Last updated on June 20th, 2023
Written by Himanshi Raj
If you're unsure or unsatisfied with Fulfillment by Amazon (FBA), you'd want to look into the benefits of Amazon Seller Fulfilled Prime (SFP). In a constantly changing environment like ecommerce, it always makes sense to diversify how you do business.
Among the options available, Amazon SFP can play a pivotal role in ensuring your business thrives in the dynamic market. If your business cannot afford to hit potential slumps and economic setbacks, why not consider switching from FBA to Amazon SFP? We'll tell you why and how in this article.
Seller Fulfilled Prime is a fulfillment option offered by Amazon for third-party sellers who want to sell with the Amazon Prime badge straight from your warehouse. With SFP, you have the freedom to choose premium shipping solutions and have full control of your inventory and order fulfillment.
Amazon Seller Fulfilled Prime is only one of the two ways to sell on Prime. There is also FBA, which you may have initially considered. So why consider SFP as a good alternative? Here are some reasons SFP may be a better option for your business:
With a Prime badge, you can sell your products to over 200 million buyers. This badge indicates that you're qualified to provide fast and convenient shipping of their orders. Prime customers expect fulfillment and delivery to happen within 1-2 days.
What's more, they are eligible for free shipping, which non-Prime orders can't enjoy. If you can address your Prime customers’ need for convenience this way, SFP can be a massive advantage for you. Before you know it, the millions of visitors on your product page will convert into sure buyers.
In the FBA program, Amazon takes care of everything—from packing and picking up your products, delivering them to your customer's doorsteps, and providing customer service.
It's a convenient fulfillment option for many online sellers, but there's a downside: you have zero control over your inventory once you ship them to an Amazon fulfillment center. Your stock can suffer accidental handling damages, which may be subject to reimbursements from Amazon.
But with the Amazon Seller Fulfilled Prime program, it's your own warehouse and, therefore, your rules. You can do the entire order fulfillment process yourself or employ reliable and experienced staff to do this for you. With your direct involvement or knowledge of the product, you can also provide a more helpful and personalized customer service experience.
Amazon FBA sellers think they can just sit back and relax as Amazon does everything for them. They could not be more wrong. Of course, such convenience comes at a cost. And if they are not careful, they will be spending more on FBA than profiting from it.
For one, FBA fees are subject to change at any time. Letting Amazon handle your inventory when it goes stale, or business is slow is impractical. Why? Because stock sitting in their fulfillment center for longer than six months incurs a long-term storage fee.
Storage fees are the least of Amazon SFP retailers' worries. Although fulfilling orders independently is much more work on your part, you don’t have to pay fees for storage, upkeep, and fulfillment. Your profit margin also increases as a result.
Your control over your inventory depends on where you're storing them. Sending them to Amazon's warehouses means you have nothing to pull from when you want to sell on another channel or run flash sales on your website. If you need them back, you can always recall them from Amazon, but fees apply.
This wouldn't be a problem in the first place if you store your stock in your own warehouse. It's particularly advantageous if you have a physical store, are active on other e-commerce platforms, and are expecting an influx of orders from a sales event.
Did you know that Amazon sellers have to compete to get the Buy Box feature on their product page? Winning the Buy Box depends on your performance in 14 areas—the second most important is the fulfillment method.
|About the Buy Box
The Buy Box is that prominent white box on the right side of Amazon's product detail page. It presents the buyer with what the platform considers the best deal but is not necessarily the cheapest option. It distinguishes a product from the rest, addressing the issue of overwhelming choices for buyers.
Not all sellers are eligible to win the Buy Box, and you also have to compete for it.
If you are a Seller Fulfilled Prime Amazon seller, you have priority over Fulfillment by Merchant sellers because of premium shipping services. FBA sellers also enjoy this advantage.
Customers who get their orders fast are happy customers. In turn, happy customers become loyal customers. Some studies prove this:
No program is not without its disadvantages. Here are some areas where Seller Fulfilled Prime needs to catch up:
Offering free two-day shipping to your buyers means that (1) you will be responsible for paying their shipping fees, and (2) you will have the added stress of fulfilling your promise of quick delivery.
Since you need to buy your packing slips from Amazon, you must access Amazon and go through the process. This may prove tedious if your system is not directly integrated with the platform's API.
You have to see to it that your warehouse and self-fulfillment processes can meet the shipping targets imposed by Amazon. Failure to do so can cost you your Prime badge. Some sellers have reported negative profits, forcing them to quit SFP.
Applying for SFP includes sitting on a waitlist and undergoing a Prime trial period to prove that you meet the requirements. During this period, your products will not have a Prime badge yet. Only when you pass will the Prime badge be shown on your enrolled ASINs, and you'll be automatically registered in SFP.
FBA has the upper hand in this aspect. Once enrolled in the program, you're automatically eligible for Amazon Prime. There's no need for a waiting list or a trial period. Amazon also shoulders the burden of one or two-day free shipping, but it comes with a price (and a hefty one, that is).
If you finally decide to sell on Amazon SFP, here are the requirements:
Currently, Amazon is not accepting new registrations for this program. However, a waitlist is open for those interested to join. So if you plan on registering once the sign-ups open, these requirements must be met.
As mentioned, you must go through a trial period before becoming a full-fledged Amazon SFP seller. Depending on your performance, it can be as short as five days or as long as 90 days. Among other things, the platform looks at the delivery speed, tracking rate, and cancellation rate.
Once you pass this trial, Amazon will automatically enroll you in the SFP program and give your enrolled ASINs your Amazon Prime badge.
Whether you're an Amazon SFP or Amazon FBA seller, here are other reasons for selling on Amazon Prime that can drastically change the course of your ecommerce journey.
On Amazon Prime, customers voluntarily come to you rather than the other way around. Prime members are loyal members of the Amazon marketplace. That's because they get to enjoy these perks:
Prime offers FREE and FAST shipping services for qualified purchases. It offers one- and two-day shipping on eligible orders. Prime subscribers can also get two-hour delivery for free if their zip code is included in the Prime Now list.
Regarding specific rates, Amazon allows shipping for as low as $7.99 per item every Saturday. For standard shipping, the waiting period is only 4 to 5 business days.
Prime users can enjoy unlimited movies, TV episodes, and music streaming. They may access Amazon Channels like HBO, SHOWTIME, and STARZ. It also has Twitch Prime, which is perfect for avid gamers.
Prime subscribers who love to read can borrow various reading materials from the Prime Reading catalog. They also get early access to download new books for free every month.
As an Amazon seller, you will have exclusive access to Prime's ready-to-buy customer base, which possesses high purchasing power, thanks to the rewards buyers can avail of for their membership.
Amazon does the marketing for you. When you visit Amazon Prime's website, its homepage displays all the benefits its subscribers can enjoy. There is also the lure of free and speedy delivery service.
Besides having strong purchasing power, Prime subscribers are willing to pay more. They have no qualms about spending a monthly membership fee of $14.99 or an annual fee of $139. On average, Prime members spend $1400 on Amazon yearly, twice that of non-Prime members.
You will have a chance to win the Buy Box by default.
If you want to appeal to Amazon Prime customers and have flexible shipping options to withstand ecommerce challenges, a Seller Fulfilled Prime account may be your best bet. By leveraging the SFP program, you can tap into a vast customer base that wants fast and reliable shipping.
Additionally, Amazon SFP gives you control over your fulfillment process while meeting Prime standards. Living up to the platform's and customers' expectations can increase your brand's visibility, engagement, credibility, customer trust, and business growth.
Undoubtedly, Amazon Seller Fulfilled Prime (SFP) offers a strategic advantage in securing your business's success on the dynamic platform. With Amazon Prime having every benefit you could ever want as a seller, it's now up to you to push your products on the market!
If you've decided to continue using or exploring the FBA program, you can always rely on professionals from Seller Interactive. We can handle everything, such as Seller Central account management, warehousing, fulfillment, and logistics for you with our Amazon FBA wholesale partnership program.
To better understand which option works best for your business, feel free to leverage the expertise of our highly experienced Amazon account managers, who can help you navigate your situation.
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