For most toy and game brands, fulfillment costs are the least exciting part of the business, until they quietly eat the entire margin. Getting the math wrong on FBA, storage, and long term fees can cost thousands before a brand even notices the leak. In this recap of Toy Launch’s monthly webinar, Jason Hsieh sits down with Eric Chen, founder of Moco Logistics and the board game brand Moco Games, to break down exactly where that money goes and how to stop losing it. Eric has spent nine years selling on Amazon and built his own game, Sabobatage, from Kickstarter into retailers like Barnes and Noble and Target, so he has seen these mistakes from both sides of the warehouse. Here is what toy and game brands need to know about the supply chain math protecting their margins.
In 53 minutes, you’ll discover:
- How to calculate your true landed cost, and why most toy and game sellers get it wrong.
- The real difference between FBA and a 3PL, and when your brand actually needs both.
- How to avoid Amazon’s long term storage fees, AWD’s replenishment trap, and other costly fulfillment mistakes.
View Table Of Contents
What Is Your True Landed Cost, and Why Don’t Sellers Know It?
Landed cost is the true price of getting a unit into a customer’s hands, combining manufacturer cost, freight, and duty per unit. Jason pointed out that many entrepreneurs in the toy and game space never calculate this number accurately, which becomes fatal the moment they try to scale.
Eric sees the same gap across his own client base, from brand new sellers launching their first product to eight figure companies, because platform fees change every year and eat into margins quietly. Amazon raised its FBA fulfillment fee roughly 3 to 5 percent across sizing tiers in early 2026 alone, on top of newer initiatives like AWD that come with their own hidden trade offs. Knowing this number is the starting point for every other decision covered in this recap.
FBA vs. 3PL: What Sellers Actually Need to Weigh
Eric’s broad rule for most brands is to use both, listing on Amazon FBA while also running a 3PL for direct to consumer orders. FBA is more streamlined and cost efficient for a single product, but the moment a brand adds a second or third SKU, sending multiple items through FBA gets expensive fast.
A 3PL costs more on paper, but it is what lets a brand collect customer emails, build a real audience, and market future launches directly instead of relying on Amazon’s opaque customer relationship. Jason added that Amazon is a necessary channel because it is still the biggest marketplace for discovery, but it should not be a brand’s only channel once it has more than one product to manage.
Storage Fees, Long Term Storage, and the AWD Trap
Amazon and most 3PLs charge storage based on space, with Amazon calculating by cubic foot and most 3PLs charging per pallet per month, typically 12 to 30 dollars depending on pallet size. The bigger risk is Amazon’s long term storage surcharge, which kicks in once inventory sits for more than 180 days and increases every month after that, so Jason warned sellers never to ship a full container straight into FBA.
Eric added that AWD, Amazon’s newer long term storage warehouse network, can make this worse if a seller leaves automated replenishment turned on, because Amazon’s system does not distinguish between fast and slow selling regions when it restocks. His own brand got caught with 8,000 to 9,000 units flooding into FBA right after the 2026 holiday season ended, landing in the slowest months to sell toys. His recommendation for any toy or game brand using AWD is to turn off automated replenishment and manage restocking manually instead.
Inbound Placement Fees, Labeling, and Returns
Beyond storage, three more fee categories quietly add up before a unit ever sells:
Inbound Placement Fees
Amazon’s structure keeps changing, sometimes splitting a shipment across three to five warehouse locations and charging extra to consolidate to one. A 3PL typically receives everything into a single location for a flat, cheaper fee instead.
Prep and Labeling
Amazon phased out free FBA prep labeling in January 2026. Eric said that is pushing more of that work either back to the factory in China, where it is cheapest, or onto 3PLs like his.
Returns
Amazon sometimes issues a customer refund without ever getting the product back, and it will not proactively reimburse a seller for its own mistakes. On the 3PL side, Eric’s team uses a flat RMA fee to inspect and restock returns, and they intentionally batch small return shipments together rather than processing hundreds of individual packages one at a time.
The Supply Chain Math That Protects Your Margins
Once the fee structure is clear, three recurring habits keep it from creeping back up. Jason recommends keeping 60 to 90 days of inventory in FBA, and Eric agreed that window works well given it typically takes about 30 days to restock Amazon from a 3PL. Fulfillment mix is the second lever, and the right split between 3PL, FBA, and any additional regional warehousing depends on team size and order volume, with solo sellers usually better off keeping things simple until they grow.
The third piece is a recurring fee audit. Mismeasurement, missing units, and unreimbursed returns quietly drain revenue that most sellers never notice without checking. Toy Launch offers a free version of this audit, and Eric’s team runs the same kind of review for shipping and fulfillment fees on the logistics side.
Kickstarter and Distributor Fulfillment Need a Different Plan
Crowdfunding orders often involve bundles, multi packs, and other custom configurations that Amazon is not built to handle, which is why Jason does not recommend using Amazon for Kickstarter fulfillment. Eric’s own background is in crowdfunding, having launched Sabobatage on Kickstarter, and his team now handles bulk pre-order fulfillment for other publishers who need pre-packed bundles shipped with real protection, which matters even more for board games where the box itself is part of the product.
Distributors introduce a similar wrinkle. Eric has found most distributors run on older, slower systems than a dedicated ecommerce 3PL, so many brands end up using both: a 3PL for direct and Amazon orders, and a distributor purely for retail accounts like Barnes and Noble or Target. The right setup depends on channel mix, not a one size fits all answer.
Cutting Costs Without Cutting Corners
Skipping a Specialized 3PL
Choosing an ecommerce 3PL that is not built for the work often leads to poor prepping and damaged shipments, which ends up costing more in returns and lost inventory than the savings ever covered.
Chasing the Cheapest Freight Rate
A cheap rate can turn a 5 day shipment into a 3 week one. Eric shared a story of a truck that arrived with pallets fallen over because the driver had wrecked it a week earlier and never got it fixed.
Weak Inventory Forecasting
A brand plans for 1,000 units in Q4 and sells through by November, leaving nothing to sell for the rest of the season.
Your 30-Day Action Plan
Jason’s assignment for every toy and game brand watching is to audit current fees by SKU, rerun the FBA versus 3PL math every quarter since Amazon’s fees change that often, and flag the point where Amazon’s fees no longer make sense compared to other fulfillment options. Communication matters just as much as the math, since Jason’s own worst experience with a past 3PL was never knowing when a container had arrived, forcing him to call daily during Q4 to avoid stocking out. Eric echoed that a good fulfillment partner should feel like an operator inside the business, not a vendor that disappears after the quote.
Cutting Costs Without Cutting Corners
Skipping a Specialized 3PL
Choosing an ecommerce 3PL that is not built for the work often leads to poor prepping and damaged shipments, which ends up costing more in returns and lost inventory than the savings ever covered.
Chasing the Cheapest Freight Rate
A cheap rate can turn a 5 day shipment into a 3 week one. Eric shared a story of a truck that arrived with pallets fallen over because the driver had wrecked it a week earlier and never got it fixed.
Weak Inventory Forecasting
A brand plans for 1,000 units in Q4 and sells through by November, leaving nothing to sell for the rest of the season.
Your 30-Day Action Plan
Jason’s assignment for every toy and game brand watching is to audit current fees by SKU, rerun the FBA versus 3PL math every quarter since Amazon’s fees change that often, and flag the point where Amazon’s fees no longer make sense compared to other fulfillment options. Communication matters just as much as the math, since Jason’s own worst experience with a past 3PL was never knowing when a container had arrived, forcing him to call daily during Q4 to avoid stocking out. Eric echoed that a good fulfillment partner should feel like an operator inside the business, not a vendor that disappears after the quote.
Frequently Asked Questions
What is landed cost, and why does it matter?
Landed cost is the true price of getting a unit into a customer’s hands, combining manufacturer cost, freight, and duty per unit. Knowing this number lets a brand price and plan inventory without silently losing margin on every sale.
Should a toy or game brand use FBA, a 3PL, or both?
Most brands benefit from using both. FBA works well for a single product with high sell-through, while a 3PL becomes worth the extra cost once a brand adds more SKUs, wants to collect customer data, or needs its own site to build a real audience.
How much inventory should a brand keep in Amazon FBA?
Jason recommends 60 to 90 days of inventory in FBA, and Eric agreed that window fits well since it typically takes about 30 days to restock Amazon from a 3PL.
What is Amazon’s long term storage fee, and how can a brand avoid it?
Amazon charges a long term storage surcharge once inventory sits for more than 180 days, and the fee increases every month after that. The safest way to avoid it is to never ship a full container straight into FBA and to turn off automated AWD replenishment so restocking stays manual and controlled.
Should a brand use Amazon FBA to fulfill a Kickstarter campaign?
No. Kickstarter and crowdfunding orders usually involve bundles, multi packs, and other custom configurations Amazon is not built to handle, so a specialized 3PL is the better fit for that kind of fulfillment.
Final Thoughts: Know Your Numbers Before You Scale
Supply chain math is not glamorous, but it is one of the few things a toy or game brand can control regardless of tariffs, seasonality, or Amazon’s next fee increase. The brands that treat fulfillment as a math problem instead of an afterthought are the ones who keep more of what they earn. Start with one number: your true landed cost. Everything else in this recap, from FBA versus 3PL to inventory planning, builds on getting that number right.
Get a Free Fulfillment Audit
If you are already selling a decent volume on Amazon and have never run a fee audit, Toy Launch offers a free one. Email jasonh@toy-launch.com to get started, and reach out to Eric Chen at eric@mocoshipping.com for a free shipping and fulfillment audit from Moco Logistics.