Amazon is one of the world’s largest online marketplaces, home to 350+ million products, 25+ million third-party sellers, and generating billions in revenue each year. It’s also one of the most trusted online stores, thanks to factors such as Amazon’s product and seller review system, high standards for even third-party sellers, and dedication to fast shipping across their marketplace.
As a result, it’s one of the best marketplaces for sellers to start on, giving even small brands a platform to scale rapidly by reaching millions of potential consumers who mostly trust Amazon’s quality guidelines when buying on the site.
Many of these sellers also have access to Prime, Amazon’s subscription program offering free shipping and extras to consumers. eCommerce sellers can leverage Prime to offer free 2-day shipping, Amazon’s customer service, and other features to consumers, benefiting both the buyer and the seller.
If you’re unsure or are still in the process of considering Prime, there are many reasons you should work to become Prime-eligible.
What is Amazon Prime
Amazon Prime launched in 2005 and has since become one of the most popular eCommerce subscriptions in the world. With 100+ million active members, Prime is undoubtedly the largest service of its type in North America, offering customers much more than “just” shipping benefits.
Today’s Amazon Prime benefits include music, movies, audiobooks, free subscriptions, and most-importantly (for sellers) free 2-day or next day shipping on millions of products. Most consumers pay an annual fee averaging $119 for these services, and benefit in myriad ways.
Prime-Eligible products, or those sold by a Prime-Eligible seller or vendor show up in search results with a blue Prime badge and can be filtered in search results.
Benefits of Prime
Getting your products Prime-eligible has numerous advantages for sellers, including increased sales across the marketplace. It will help with your Amazon search rankings, conversions, and may even help you land the Buy Box.
Being on Amazon Prime means that Amazon is backing your listing. Since Amazon is a brand that’s built on customer satisfaction and trust, having the Prime badge can go a long way to convincing shoppers that your item is the real deal.
Better Amazon SEO
Prime products naturally rank better than non-Prime products; The steps required to become Prime Eligible are the same as those required to boost ranking with Amazon’s search.
Amazon prioritizes fast shipping, customer service, order processing, order defect rate, late shipping rate, and the like, when choosing products to highlight in search.
After you have your listing optimized for keywords, images, and descriptions, your account health and metrics will play a key role in your search visibility. Becoming Prime-eligible means working on those same metrics, which will boost your search results over time.
Finally, sales velocity is also an important part of Amazon’s ranking algorithm, and something that will change when you integrate Prime. If you see an increase in sales velocity as a result of being on Prime, it will boost your placement on search results pages as well.
Improved visibility, reduced competition
Amazon also prioritizes Prime products in other ways. For example, the search algorithm uses fast shipping as an indicator of probable customer satisfaction, and therefore highlights products with fast and free shipping – Prime products have both, meaning they are very often highlighted.
Consumers can also sort products based on Prime and the type of Prime shipping available, giving individuals ways to narrow search results down to those that benefit them specifically. This will further improve your SEO, because you’ll have much less competition in Prime-filtered search results.
We can’t forget about voice-search and voice-shopping either. They are becoming more important, with 20% of mobile searches already made from voice assistants. Amazon’s Alexa will only entertain products that are available via Amazon Prime, which is vital considering the growing popularity of tool.
While Prime can help you show up in search, its real value lies in its ability to convert customers once they find your listing.
With 100+ million people seeing free and/or fast shipping on your product, you can expect your conversions to go through the roof.
This ties in well with the fact that Amazon Prime buyers actually spend more. In one study, Prime consumers checked out with shopping carts averaging twice the value of that of non-Prime subscribers. In 2015, members spent an average of $1,200 per year, versus $500 for non-Prime members.
High account performance
Amazon’s Prime requirements force sellers to improve customer service and support, offer faster shipping, reduce error/defect rates, and otherwise provide a much higher quality of service to customers.
While you may already be doing this, actively working to maintain standards to a specific standard could increase customer satisfaction and therefore sales.
Customers who receive products quickly, who mostly do not have to return products, and who receive answers and information from customer service as quickly as possible are significantly more likely to make a second purchase, to look your store up on social media or on your own website, and to tell friends and family and/or leave a positive account and product review. Over time, this will boost your account performance, which will help sales.
Land the Buy Box
All of the benefits we mentioned above; better SEO, more sales, high conversions, and good account health will also help you to land the coveted Amazon Buy Box. Prime-eligible listings follow a set of best practices that will help you get reviews, raise conversions, and more. Be sure to keep your listings optimized, and you’ll have a good chance of winning the Buy Box when on Prime.
How to get on Amazon Prime
Becoming Prime Eligible means taking steps to either qualify for Seller-fulfilled Prime or using Fulfilled by Amazon. Both options have their own pros and cons, and you should consider both depending on your products, infrastructure, volume of sales, and the size and weight of your physical goods.
Fulfilled by Amazon (FBA)
Fulfilled by Amazon is Amazon’s proprietary fulfillment program, which enables sellers to become Prime eligible when they ship their goods to an Amazon warehouse and pay Amazon to store, pick and pack, and fulfill orders.
Costs are usually based on product volume, weight, and duration of time in-warehouse, with flat-rate fees for most shipping and delivery solutions.
Here, Amazon processes the order, automatically ships a product from your inventory from their nearest warehouse and delivers it to the customer within 2 business days.
If there’s a problem with the order, the customer contacts Amazon customer support and/or returns the product to Amazon.
The customer benefits from a fast and high-quality experience, you benefit from having everything handled for you, negating the need to invest in strong infrastructure upfront.
Seller-Fulfilled Prime (SFP)
Amazon’s Seller-Fulfilled Prime program was introduced in 2015 and allows sellers to participate in Prime without using FBA.
Seller-Fulfilled Prime is where the seller manages the process, including committing to same-day delivery and/or two-day delivery on all products.
To be eligible, you need a Professional Seller Account, have fulfilled a minimum of 30 Premium Shipping orders in the previous 30 calendar days, and meet shipping metrics (<96%+ on-time delivery rate, cancellation rate >1%, and a tracking Id on <94% of orders).
You’ll also have to go through a trial process, work with approved Buy Shipping Service carriers, and have feedback of 4.5 or higher for the preceding 30 calendar days. During the trial, you’ll have to meet higher standards, with an on-time shipping rate of <99%, use of Buy Shipping Services for <95% of orders, and a cancellation rate >1%.
Between the two choices, FBA is the more convenient choice for sellers who have regular-sized items. FBA costs may shoot up if your inventory doesn’t move quickly enough or have bulky items, and selling during the holidays also costs more than double their standard rates.
However, managing your own fulfillment in-house requires a large investment up-front and more infrastructure planning. You must be able to process and ship orders before 4 p.m. on the day the order is placed.
Our recommendation: Handling your fulfillment in-house, but only to a small region in the USA. This will help you keep your service levels high and your in-house fulfillment simpler to execute.
Reviewing your current infrastructure, product size and weight, and the cost of meeting SFP requirements yourself will give you a good basis to make a choice. We recommend only using SFP if you have big or bulky items that aren’t qualified for FBA.
Amazon Prime is an investment for many sellers and could be more costly for sellers upfront. However, it will help you access millions of consumers looking for fast and free shipping, and will boost sales in multiple ways.
Many consumers trust Prime products because they trust Amazon, which is a powerful sales tool. At the same time, Prime incentivizes customers to buy more and more often with free shipping, perceived cost savings, and reduced wait times (many Prime products now arrive next-day, so customers have no need to go to the store).
While qualifying for Prime isn’t right for every seller, it is well worth the investment for most and can help you to grow your eCommerce business to the next level.