Amazon Seller Fulfilled Prime: A Comprehensive Guide
Amazon Seller Fulfilled Prime: A Comprehensive Guide for 2023
October 12, 2023November 6th, 2023
Amazon Prime is one of the most popular customer loyalty programs on the Amazon platform, offering fast and free delivery to its members. According to Consumer Intelligence Research Partners (CIRP), in 2022, Prime account holders in the United States spent an average of approximately $1,100 per year on purchases, which was twice as much as regular customers. What does this mean? Considering that a significant portion of Prime subscribers are residents of the United States, it implies that products labeled as 'Prime' attract the most financially capable audience on the marketplace.
Originally, obtaining such a label for your products was only possible through Amazon FBA (Fulfillment by Amazon). However, later on, Amazon introduced an alternative option - Seller Fulfilled Prime (SFP) (Amazon Seller Fulfilled Prime program). This program allows you to obtain the Prime label for your products while maintaining control over the fulfillment process.
The reactivation of registration for Seller Fulfilled Prime from October 1, 2023, has once again made this program accessible and appealing. In this article, we will provide a detailed explanation of what SFP is, how to become part of the program, the benefits it offers, and what you should consider before fulfilling orders independently through Amazon Prime in 2023.
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1. What is Seller Fulfilled Prime?
Seller Fulfilled Prime is a unique program that enables sellers on the Amazon platform (Amazon Seller Fulfilled Prime program) to have full control over the order processing and delivery process for Amazon Prime members. Participation in the SFP program serves as an alternative to Fulfillment by Amazon (FBA) service.
The program was launched in 2015 to attract even more sellers to participate in the Amazon Prime program. In this way, the company aimed to reduce the workload on its own warehouses while increasing the variety of products available on the marketplace, and consequently, the number of Prime subscribers.
However, in 2020, Amazon suspended the registration for the Seller Fulfilled Prime program. This decision was prompted by the program's growing popularity and the need to manage the demand. Until October 2023, anyone who wanted to become a participant in the program could only submit an application and wait for approval to join.
As of October 1, 2023, the company has resumed registration for participation in the SFP program. As of today, you can once again submit an application and, after successfully completing the trial, become a part of Seller Fulfilled Prime. For certain categories of sellers who do not have the capability to store their inventory in Amazon warehouses, this is an excellent opportunity to enjoy all the benefits of Prime and remain competitive on the platform.
2. What benefits does the Seller Fulfilled Prime participant receive?
Amazon Prime offers an excellent opportunity for your business to increase its sales volume. As of today, there are over 200 million Prime members worldwide, with 167 million of them in the United States. When choosing among products with similar features, Prime subscribers are guaranteed to prefer items with fast and free delivery.
Fulfilling orders through FBA can pose difficulties and expenses for certain categories of sellers. For example, companies with well-established delivery systems or sellers of products with specific storage requirements may not find it financially viable to fulfill orders through FBA. For such sellers, Seller Fulfilled Prime is the best solution. Participation in the SFP program comes with a range of other benefits.
2.1. Direct contact with clients
Fulfilling orders independently through Seller Fulfilled Prime provides the opportunity to directly engage with your customers on the Amazon platform. This allows you to better understand and meet customer needs, build stronger relationships with them, and enhance customer loyalty.
2.2. Full control over the order fulfillment process
One of the most significant advantages of Seller Fulfilled Prime is that you retain complete control over order fulfillment. You manage the entire process, from packaging to selecting the delivery company. This allows you to maintain your brand identity and ensure service quality.
2.3. Saving on stock storage
Unlike the FBA program, with SFP, you do not need to pay for the storage of your products in Amazon's warehouses. This can result in significant cost savings, especially if you have a large variety of products.
2.4. Hazmat Products
Not all products classified as Hazardous materials are allowed for storage in FBA warehouses. By fulfilling orders through Seller Fulfilled Prime, you can obtain a Prime badge for these products. The key is to ensure proper storage of the items and safe delivery.
2.5. Tax optimization
In the United States, the sales tax includes the location of storage. The tax rate will depend on the specific state. When using Fulfillment by Amazon, you do not control the storage location of your products. However, with Seller Fulfilled Prime, you can decide where to store your inventory in which state. This is an excellent opportunity to choose a state with more favorable tax conditions and thereby reduce your company's expenses.
2.6. Effective inventory management
SFP sellers can manage their inventory more flexibly and respond quickly to changes in demand. You won't be constrained by warehouse space limitations, as is the case with FBA.
Participating in Seller Fulfilled Prime can help increase sales, save costs, and strengthen your brand's presence on Amazon. However, to successfully realize these benefits, it's important to adhere to the standards and requirements of the SFP program. More on this will be discussed below.
3. Requirement for Seller Fulfilled Prime Participants on the Amazon platform
In order to become a part of Seller Fulfilled Prime and continue to participate successfully, it is essential to strictly adhere to Amazon's requirements. These requirements are aimed at ensuring maximum customer satisfaction and the high reliability of the SFP program. Among them:
3.1. Premium delivery
SFP participants must offer premium delivery options for their products. Convenient and fast delivery helps increase the number of customers and generate more sales.
3.2. Shipment of the goods on the day of receipt of the order
As a Seller Fulfilled Prime participant, you commit to processing and shipping more than 99% of your orders on the same day they are received, ensuring delivery within 1-2 days.
3.3. Nationwide delivery
You must ensure the delivery of standard-sized products within the entire country.
3.4. A low order cancellation rate
Seller Fulfilled Prime sellers must maintain an order cancellation rate of less than 0.5%. This reflects Amazon's assessment of the quality of your products and customer satisfaction.
3.5. Using the Amazon Buy Shipping service
To participate in the SFP program, it is required that at least 99% of all your orders are shipped using the Amazon Buy Shipping service. This service includes the ability to purchase transport labels for shipping items through approved Amazon delivery services, as well as tracking your shipments.
3.6. Execution of orders on weekends
SFP participants must have the capability to ship orders daily, including Saturdays and Sundays.
3.7. Acceptance of Amazon's Refund Policy
Unlike FBA, Seller Fulfilled Prime participants handle returns independently. You are required to agree to and adhere to Amazon's Return Policy. According to this policy, you must provide your customers with the option to return the product within 30 days from the date of purchase. After receiving the return, you must refund the buyer for the purchased item within 2 days.
3.8. Processing Customer Support requests
Seller Fulfilled Prime participants must allow Amazon to handle all customer inquiries directed to customer support.
4. Preparing for Seller Fulfilled Prime: What to Consider?
Seller Fulfilled Prime offers numerous opportunities for growth and increased sales on the Amazon platform. However, this method of order fulfillment is not suitable for every business. Before deciding to fulfill orders independently, it's essential to carefully evaluate several key factors and determine whether your business is capable of handling them.
4.1. Organization of warehouse processes
For self-fulfillment, you need to ensure efficient warehouse management and order processing. This includes packaging, labeling, and timely shipment of products. If you don't have your own warehouse, consider partnering with a reliable third-party logistics (3PL) provider. A trustworthy 3PL partner can ensure fast and quality order fulfillment.
4.2 Seller Fulfilled Prime Costs
Sellers participating in the SFP program are required to bear the full cost of shipping. This can lead to significant expenses, especially when handling a large volume of orders. The shipping cost for some items may even exceed the cost of the products themselves. It's important to analyze your inventory and assess all potential expenses.
The shipping rates for orders within the Seller Fulfilled Prime program will depend on the chosen courier service and the characteristics of the products. You will need to study these factors and select the optimal options for your business.
4.3. Choosing a delivery service
For delivery within the Seller Fulfilled Prime program, Amazon allows the use of only verified and approved carriers. Some of these logistics companies include:
Dynamic Parcel Distribution (DPD)
United Parcel Service (UPS)
Make sure you can ship orders using the above-listed delivery services.
4.4. Trial period
It's important to understand that participation in the Seller Fulfilled Prime program includes a trial with no fixed duration. You will be evaluated based on your ability to meet the standards and fulfill orders on time. Please note that during the trial period, your products will not be marked as Prime.
To become a full-fledged participant in the program, you will need to demonstrate high-quality service from the outset, fulfilling orders on the same day (zero-day handling time).
4.5. Compliance with Prime standards
Participation in the Seller Fulfilled Prime program requires maintaining high customer service standards and meeting all Amazon Prime criteria. Effective and timely communication with customers will help retain them and garner positive reviews. Regular monitoring of order fulfillment and sales analysis will aid in improving processes and optimizing operations.
Amazon aims to maintain a high standard of customer service for Prime members. All the criteria set by the Seller Fulfilled Prime program are crucial for preserving the privileges associated with the Prime badge. If any of the established requirements are not met, Amazon will promptly remove the badge from the seller, which can impact their reputation and success on the platform.
5. Seller Fulfilled Prime: In-House Warehouse or Outsourcing?
The decision to store products in-house provides sellers with complete control over logistics and inventory management processes. However, it also comes with significant financial and time investments in maintaining warehouse infrastructure and logistics. For some sellers, this approach may be a more complex and costly option.
For such sellers, considering outsourced order fulfillment may be a viable option. Collaborating with logistics service providers can allow them to focus on more strategic tasks, freeing them from operational complexities.
3PL partners specialize in order fulfillment and have the expertise required to meet SFP requirements. They know how to provide customers with the best purchasing experience and ensure reliable and timely delivery.
Because Seller Fulfilled Prime sellers cover the shipping costs themselves, partnering with a 3PL can help reduce delivery expenses. 3PL partners have an extensive network of warehouses and access to bulk carrier rates, which can lower the overall cost of Seller Fulfilled Prime shipping rates.
When selecting a 3PL partner, it's crucial to carefully assess their qualifications and experience to maintain a high level of service and meet the standards of the Seller Fulfilled Prime program. Make sure that the 3PL partner collaborates with approved postal operators, in accordance with Amazon's requirement.
Fulfillment-Box offers its own solution for shipping orders through the Seller Fulfilled Prime program. First and foremost, we have an extensive network of warehouses, allowing for inventory distribution to enable fast delivery anywhere.
We collaborate with top delivery services and also provide a special solution for shipping with DHL. To fulfill Prime orders through DHL, you need to be a registered business customer and have the corresponding customer number. Fulfillment-Box provides its own customer number, allowing customers to avoid the need for direct registration with the transportation company. This significantly simplifies and expedites the process of shipping Prime orders.
The decision to join the SFP program should be well-considered. It's important to objectively evaluate its pros and cons to determine whether self-fulfillment of Prime orders is the right choice for you. Remember that participating in Seller Fulfilled Prime requires strict adherence to all Amazon requirements and readiness for a high logistics and customer service workload. Not all sellers are prepared for this challenge.
The program may be too complex for newcomers and not always cost-effective for sellers with certain types of products or limited resources. However, for entrepreneurs who have all the resources to meet the marketplace's high standards, SFP can be a powerful tool for business scaling or cost reduction.
6. Frequently Asked Questions
1. How to Apply for Participation in Seller Fulfilled Prime?
To participate in the SFP program, you should register through Amazon Seller Central.
2. How long does the seller's trial period within SFP last?
The Seller Fulfilled Prime trial does not have a set duration and depends on your effectiveness in fulfilling orders.
3. What commission is charged to participants in the SFP program?
Amazon does not charge a fee for participating in the Seller Fulfilled Prime program.
4. Which courier services can participants in the SFP program use for delivery?
Participants in the Seller Fulfilled Prime program are allowed to use the following carriers: Amazon Shipping, Royal Mail, Yodel, Hermes, DPD, Parcelforce, UPS, and DHL.
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