You might love it or hate it, but you probably know about Fulfillment by Amazon (FBA). But how much do you know about Amazon’s Seller Fulfilled Prime (SFP) program and, specifically, the benefits of SFP for your business?
Whether you’re a powerhouse seller or not, your eCommerce growth strategy should include SFP, and we’re here to explain why.
What is Seller Fulfilled Prime
Launched in 2015, SFP gives your listings the Amazon Prime badge, offering the same fast and free shipping as FBA, but instead fulfilling orders yourself or using a fulfillment partner that supports SFP.
The critical differences between SFP and FBA are:
- Keeping all of your stock in your own warehouse or that of a fulfillment provider;
- Choosing your own shipping carrier or fulfillment solution;
- Selling non-FBA eligible items under the Prime badge; and
- Avoiding FBA’s fees.
Why you should be on SFP
Whether you’re selling on other online marketplaces, or you’re already rocking your Prime badge through FBA, SFP should be a serious consideration for your eCommerce business. Why?
1. You have control over your inventory
One of the main issues for those using or considering FBA is the lack of control and insight over your inventory – especially when you’re using warehouses other than Amazon’s. SFP avoids this by allowing you to keep all of your stock in your own warehouse, or that of a fulfillment provider, and to use inventory management software to run stock checks and reports from. Better insights into your stock levels and performance allow you to plan your future sales strategies more effectively.
2. Avoiding FBA fees for long-term storage and bulky items
There’s no doubt about it – FBA’s prices can be prohibitive for those that sell slow-moving, seasonal, large, or heavy items. SFP avoids this cost altogether – fulfilling these items yourself or through a 3PL. The money saved on these fees can offset the costs of offering your customers fast and free shipping on Amazon and your other sales channels.
3. You qualify for Amazon Prime
First and most importantly, SFP qualifies you for Amazon Prime – the fast shipping subscription service that has more than 100 million active members. This powers you to reach a higher number of customers (customers who are 96% more likely to buy from Amazon and spend 4.6X more in the process), through increased visibility in both filtered and unfiltered search results.
4. You can sell on multiple sales channels
SFP also gives you the freedom to sell on multiple sales channels without worrying about the high multi-channel fulfillment costs of FBA, or ringfencing and limiting your stock levels between sales channels.
Plus, if your process can get you into SFP, you can potentially use it to get on other marketplaces and their fast shipping programs. Some examples of this are Walmart Free 2-Day Shipping and eBay Fast N’ Free Guaranteed.
5. You have better chances of winning the buy box
SFP qualifies you for Amazon Prime, meaning that qualification involves meeting strict delivery speed metrics. This also means that you have a higher chance of winning the Amazon Buy Box and appearing first on the product page. With the Buy Box accounting for 82% of sales, this drastically increases your ability to convert customers into profits.
6. You can choose your shipping carrier
As an SFP seller, you also have complete control over which shipping carriers you use for achieving fast shipping speeds. You can tailor your selection based on location, levels of service, or personal preference. Use our fulfillment calculator to compare rates!
How to execute Seller Fulfilled Prime
Convinced yet? We certainly are, but there’s another step before you and your customers can start benefiting from SFP… getting onto SFP.
In order to get onto SFP, sellers will need to apply with Amazon and get approved. This usually entails a trial period of between 5 and 90 days. Once you’re approved, there are two ways to remain in good standing on SFP; in-house fulfillment and outsourced fulfillment.
Professional Amazon sellers wanting to qualify for Amazon Prime by fulfilling orders using their own warehouse, staff, and shipping carrier must:
- Have fulfilled over 20 Premium Shipping orders over the past 30 days;
- Have an on-time delivery rate of >96% (99% during the trial);
- Maintain a cancellation rate of <1%;
- Add tracking ID to >84% of orders;
- Maintain a 4.5+ feedback rating over a 30-day rolling period.
The benefits of in-house SFP fulfillment include control over the whole process, insight into how your fulfillment process works, and cost savings through “doing it yourself”. But, once the volume of Amazon Prime orders picks up, many sellers struggle to maintain the strict delivery standards without investing in more staff and warehousing space.
SFP outsourced fulfillment
Combining the benefits of both FBA and SFP is an SFP outsourced fulfillment solution. You are still required to meet the Amazon SFP eligibility requirements above, but this is easier when using a fulfillment partner who is experienced in meeting those very requirements for SFP sellers across the country.
While outsourcing fulfillment is a cost to your business and requires the shipping of your inventory to other warehouses, this cost and hassle are quickly returned through your ability to stay on SFP, process more orders, and benefit from other fast shipping programs.
Why you should be on SFP – final thoughts
Your eCommerce business should be on SFP because everyone wins.
- Your customers benefit from finding you easily and using their Amazon Prime membership to benefit from free and fast shipping;
- You benefit from new customers, stronger customer lifetime value metrics, and the ability to qualify for other fast shipping programs; and
- Amazon benefits because…well, it’s Amazon.
Give it a whirl – you might be surprised.