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 Amazon fulfillment options allow you to choose the most relevant solution for your business.
SFP is a shipping option that allows qualified retailers to sell directly to Amazon Prime customers 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 inventory is stored in an Amazon warehouse, and it can allow you to reach a larger audience than you can as an FBM seller. 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, which is 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 you. 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 cost 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 delivery speed targets 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 FBA fees comes from the monthly storage fee per item that is 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 200 million Americans as of August 2021. This large group of potential customers are more likely to buy more, buy often and subscribe to your prime products. They are also unlikely to make a purchase from sellers who don’t have the prime badge, 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 key factors 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 member audience, approximately 200 million Americans as of August 2021. 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 have to qualify and commit to following Amazon’s seller fulfilled prime eligibility 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 by successfully fulfilling 300 Prime trial orders. 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 SFP requirements include:
- Provide premium shipping options for customers, such as next day or two-day shipping service
- 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 SFP orders
- Deliver each prime order 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 and consequently their Amazon prime badge. It can be intimidating to meet these requirements, but when you work with ITS Logistics, we’ll handle it all for you—our team members are experts in Amazon seller fulfilled prime shipping.
Amazon Order Fulfillment Process with SFP
Amazon seller fulfilled prime allows a third party seller (anyone outside of Amazon) to ship Amazon 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 and meet the Amazon Prime delivery promise. 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 through seller central, which allows you to purchase shipping labels individually or in bulk, and track your shipments and delivery speed metrics. Then, orders are picked, packed and shipped the same day from your warehouse (or you 3PL’s warehouse). A pre-approved Prime carrier will 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) with nationwide delivery coverage, 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 can 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 consistently changing inventory needs. Our supply chain experts know that Amazon is a very important sales channel for many businesses and take extra steps to ensure that Seller Fulfilled Prime is successful for your business by designing an efficient process, meeting all Amazon requirements and handling all the small details, which allows you to focus on other aspects of your business.
Learn more about Ecommerce Fulfillment Solutions from ITS Logistics:
Fulfillment & Distribution Case Studies
Learn how we’ve tapped our vast partner network to solve logistics problems for clients.