What is Seller Fulfilled Prime: Pros and Cons + Requirements
In 2015, Amazon launched Seller Fulfilled Prime, allowing high-volume sellers to sell under the Prime label. This program is a good option for those already fulfilling products themselves or through their 3PL.
To be considered for the Small and Light Fulfillment Program, you must have a Professional Seller Account on Amazon.com and qualify for Prime Shipping rates. If Amazon selects your store after reviewing it during their trial period, you will need to meet all of their demands.
Amazon has found that Prime members sell 50% more than non-Prime members, and it is often the only way to control your inventory. It also provides a free return service.
Seller Fulfilled Prime’s Pros and Cons
Seller Fulfilled Prime has pros and cons, so it is essential to understand the reasons for integrating this service.
Cons of Seller Fulfilled Prime
Seller Fulfilled Prime is a great way to sell on Amazon. It gives you the same advantages as an FBA listing but requires meeting specific requirements for your products to be eligible.
For example, for Free 2-Day Shipping, you need to process and deliver the product by 4 PM on the same day. This isn’t easy because not every e-commerce store has the resources for speedy processing or service with their inventory. The more list they have, the less automation there will be to keep up.
Selling on Amazon requires many considerations. One of the most important is that you have to absorb Shipping and return costs, which can be very expensive for small sellers. You will also need warehouses in different locations around the country if you want 2-Day Shipping.
If you spend too much on these, it will not be worth it to do business with Amazon.
Pros of Seller Fulfilled Prime
One of the strong points of SFP is that it can be a powerful tool to reach more customers. Amazon Prime members are now over 80 million, or half of all U.S households, and they spend an average of $1,200 on products annually versus non-Prime members who only spent about $500 in 2015.
If you are not an Amazon Prime seller, customers have no reason to purchase your products. With 2-Day Shipping on all of their items, it’s hard for other sellers to compete.
If you have large or bulky items, the Fulfilment by Amazon program might not be a good option for your business. For example, if you store your products in warehouses, those costs add up with high storage fees. If this happens to you as an online seller, selling SFP could solve that problem.
For sellers using SFP, you control how and when products are returned. If a customer is unhappy with the product they ordered from your Amazon account, that person needs to follow Amazon’s return process within two business days of receiving their order; however, this does not mean that the item will automatically be sent back to them. The seller has an ultimate say in what happens after an item is returned.
If you’re an FBA seller, it’s worth noting that there is no longer a need to split inventory. This means if your warehouse runs out of stock and Amazon still has the product in its location, then sales will not be possible.
Amazon’s FBA program is limited in what it offers to sellers. Amazon does not provide many of the features available with SFP, which may be why so many people choose this option.
Get Started with Seller Fulfilled Prime
When you’re applying for Seller Fulfilled Prime, some things to know. You must meet eligibility requirements and then spread through Amazon before starting the trial period.
Requirements of Seller Fulfilled Prime
There are many requirements to meet to qualify for the SFP.
- Professional Seller Account
- Sellers must have fulfilled a minimum of 30 orders in the last month. They also need to provide tracking information for 94% or more of those transactions, with an on-time delivery rate of over 96% and under 1% cancellation rates.
- Sellers must work with approved shipping carriers, which can pick up orders by 4 PM in the seller’s time zone.
- Over the past 30 days, their feedback has been 4.5 or higher.
To qualify for Premium shipping, you must have a high volume of orders and be willing to ship them quickly.
- The customer must have been a subscriber for at least 90 days to establish an account.
- Orders must be tracked.
- A customer must have an account met or exceeded specific performance metrics (94% tracking accuracy rate, 96% on-time delivery percentage, and 1% cancellation rate).
- To be considered for a sales position, you must have at least ten orders from the previous 30 days.
If you have already qualified for Premium Shipping and fulfilled 30+ orders, then you can apply to become an SFP member.
Apply Seller Fulfilled Prime
- Click on the Prime Shipping button in the shipping section of your template to enable it.
- Enroll items in SFP
- Fulfill orders.
The Trial is a time-sensitive and stringent test. The applicant must fulfill 200+ orders, maintain an on-time shipping rate of 99%, same-day Shipping of 99% while using buy ship services 95% or more often. They also need to keep their cancellation rates at 1%. If they fail the Trial in 90 days (5 months), they have to re-apply.
How to Create an Infrastructure for Seller Fulfilled Prime
SFP is great for most sellers, but it’s not enough if you don’t have the infrastructure to support Amazon SFP requirements and increase order volume.
Shipping out most orders on the same business day is a strict requirement if you don’t have enough staff and resources for this kind of processing.
There are two ways to get Prime 2-day shipping: processing and shipping orders before 4 PM on the day of the order or through automation. To do this with Skubana’s “order bots,” you need a system that processes and ships most tasks automatically, so if an order comes in at 3 PM, for example, it can be shipped out within minutes.
While free shipping is an attractive perk for buyers, it can be expensive to offer this service. For sellers selling high-priced items, the cost of providing a deal on Amazon’s negotiated discount rates may not matter as much. But if you’re in charge of moving your products closer to customers so that they have lower costs when shipping them back home with free delivery deals.
Most small sellers cannot afford to create a warehouse infrastructure covering the entire United States, so they should work with third-party logistics providers. 3PLs reduce costs and enable you to issue automatic return postage forms.
Not recommended is signing with a 3PL that does not have the resources to ship quickly. Please make sure you research them and make your decision wisely.
Increased Order Volume
For every order, there is more work. With tools to automate analytics and paperwork, you can save the cost of investing in something that won’t give a return right away.
Skubana can create automated inventory tracking to remind you when stock is low and generate purchase orders for those items. You can also follow your list across channels to ensure you don’t oversell, which could be devastating if it results in a canceled order.
Selling through the SFP means handling returns and customer service, which gives you more control over your sales process. However, this also requires that you have a bit of infrastructure in place to handle these requests within two business days.
To streamline the process, your customer service team must see where orders are at a glance. When they can quickly tell if an item has been shipped or not and know its status, customers will receive their products faster.
Marketing and Merchandising
Successful selling on Amazon Prime requires a comprehensive approach. The first step is to include high-quality images, descriptions, and videos in your listings using Vendor Central instead of Seller Central.
It is important to consider marketing and merchandising to ensure that customers can see the product’s size and compatibility with other products. This becomes even more important when advertising on sites such as Google because potential buyers often click without paying attention.
Selling Prime through Seller Fulfilled Prime has a lot of advantages, and it can help you reduce costs over Amazon’s fulfillment by lowering their fees. But before you make the switch, take time to calculate your total cost to consider all factors.
SFP can be a good option for sellers, as it is more cost-effective than FBA, and you will likely see an increase in sales. However, if your business does not have the infrastructure to manage SFP or strict management of internal processes, then this could cause problems.
One of the most common questions is what fulfillment method to use. FBM, or Fulfillment by Merchant: You ship your product to a warehouse, and then they fulfill orders for you; SFP (Ship From Place): This service allows merchants with multiple warehouses to consolidate inventory in one location before shipping out their products so that buyers can purchase from other sellers on Amazon as well.; and finally, there’s also the “FBA” option which stands for “fulfillment by amazon.” With this option, you have to send them your items after selling them through your website.