Amazon Seller Fulfilled Prime (SFP) comes with a lot of great benefits. For brands that have mastered fulfillment it offers an easy way to boost sales. But it comes with some pretty stringent rules and requirements too. Here's everything you need to know before deciding to sign your brand up.
What is Amazon's Seller Fulfilled Prime?
Seller Fulfilled Prime is a program that allows companies to receive the Amazon Prime badge and offer two-day shipping to Amazon customers while storing inventory and fulfilling orders in their own warehouses.
In the past brands that wanted access to the Amazon Prime badge and its perks had to use Amazon's fulfillment services. But as its warehouses reached capacity Amazon had to find a new way to offer fast fulfillment and shipping to its customers. As a result it launched SFP in 2015.
The program has attracted many brands that run their own fulfillment.
What are the requirements for Seller Fulfilled Prime?
Seller Fulfilled Prime comes with lots of benefits. But brands that want to join the program need to follow some very stringent rules too.
SFP is only available to those that have top performance metrics on their Amazon account. They must also be willing to hand over some control of their marketplace policies to Amazon.
1. You need to play by Amazon's rules
Brands that sign up for Amazon Seller Prime have to relinquish some control to Amazon by:
- Agreeing and adhering to its returns policy
- Letting Amazon handle customer service
- Finding approved carriers through Amazon's Buy Shipping service for at least 99% of SFP orders
2. You must meet Amazon's performance requirements
To be considered for Amazon's Seller Fulfilled Prime programme your Amazon account will need to have a proven track record of reliable service. This means:
- Over 99% of orders must have shipped on time
- Your order cancellation rate needs to be less than 0.5%
3. You have to complete an Amazon SFP trial period
To join the Amazon SFP program brands also need to prove that they can meet future expectations.
During a trial period they need to demonstrate that they can meet Amazon Prime's two-day delivery promise. This means:
- Orders must be picked packed and shipped on the same day
- Orders need to be collected and delivered by an Amazon approved carrier within one or two days
These rules even apply to orders placed on Saturdays and Sundays.
During the trial the Prime badge won't be shown on products so customers won't expect super fast delivery. Instead it's all about proving to Amazon that you can process orders the same day that customers place them.
To succeed your Amazon account needs to meet the Seller Fulfilled Prime requirements for at least 50 orders. You have up to 90 days to reach the required number of trial orders. If you complete the trial successfully an Amazon Prime badge will automatically appear on the product enrolled for SFP.
The benefits of Seller Fulfilled Prime
So is Seller Fulfilled Prime worth all this effort? Here is what you stand to gain from qualifying for the programme:
1. Access to a wider audience
Amazon has over 150 million Prime members worldwide who pay a flat annual fee to receive free two-day delivery on their orders.
Fast free and reliable delivery is a big selling point for these shoppers so products that display the Prime badge attract a lot more clicks and sales. They can even filter search results so that only Prime products are displayed.
2. Increased visibility
On Amazon brands have to contend with competitors as well as third-party sellers that sell their products.
While Amazon's Brand Registry can help brands protect their intellectual property there is no way to prevent competition from legitimate third-party vendors. The best way to outdo them all is to earn a spot in Amazon's lucrative Buy Box position. The white box which appears on product pages prompts most of the sales made on Amazon and Seller Fulfilled Prime listings have a better chance of appearing here.
3. It can save money
Amazon sellers can also gain access to the Amazon Prime badge by signing up to Amazon's fulfillment services. But for many big brands this isn't a sensible option because they already have storage and fulfillment operations in place.
By using existing infrastructure to fulfil Amazon orders these brands can avoid Amazon's fulfillment fees which are particularly hefty for businesses that sell bulky products or require long-term storage.
By being in control of the process brands can find other opportunities to reduce cost too.
4. You retain control over your inventory
Brands also have better oversight of their stock levels when they retain control over order fulfillment.
This allows them to manage omnichannel sales from one location. They don't have to stress about getting products to Amazon's fulfillment canters before stock runs out either.
They can also use their own inventory monitoring software to run reports discover insights and find ways to manage stock more effectively.
5. It opens up other options
If a brand can meet the demands that come with Amazon's Seller Fulfilled Prime requirements the chances are they'll also be eligible for other fast shipping program like eBay's Fast & Free or Walmart's 2-Day shipping.
The drawbacks of Seller Fulfilled Prime
Offering free two-day delivery to all Prime customers is a big commitment which can require a lot of investment. So before signing up here are the downsides that you should know about.
1. You have to keep extremely strict standards
If a seller's performance drops or if they fail to meet any of the above Seller Fulfilled Prime requirements SFP status will quickly be stripped away.
The internet is full of stories from sellers who lost their Prime badge for a month - or even permanently - because their on-time shipment rate dipped just below 99%. This would be pretty disastrous for any business that invested money in fulfillment in order to qualify for Amazon SFP.
2. Seller Fulfilled Prime pushes up costs
Businesses that need to obtain the Prime badge can avoid Amazon's fulfillment and storage fees by going the Seller Fulfilled Prime route. But this will cost a lot more than offering standard non-Prime shipping options.
The cost of paying warehouse employees to work weekend shifts adds up. Two-day shipping cost a lot more than slower delivery methods too.
3. Amazon controls communications and shipping policies
Being part of Amazon SFP means handing over customer service operations to Amazon. This can be a problem for brands that take pride in their customer experience.
Sellers also need to adhere to Amazon Prime's free two-day shipping promise. This may pressure brands to offer the same standards on their D2C platforms in order to stay competitive.
Beyond this Amazon can unexpectedly change the rules sometimes too. For example in the past brands using Amazon SFP could make two-day Prime shipping available in specific regions. They could serve Prime customers near their warehouses where fast delivery was guaranteed. But Amazon recently changed this and now everyone on the Seller Fulfilled Prime program must offer two-day delivery nationwide.
What are the differences between SFP and FBA?
Amazon's fulfillment service has been mentioned a couple of times already. The official name for this service is Fulfillment by Amazon - or FBA for short.
Brands that choose FBA ship their products in bulk to Amazon's fulfillment canters. Then Amazon staff pick pack and ship these products as individual orders come in.
This option sees Amazon take care of fulfillment and returns. So instead of worrying about the various Seller Fulfilled Prime requirements brands just sign up to FBA and Amazon takes care of the rest.
This option comes with some of the same benefits as Amazon Seller Prime. There's a boost in visibility and sales thanks to the Amazon Prime badge. Buy Box performance improves too. But sellers also have to deal with extra shipping costs non-negotiable service fees and storage fees that increase during the holiday season. Orders are sent out in off-brand packaging too.
Amazon SFP on the other hand is about storing products and processing orders in your own warehouse - or another third-party facility that doesn't belong to Amazon. This makes sense for brands that already have fulfilment in place. It's also ideal for selling products like food which aren't eligible for FBA.
Amazon SFP is a great way for established brands to boost sales. But it's a good idea to test it out with a few product lines before committing to the program fully.
However brands that want to take advantage of Seller Fulfilled Prime will have to wait a while. Registration is on hold for now but sellers can add their name to Amazon's waiting list. In the meantime they can work on perfecting their performance metrics and arranging same-day order processing.
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