Discover how tax-free states like Oregon, Montana, and Delaware give ecommerce sellers an edge. Learn how prep centers in these states boost margins.
Every ecommerce seller knows that margins are tight. Between Amazon referral fees, FBA storage costs, advertising, shipping, and returns, profits can vanish quickly. But there’s one overlooked way to protect your bottom line: leveraging prep centers in tax-free states.
Certain U.S. states — including Oregon, Montana, Delaware, New Hampshire, and Alaska — do not collect state sales tax. By routing your inventory through prep centers in these states, you can often avoid paying unnecessary taxes on your products before they’re shipped to Amazon FBA or other fulfillment centers.
For high-volume sellers, this can mean thousands of dollars in annual savings.
A prep center is a warehouse that receives your products, prepares them according to Amazon or marketplace requirements, and then ships them to fulfillment centers or customers.
When that prep center is located in a tax-free state, the incoming inventory isn’t taxed. For example:
Result: you keep that 6–9% in your pocket instead of giving it to the state.
Even a 6% tax adds up quickly. On $100,000 worth of inventory, that’s $6,000 saved instantly by routing through a tax-free state.
For ecommerce sellers, margins can be as thin as 10–20%. Avoiding sales tax can mean the difference between break-even and profit.
Lower costs = more flexibility on pricing. You can:
As your volume grows, so do the savings. Small sellers might save hundreds per year, but larger sellers save tens of thousands.
Prep centers in these states don’t just save you tax — they also handle:
This frees you up to focus on product sourcing and marketing.
Not every prep center is created equal. Here’s what to consider:
Pro Tip: Sometimes the cheapest per-unit rate is not the best. A reliable prep center in Oregon or Delaware may save you more in the long run than a cheaper but less responsive provider elsewhere.
Should every seller use a tax-free prep center? Not necessarily.
That said, for many sellers shipping pallets of goods into Amazon FBA, tax-free states are a no-brainer.
When it comes to maximizing ecommerce profits, every dollar counts. Choosing a prep center in a tax-free state like Oregon, Montana, or Delaware is one of the simplest ways to lower costs and improve margins.
For Amazon FBA, eBay, or Shopify sellers, these savings compound as your business scales. Combine tax-free prep centers with strong logistics support, and you’ll give yourself the competitive edge needed to grow in today’s crowded ecommerce landscape.
👉 Next step: Check out our Prep Centers Directory to find partners in tax-free states and start increasing your margins today.
Amazon FBA expert and consultant with over 5 years of experience helping sellers optimize their operations and maximize profits.