Amazon can be a great tool for selling your product and reaching a new, exclusive audience. There are several different options for ecommerce fulfillment types when you sign up to be an Amazon shipper, including Fulfillment by Amazon (FBA), Fulfilled by Merchant (FBM), Amazon Seller Fulfilled Prime (SFP), and more. These options allow you to choose the most relevant solution for your business.
SFP allows qualified retailers to sell directly to Amazon Prime members while fulfilling their own orders, storing their own inventory and taking ownership of ecommerce returns management. This fulfillment method can be less expensive than FBA, where Amazon stores your inventory, and it can allow you to reach a larger audience than you can with FBM. However, it also means that you must meet strict seller requirements. At ITS, we know that it can be difficult to keep up with these complicated seller fulfilled prime requirements, that’s why we specialize in SFP as one of our Amazon shipping options.
Is Amazon Seller Fulfilled Prime Right for your Business?
There are many factors to consider when deciding whether Amazon seller fulfilled prime is the right choice for your business. SFP can be a great fit for some businesses, but we understand that it can be hard to decipher if it is the right choice for your own. One thing you must take into consideration is that in order to be an Amazon seller fulfilled prime shipper you must offer free two-day shipping. This means you need to absorb the shipping and returns costs, which can be substantial. You need to consider that without proper planning, you are at risk for spending too much on shipping and may not have the resources to handle the increased volume of prime orders at the speed required by Amazon.
If you sell heavy and bulky products, SFP can be a good choice as it allows you to earn higher profits on these items. This is because part of the cost of FBA is monthly storage fees that are based on a price per cubic foot, and there are extra charges for oversized items. Storing your own items and fulfilling your own orders as an SFP seller can save you money, especially on large items. One of the greatest advantages of SFP is gaining access to the Amazon Prime audience, approximately 105 million Americans as of June 2019. This large group of potential customers are more likely to buy more, buy often and subscribe to your products. They are also unlikely to make a purchase from non-prime sellers, especially when they can get a similar product from a prime seller. The types of products you sell, volume of shipments, warehouse locations, capacity of said warehouses, and your ability to quickly and efficiently fulfill orders are a few things you need to take into consideration when deciding whether or not to become an SFP shipper.
One of the greatest advantages of SFP is gaining access to the Amazon Prime audience, approximately 105 million Americans as of June 2019. This large group of potential customers are more likely to buy more, buy often and subscribe to your products. They are also unlikely to make a purchase from non-prime sellers, especially when they can get a similar product from a prime seller.
Seller Fulfilled Prime Requirements
In order to become an SFP seller, you first have to qualify and commit to follow Amazon’s seller fulfilled prime requirements, which are more complicated than the rest of the seller options. The qualification process requires you to prove to Amazon that you can meet and maintain their standards through a 300-order prime trial. Once you pass the trial period, you are automatically enrolled as an SFP shipper, but only as long as you continue to maintain these standards. The requirements include:
- Provide premium shipping options for customers, such as next day or two-day shipping
- Ship over 99 percent of your orders on time
- Have an order cancellation rate of less than 0.5 percent
- Use Amazon Buy Shipping Services for 98.5 percent of your orders
- Deliver orders using supported SFP carriers
- Agree to the Amazon Returns Policy
- Allow Amazon to handle all customer service through their normal channels
Amazon has set these strict requirements in order to ensure they maintain their high levels of customer satisfaction. Over time, they have become increasingly more difficult, making it hard for sellers to adhere to them. Because of this, it’s very important to have your fulfillment center prepared for the massive influx of orders, the need to fulfill orders quickly to ship them on time, and the extra cost of free two-day shipping. Sellers who cannot consistently meet the requirements will lose their Prime status. It can be intimidating to meet these requirements, but when you work with ITS Logistics, you have much less to worry about—our team members are experts in Amazon seller fulfilled prime shipping.
Amazon Order Fulfillment Process with SFP
Amazon seller fulfilled prime allows third party sellers (anyone outside of Amazon) to ship Prime orders directly to customers from their own warehouses. When you are an SFP shipper, it means you must process and ship your orders quickly to stay in compliance with the requirements. With SFP, your fulfillment process would look something like this:
Upon receiving orders, you process them quickly and purchase the appropriate shipping labels from approved carriers. This can be done through Amazon’s Buy Shipping Services, which allow you to purchase shipping labels individually or in bulk, and track your shipments. Then, orders are picked, packed and shipped the same day from your warehouse (or you 3PL’s warehouse). Pre-approved SFP carriers then pick up and deliver the orders within two days to the customers. Because of the prime program’s expectation of two-day shipping (or even one day shipping), the sense of urgency for quick order processing and shipping is much greater.
Getting Started with Amazon Seller Fulfilled Prime
Becoming an SFP seller and keeping up with the constantly changing requirements might seem overwhelming. At ITS, we are highly experienced in Amazon seller fulfilled prime and we understand how to help our customers take on the increase in business and appropriately manage the volume of product and inventory needs. Our supply chain experts know how to make the seller fulfilled prime cost advantageous for your business by designing an efficient process and handling the small details, which allows you to focus on your business.
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