How an SFP Account May Keep Your Business Thriving?

May 14, 2021
Written by Jayce Broda
SFP Account, SFP Seller Account

Aside from a Fulfillment by Amazon (FBA) account, which we can help set up for your Amazon account optimization, you'd want to look into the benefits of acquiring an Amazon Seller Fulfilled Prime (SFP) account to keep your e commerce business thriving during the coronavirus pandemic. 

At the moment, there is no coronavirus treatment available. As the demand for medical items skyrocketed, Amazon released a moratorium. It details the online retail giant's recent decision to bar non-essential items from being stored in its warehouses. Such is the extent of the negative impacts of the pandemic in our lives: businesses have also taken a severe blow.

You may be anxious about how this moratorium will impact your sales. Well, you have the option to wait it out. However, if your business cannot afford to hit a potential slump, then why not consider switching from FBA to SFP?

What is Seller Fulfilled Prime?

Seller Fulfilled Prime is a fulfillment option offered by Amazon to its sellers. When you join this program, the privilege to display the Amazon Prime badge becomes available to you. As a result, you can sell your products to Amazon Prime buyers. But instead of Amazon, you'll be directly in charge of storing and shipping your goods. You'll also be the one to coordinate with your customers.

How can you join Seller Fulfilled Prime?

Qualifications

Currently, Amazon is not accepting applications for this program. However, if you plan on registering once the sign-ups open, these are the requirements you need to meet.

  • You must have an Amazon Professional Seller account.
  • Premium Shipping options must be available to your customers.
  • Not less than 99% of your products must be shipped on time.
  • Your order cancellation rate must be less than 0.5%
  • Amazon Buy Shipping must be the shipping service provider for 99% of your orders.
  • Delivery of SFP orders must be through SFP carriers supported by Amazon.
  • You must agree to and comply with Amazon’s return policy.
  • You must let Amazon deal with all customer service inquiries.

In addition to these, Amazon introduced new requirements, effective February 1, 2021. These include the following:

  • All of your Amazon Prime offers must be available nationwide.
  • You must promise one-day delivery for at least 20% of your products and two-day delivery for at least 55% of your products.
  • You must include one day in the weekend to ship Amazon orders.

Getting Started

Before you can become a full-fledged Amazon SFP seller, you need to undergo a trial period. It can be as short as 5 days or as long as 90 days, depending on your performance in terms of delivery speed and cancellation rate, among other things. Once you pass the trial, Amazon will give you your Prime badge.

Here’s how the enrollment process goes.

  1. Go to the Seller Fulfilled Prime website and register.
  2. Go to the Prime Shipping Template and enable Prime Shipping.
  3. Add the SKUs you want to offer.
  4. Comply with the shipping and delivery targets throughout your trial period.
Amazon FBA Seller

How is Amazon SFP (Seller Fulfilled Prime) better than FBA?

You may find it cost-effective to switch to Seller Fulfilled Prime. Find out if switching to Amazon SFP is the best option for your business. Go over its advantages and disadvantages enumerated below.

The Prime badge entitles you to sell products to Amazon Prime members.

This huge advantage is accessible to both FBA and Seller Fulfilled Prime sellers. With a Prime badge, they have the opportunity to sell their products to over 200 million customers.

A Prime customer pays for fast and convenient shipping of their orders. Having a Prime badge tells them that the fulfillment and delivery of their items can happen in as early as two hours. What's more, you'll do this for free and without any hassle, which non Prime orders can't enjoy. If you can address their need for convenience, it can be an advantage for you. Before you know it, the millions of visitors on your product page have turned into millions of sure buyers.

You can store your products in your own or a third-party warehouse.

In the FBA program, Amazon takes care of everything—from picking up your products to delivering them to your customers’ doorsteps and everything in between, including packing and providing customer service. That is why it’s a convenient fulfillment option for many online sellers. 

The downside of FBA is that it gets in the way of multichannel selling. Since your inventory is beholden to Amazon, you miss the chance to capture customers in other e-commerce platforms.

On the other hand, in the Seller Fulfilled Prime program, it’s your warehouse and your rules. Alternatively, if you outsource your warehousing and fulfillment to a third-party logistics (3PL) company, they will adjust the space and scale of their operations depending on your needs.

Because you don't use the FBA warehouse, you’re saved from paying steep storage fees.

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. For another, letting Amazon handle your inventory when it goes stale or when business is slow is not practical. Why? Because inventory 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 a lot more work, at least you are not buried under the weight of these hefty fees. Your profit margin increases, too, as a result.

You focus solely on the inventory stored in your chosen warehouses.

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 own website. In case you really need them back, you can always recall them from Amazon.

Of course, this wouldn’t be a problem in the first place if you store your stock in your warehouse. Because Seller Fulfilled Prime lets you do this, you have total control over your inventory. It’s particularly advantageous if you have a physical store, if you are active on other e-commerce platforms, and if you’re expecting a deluge of orders from a sales event.

Your chances of winning the “Buy Box” increase.

Did you know that an Amazon seller has to compete to get the Buy Box feature on their product page? Customers know the Buy Box feature by the term Add to Basket. Winning the Buy Box depends on your performance in 14 areas, the second most important of which is the fulfillment method.

If you are a Seller Fulfilled Prime Amazon seller, you have priority over Fulfillment by Merchant sellers because you offer premium shipping services. Fulfillment by Amazon sellers also enjoy this advantage.

amazon marketing company

Customers who order from you enjoy quick delivery speed, which helps boost your brand's reputation.

Customers who get their orders fast are happy customers. In turn, happy customers become loyal customers. 3PL provider Dotcom Distribution found this in a 2016 study.

Data from their study showed that for 87% of the 558 people they interviewed, delivery speed influenced their customer experience. About 67% of them indicated a willingness to pay more for same-day delivery of packages needed at a specific time. Furthermore, 47% would also pay for same-day delivery just because they want to get their hands on their package fast.

A few cons

No program is not without its disadvantages. Here are some areas where Seller Fulfilled Prime falls short.

  • Offering free two-day shipping to your buyers means that, one, you will be responsible for paying their orders' shipping fees, and, two, you will have the added stress of fulfilling your promise of a quick delivery.
  • Since you need to buy your packing slips from Amazon, you have to access Amazon and go through the process. If your system is not directly integrated with the platform's API, this may prove tedious.
  • You have to see to it that your distribution center can meet the shipping targets imposed by Amazon. Failure to do so can cost you your Prime badge. Some sellers have reported negative profits and quit SFP.

In a nutshell

Amazon declared the moratorium on non-essential items in light of the high demand for medical supplies and household goods. From March 17 until April 5 last year, it focused on storing these products in its warehouses. The only non-essential goods exempted from this were those that were being shipped to the facilities at the time of the moratorium.

Although this mandate lasted less than a month, this situation became problematic for some FBA sellers, particularly those with non-essential inventories. Lucky for you, you have the option to switch accounts. If you want to appeal to Amazon Prime customers, a Seller Fulfilled Prime account may be your best bet. Otherwise, you may consider looking into Fulfillment by Merchant. We can handle everything from warehousing, fulfillment, and logistics for you with our Amazon FBA wholesale partnership program.

To better understand which option works best for your business, do not hesitate to rely on the expertise of a highly experienced Amazon account manager who can help you navigate your situation. Henceforth, they will serve as your guide in making an informed decision.

Not yet connected to an account manager? Do not miss out on the benefits of working with an Amazon specialist. Enquire with us by emailing Jayce at [email protected] now.

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