amazon requires it? Box content information? If the agreement does not itemize, the invoice eventually will, and invoice time is a bad time to learn the definitions.
Ask before you sign: for a typical shipment of mine, which actions does the base fee cover and which ones generate a second line on the invoice? Compare against a published sheet like our prep pricing page. If the operator cannot show you one, the price is whatever the invoice says it is.
2. Liability limits and what the insurance actually covers
Every professional services agreement limits liability. That is not a red flag: an operator handling client goods for cents per unit cannot underwrite unlimited exposure, and one who promises to has not read their own insurance policy. What matters is what sits behind the limit. Sellers routinely conflate two kinds of coverage, and a third is worth knowing about:
| Coverage type | Who it protects | What it pays for |
|---|---|---|
| Commercial general liability | The warehouse operator | Injury and property damage the business causes to third parties. It does not pay you for damaged inventory. |
| Warehouse legal liability | The client's goods | Physical loss or damage to stored goods in the operator's care, usually paid against declared value with per-occurrence caps. |
| Your own stock or cargo policy | You | Your inventory anywhere in the chain, on your own terms. Worth pricing once your inventory value passes the operator's caps. |
Ask before you sign: if a pallet of mine is damaged in your building, who files what, against which coverage, and what number is the payout computed from? An operator with a real policy answers in one breath.
3. Which record governs counts
Here is the moment every prep agreement should be written around. You send 1,200 units to the prep center. The prep center's system says it shipped 1,200 units to Amazon. Amazon's receiving screen says 1,180. Twenty units are unaccounted for, and there are three ledgers in the room: yours, the prep center's, and Amazon's.
The healthy answer, and the standard we hold our own count reconciliations to, is that Amazon's receiving data governs. Not the seller's records, and not ours. Amazon has no stake in the outcome, its counts come from an industrial receiving process neither party can edit, and both parties can read the same screen in Seller Central. It is the closest thing this industry has to a neutral arbiter.
This only works when both sides can read that record, which is why we wrote explainers on the Amazon inventory ledger and on gaps between declared and received units. Amazon's counts settle over days and a shipment can take weeks to close, so a healthy clause references the reconciled number after the shipment closes, not the first partial check-in. The same record is also how you prove Amazon received a shipment in a reimbursement case.
Ask before you sign: when your count and my count differ, which record wins, and is that written down? If the answer is their internal system, ask why the governing record should be one the counterparty maintains.
4. Payment terms and what happens in a late month
The payment clause has three parts: when invoices are due, what lateness triggers, and what leverage the operator holds while a balance is open. In this industry the leverage is physical. Nearly every US warehousing agreement includes some form of warehouse lien, meaning unpaid balances can pause outbound movement of the goods in storage. That is standard, which is exactly why you want the trigger and the cure period in writing.
Ask before you sign: if my payment is ten days late because my card on file expired, what happens on day one, day five, and day ten? You are listening for a sequence of notices, not a surprise.
5. Storage billing and abandoned inventory
Storage looks like a footnote until Q4. The clause should state the billing unit (per pallet, per shelf, per cubic foot), the cadence, and when storage starts: on receipt, or after a free window tied to prep turnaround.
The half nobody reads is abandonment. Operators need it because clients sometimes go dark: no replies, no payments, pallets holding space. A healthy abandonment clause is slow and loud: written notice, a cure window measured in weeks, a second notice, and only then liquidation with proceeds applied to the balance. An unhealthy one is fast and quiet.
Ask before you sign: how many days of silence and nonpayment before my inventory is at risk, and how many separate notices will I have received before that point?
6. How it ends: termination and offboarding
Every prep relationship ends eventually. The agreement should describe the exit while both parties still like each other. Three numbers matter: the notice period, the window to remove inventory after the end date, and the per-unit or per-pallet cost of outbound handling, because retrieval is real labor and someone will invoice it.
A missing offboarding clause is how sellers lose a quarter during a 3PL transition. We wrote a playbook on switching 3PLs without losing a quarter, and its first input is whatever your current agreement says about getting your goods back.
Ask before you sign: if I give notice today, what does leaving cost and how many days until my last pallet is on a truck? The answer belongs in the document, not in a reassuring email.
7. Venue and governing law
This is the clause everyone skips because it only matters in the worst month of a relationship. It names which state's law applies and where a formal disagreement would be heard. For a Florida operator like us, that is Florida. A disagreement with no named venue costs both sides money before anyone reaches the substance.
Ask before you sign: nothing complicated. Read the line, note the state, and think through what a formal process there would practically mean for you.
8. Acceptance that is actually recorded
This one comes from the software side of our operation, and it is the clause I have almost never seen a seller ask about. It also quietly determines whether the other nine exist at all.
An agreement only protects you if you can prove which version you accepted and when. A checkbox that writes nothing to a database is theater. If the acceptance event is not stored, neither side can later establish what was agreed: you cannot show that your version had a 30-day removal window rather than a 10-day one.
Ask before you sign: if I ask you in a year for the exact terms I accepted today, with the date, can your system produce them? A blank look tells you the paperwork is decorative.
9. Changes to terms
Prices change, Amazon's requirements change, and every operator updates terms eventually. Look for the notification mechanism. Continued-use-equals-acceptance is common and workable, but only when paired with real notice: an email to the account owner, a stated effective date with runway, and archived prior versions so you can see what moved. The unhealthy version updates a webpage silently and holds you to whatever it says today.
Ask before you sign: how did existing clients find out about your last price or terms change, and how much notice did they get? The answer is verifiable, and it tells you what the next change will feel like.
10. Confidentiality of your account data
A prep center sees data most sellers guard carefully: your SKUs, your suppliers printed on inbound cartons, your volumes and their seasonality. Many prep centers serve sellers who compete with each other, and some operators sell on Amazon.
Healthy language commits the operator to using your account data only to provide the services, keeping it away from other clients, and not using it to inform any selling activity of its own. And it survives termination.
Ask before you sign: do you or any affiliated company sell on Amazon, and what in this agreement stops my volume data from informing anyone else's decisions?
A Clear Agreement Protects the Seller as Much as the Operator
It is tempting to read a detailed agreement as the operator armoring itself. The opposite is closer to the truth. Ambiguity favors whoever holds the goods and writes the invoices, and that is never the seller. A vague agreement does not free you. It defers every hard question to the moment you have the least leverage: mid-Q4, with your inventory in someone else's building.
The detailed document forces the operator to behave the same way in month eighteen as in the sales call. A named count-of-record ends count standoffs before they start. A written offboarding path makes leaving a procedure, not a negotiation. Every clause on this list constrains the operator more than it constrains you, and that is the point. It is the same logic behind publishing an SLA with a real remedy instead of adjectives, a distinction we unpack in why most prep SLAs do not mean what you think. The operational twin of a good agreement is visibility: when live counts and invoices sit in a shared dashboard like our app, most questions never need the document at all.
Before You Sign: The Working Checklist
- Read the actual document, not the pitch summary. If there is no actual document, that is your answer.
- Ask the ten questions above and note which ones get one-breath answers. Hesitation on clause 2, 3, or 6 is meaningful.
- Request the certificate of insurance and the published price sheet.
- Confirm the count-of-record clause names a source neither side controls. Amazon's reconciled receiving data is the strong answer.
- Find the offboarding math: notice period, removal window, outbound cost. All three, in numbers.
- Test acceptance persistence: ask how the accepted version and date are stored.
- Read the venue line and note the state.
- Save your own dated copy of the exact version you signed.
Final Take
None of this requires a legal background. The ten questions are operational, and the answers should come from the operator on the spot. What you are testing is whether the prep center has thought about the whole life of the relationship, including its end, or only about the first invoice.
Across thousands of shipments we process, the pattern holds: the relationships that stay easy are the ones where the paper answered the hard questions before anyone needed to ask them. The agreement is not the fine print of the relationship. It is the operating system.
Frequently Asked Questions
What should a prep center agreement include?
At minimum it should define what the per-unit fee covers, limits of liability and the insurance behind them, which record governs inventory counts, payment terms, storage and abandonment rules, an offboarding process with timelines and costs, venue and governing law, how acceptance is recorded, how term changes are communicated, and confidentiality of your account data. If several of those are missing, the document is a formality rather than an agreement. Ask for the missing pieces in writing before you sign.
Who is liable if inventory is damaged at a prep center?
It depends on the agreement and the insurance behind it, which is exactly why the liability clause matters. Most professional agreements limit the operator's liability and back physical loss or damage with warehouse legal liability coverage, which typically pays against declared value with per-occurrence caps. The building's general liability policy does not cover your goods, so ask specifically about coverage that pays the seller, and request the certificate of insurance before signing.
Which inventory count should govern disputes with a prep center?
The strongest answer is Amazon's own receiving data, because it is the one record neither the seller nor the prep center controls, and both parties can read the same numbers in Seller Central. A seller's spreadsheet and a prep center's warehouse system are each maintained by an interested party, so an agreement that names either one as governing has a built-in imbalance. Use the reconciled Amazon count after the shipment closes, since first check-in numbers are often partial.
What happens to my inventory if I leave a prep center?
A healthy agreement gives you a defined window after termination to remove your goods, states the per-unit or per-pallet cost of the outbound work, and requires written notices before anything stronger happens. If you leave with an unpaid balance, most warehousing agreements allow the operator to hold goods until the balance clears, which is standard across the industry. Get the removal window and the outbound pricing in writing before you sign, not on the day you decide to leave.
Talk to PrepVia about onboarding →
Public terms · Net-30 · No minimums · Amazon SPN Certified · Miami, FL
