Thinking about starting a prep center but not sure what it will cost? This guide breaks down realistic startup costs for garage, small warehouse, and 3PL-level setups. We cover line-item expenses (rent, labor, insurance, materials), conservative revenue models, and profit margin scenarios so you can see what it really takes to run a sustainable prep business. Learn how to manage tight margins and build a scalable operation.
Starting a prep center sounds straightforward — rent a space, buy some supplies, and start taking in Amazon FBA inventory. But in reality, this is a tight-margin business where every dollar counts.
Unlike ecommerce retail (where a single winning product might generate 50%+ margins), prep centers live in the world of 10–25% net margins. That means if you don’t know your numbers — startup costs, operating expenses, and revenue potential — profitability can disappear fast.
This guide breaks down realistic startup costs for different setups (garage, warehouse, 3PL), revenue and profit margin scenarios, and strategies for managing tight margins.
👉 If you’re just getting started, also see our Complete Guide to Starting a Prep Center for a full overview of setup, software, and marketing.
The cost depends on your starting scale. A small prep center launched from a garage or storage unit might get off the ground for $5,000–$15,000, while a small commercial warehouse requires $20,000–$50,000+. A professional 3PL-level operation can easily reach $100,000–$250,000+ in startup and ramp-up costs.
The main cost drivers are:
👉 The right setup for you depends on your available capital, risk tolerance, and long-term vision.
For entrepreneurs testing the waters, starting in a garage, storage unit, or small flex space is the lowest-cost option.
Total Estimated Startup: $5,000–$15,000
Total Monthly Costs: $650–$2,500
Margin Scenario:
👉 Best For: Testing the business model before scaling. Not ideal for long-term growth.
Most successful prep centers move quickly from a garage to a small warehouse (1,000–3,000 sq. ft.).
Total Estimated Startup: $20,000–$50,000
Total Monthly Costs: $10,000–$18,000
Margin Scenarios:
👉 Best For: Entrepreneurs serious about building a sustainable prep business.
At scale, a prep center can evolve into a regional 3PL.
Total Estimated Startup: $100,000–$250,000+
Total Monthly Costs: $50,000–$90,000
Margins are tight in this business, but smart systems keep you profitable.
👉 In this business, an extra $0.10 saved per unit can mean thousands in annual profit.
Prep centers can start small in a garage, grow into warehouses, and eventually expand into 3PLs.
👉 To complete the picture, explore our Complete Guide to Starting a Prep Center and related posts on Location Strategy, Software Stacks, Marketing, and SOPs & Systems.
Amazon FBA expert and consultant with over 5 years of experience helping sellers optimize their operations and maximize profits.