Unlock the Vast Potential of Amazon Seller Fulfilled Prime for Your Business
As an experienced Amazon seller, I‘m often asked – should I consider Seller Fulfilled Prime?
My answer? Absolutely.
While Fulfillment by Amazon (FBA) is a popular option, Seller Fulfilled Prime (SFP) opens up enormous potential for your ecommerce business if leveraged correctly.
In this comprehensive guide, I‘ll share insider tips to help you unlock the benefits of SFP based on my decade of selling successfully on Amazon. Read on to learn how SFP can accelerate your sales and profits.
What Makes Amazon Seller Fulfilled Prime So Appealing?
On the surface, SFP allows you to ship Amazon orders yourself while displaying the Prime badge. But dig deeper, and you‘ll discover why SFP is worth exploring:
Access to Amazon‘s 200+ Million Prime Subscribers
The Prime badge gives you exclusive access to a hyper-loyal customer base. Amazon has over 200 million Prime members worldwide who spend an average of $1400 annually, compared to $600 for non-members.
That‘s up to 2.3x higher spending power in the world‘s largest online marketplace!
These subscribers pay for conveniences like free fast shipping. According to surveys, 41% of online shoppers willingly pay extra for same-day delivery. SFP allows you to cater to this demand.
Avoid Large FBA Fees
With FBA, Amazon charges monthly storage and fulfillment fees that quickly eat into margins, especially for slower-selling inventory.
SFP lets you bypass these variable costs. While you take on shipping expenses, you keep more of the profit. This advantage only grows as your catalog expands.
Maintain Control Over Inventory
Once products go to Amazon‘s warehouses, they can be hard to retrieve, reallocate, or run promotions with.
But with SFP, you retain full control for omni-channel selling. For example, you can:
- Pull inventory for flash sales on other platforms
- Easily ship wholesale/B2B orders
- Perform cycle counts and audits
- React faster to any handling issues
This flexibility is invaluable as you diversify sales channels.
Provide Personalized Customer Service
Amazon handles all communications when using FBA. But with SFP, you can deliver tailored service with product expertise that builds loyalty.
According to surveys, 73% of customers say friendly, knowledgeable service is very important when choosing brands. SFP lets you differentiate through stellar support.
Improve Shipping Times
Seasoned sellers using SFP report faster delivery from their own warehouses versus Amazon fulfillment centers.
This directly strengthens your brand reputation. Research shows:
- 72% of customers will pay more for faster shipping speeds
- 40% have higher brand loyalty with quick fulfillment
By mastering logistics, SFP provides a competitive edge.
How Does Seller Fulfilled Prime Work?
With Seller Fulfilled Prime, you handle picking, packing, and shipping Amazon orders yourself from your own or third-party facilities.
To qualify, you must meet performance criteria around:
- On-time ship rate (99%+)
- Order cancellation rate (<0.5%)
- Customer support responsiveness
- Nationwide delivery coverage
- Weekend pickup/delivery options
Once approved after a trial period, eligible ASINs will automatically enroll and display the Prime badge. Amazon will monitor your ongoing metrics. Consistently failing to meet standards risks your SFP privileges being revoked.
It's challenging, but generous Prime demand awaits those who master SFP logistics.
SFP vs FBA: How Do They Compare?
Here‘s a quick pros and cons overview of Seller Fulfilled Prime (SFP) compared to Fulfillment by Amazon (FBA):
As you can see, SFP provides greater control over your ecommerce operations if you can handle the workload.
What Are the Requirements to Join Seller Fulfilled Prime?
To qualify for Seller Fulfilled Prime, sellers must meet these minimum requirements:
- Professional seller account in good standing
At least 99% on-time shipment rate
Under 0.5% order cancellation rate
Use Amazon Buy Shipping for 99%+ of orders
Offer weekend delivery pickup
Let Amazon handle customer communications
Nationwide shipping coverage
1-day delivery on 20% of products, 2-day on 55%
Premium carriers like UPS, FedEx for tracking and speed
On top of this, Amazon currently has an SFP waitlist for new merchants. Once accepted, you undergo a 30 to 90 day trial period to prove your logistics operations meet the above criteria.
Consistency is key – fail to hit Prime targets, and you risk losing qualifications. It‘s challenging but possible with the right preparations.
How to Successfully Manage Logistics for Seller Fulfilled Prime
Handling your own fast order fulfillment for SFP takes diligence. Follow these tips to maximize success:
Choose SFP-Approved Carriers
Work with integrated carriers like UPS and FedEx who offer fast transit times and weekend pickup/delivery. Avoid slower, cheaper shipping methods that will lead to misses.
Optimize Inventory Management
Carefully organize warehouse layouts, storage bins, and inventory slots to improve picking accuracy. Conduct regular cycle counts to fix discrepancies.
Implement scan-based tracking systems to monitor stock in real-time. This visibility is key for fast order processing.
Refine Packaging and Preparation
Invest in high-quality, right-sized packaging to protect products and save on materials. Standardize box sizes to speed up fulfillment.
Stage all packing supplies for seamless order processing. Precut tape strips, stock fill materials like bubble wrap, and line pack stations.
Automate Processing with Amazon API Integration
Link your order management platform directly to Amazon‘s API. This allows seamless label printing, inventory syncing, and shipment tracking.
No manual uploading or downloading files. The time saved really maximizes your SFP potential.
Closely Track Key Performance Indicators (KPIs)
Monitor critical SFP metrics daily like on-time ship rate, cancellation rate, customer contacts, and defects. Dive into the data to catch any drops or inconsistencies quickly.
Amazon provides weekly SFP reports – review them to spot early warning signs and make proactive improvements.
Consider Supplemental 3PL Support
Even large sellers lean on experienced third-party logistics (3PLs) help to supplement labor and warehouse capacity.
3PLs can provide overflow assistance during peak periods so you avoid SFP failures. Just ensure excellent communication and coordination.
Master these fulfillment best practices, and your business can thrive under the pressures of Seller Fulfilled Prime.
What Are the Biggest Risks of Seller Fulfilled Prime?
However, SFP does come with notable downsides to factor in:
Fulfilling Orders In-House Adds Workload
You take on all the physical labor and coordination of picking, packing and shipping. This can strain infrastructure and staffing if not prepared.
Building out warehouse space, materials, and teams requires significant investment. Costs add up quickly.
More Opportunity for Shipping Delays or Issues
With FBA, Amazon has established processes to meet Prime standards at massive scale. But handling logistics yourself opens up more potential for hiccups.
For example, weather delays, inventory inaccuracies, staffing problems, or carrier pick-up misses can quickly cascade. Suddenly your Prime metrics drop below standard.
Consistently Maintaining Standards is Challenging
The standards for SFP are strict for a reason – to protect Prime member‘s expectations. But even brief disruptions or performance drops can threaten your status.
For example, one seller I spoke with had 99.3% on-time rate for a month after staffing challenges. They then lost Prime privileges for 4 months and had to requalify.
Costly Returns and Refunds are Your Responsibility
With FBA, Amazon handles all customer returns and refunds. But with SFP, you own the whole process.
Returns eat into profits. And if mishandled, they can prompt negative reviews that hurt sales. Managing returns is an art itself.
Consider the added risks and overhead before pursuing Seller Fulfilled Prime. The standards only get higher over time.
Should You Consider Amazon Seller Fulfilled Prime?
SFP provides a lucrative opportunity for established sellers prepared to take ownership over fast shipping. But it requires serious investments into infrastructure, labor, and rigorous processes to succeed long-term.
Weigh the pros and cons carefully for your business. For newer sellers, FBA may be better suited to being with.
Regardless, focus on building diverse revenue channels beyond just Amazon. And leverage data to keep improving customer experience and profitability.
With the right foundation, Seller Fulfilled Prime can become a pillar of your larger ecommerce strategy. Just ensure you have the resources and discipline needed to unlock its full potential.
To discuss more, feel free to reach out. I enjoy helping fellow sellers navigate decisions like SFP vs FBA. My team and I have the experience to provide insider tips that work. Wishing you continued success!