There’s no denying that Amazon Prime has transformed the face of eCommerce in recent years, having set the bar for the ever-increasing consumer expectations surrounding delivery and price.
In fact, it is largely because of this that the marketplace now has over 100 million Prime subscribers worldwide, all looking for the best products, often at the lowest prices and from the most reliable of sellers.
But how exactly can you become one of these sellers? And more specifically, how do you go about making your products eligible for Prime?
Now, while the most common answer is to use Fulfillment by Amazon (FBA), it’s not the only answer.
Back in 2015, Amazon launched MFN Prime – more commonly referred to as Seller Fulfilled Prime – a program that enables sellers to increase sales by gaining access to Amazon Prime customers…
…without having to fulfill their products through FBA.
Throughout this article I will cover all there is to know about Amazon Seller Fulfilled Prime (SFP), including how to qualify, how it works, how much it costs, along with the advantages and disadvantages of the program compared to using FBA.
What you need to know about Amazon Seller Fulfilled Prime.
In short, the Seller Fulfilled Prime program enables MFN (Merchant Fulfilled Network) sellers to list their products as being “Prime” eligible, while maintaining control of their own fulfillment operations.
In other words, as a self-fulfilled Prime seller you are responsible for shipping these items directly, without having to put your inventory into Fulfillment by Amazon.
Here’s the thing.
In order to qualify for this program, you need to have high delivery performance standards, on par with those provided by FBA.
Now given that the shipping speed and excellent customer service are part of the reason many sellers opt to use FBA in the first place, it may be that Seller-Fulfilled Prime isn’t a viable option for you – at least not right now.
If, however, you have the resources in place and the proven track record to meet the standards required for MFN Prime, it could be a great way to reach Amazon’s most loyal and active customer base, without fulfilling your products through Amazon’s fulfillment service.
But what are the requirements?
How to find out if you are eligible for MFN Prime (Amazon Seller Fulfilled Prime).
Ultimately, to be eligible for MFN Prime / Seller Fulfilled Prime, Amazon must be convinced that you can fulfill your orders to meet their customer’s expectations.
This means that as an Amazon seller you need to meet the following requirements:
Ship over 99% of your orders on time.
To qualify, you must have no less than a 99% on-time shipping rate.
In fact, given that the major selling point of Amazon Prime is it’s next-day shipping, failing to meet this requirement indicates that you’re not a reliable seller.
Have a less than 1% order cancellation rate.
Order cancellation is another indication of customer satisfaction, which is why Amazon require Amazon MFN approved sellers to have a cancellation rate of less than 1%.
It’s therefore worth considering some of the factors that can reduce order cancellations, including the ability to provide full clarity about delivery times and pricing, responding to all support requests promptly and providing as much detail about the product as possible.
Purchase shipping labels from Amazon.
In addition to needing to purchase shipping labels from Amazon’s shipping website, you will also need to deliver orders with Amazon supported Seller Fulfilled Prime carriers – Amazon Logistics.
Adhere to Amazon’s returns policy.
Another requirement for Seller Fulfilled Prime eligibility is the need to agree to Amazon’s returns policies, as shown in the image below.
While those listed above are the main criteria, it’s also worth noting that to be eligible for Seller Fulfilled Prime UK you must have a UK-based warehouse, and to be eligible for Seller Fulfilled Prime US, you must have a warehouse in the US. You must also have an Amazon Professional seller account.
How exactly does Seller Fulfilled Prime work?
Now that you have an idea of whether or not you qualify for Amazon Seller Fulfilled Prime, it’s worth understanding how exactly it works.
Image Source: Amazon
As you can see from the image above, to start using Seller Fulfilled Prime / Amazon MFN Prime once qualified, you are required to complete a trial period.
This is to essentially prove to Amazon that you can meet their requirements. In fact, you will specifically be required to ship a minimum of 50 Prime orders, achieving 100% on-time shipping on each one.
The length in which this trial takes will be dependent on how quickly you meet the performance requirements and could take anywhere between 5 and 90 days. You should also keep in mind that during the trial period the Prime badge will not be displayed on your items.
Now assuming you successfully complete this trial period and become enrolled in the programme, you will need to be prepared to start handling the potential influx in sales.
So, how does it work from here?
It should go without saying that you will need to store your inventory in your own warehouse, but what you may not know is that you will need to process your Prime orders using shipping labels purchased from Amazon approved carriers.
You will also need to pick, pack and ship your orders on the same-day, using Amazon Seller Fulfilled Prime carriers.
Amazon Seller Fulfilled Prime costs and fees.
One of the most common questions surrounding the use of Amazon Seller Fulfilled Prime is whether there are any additional fees for participating.
To which the answer is no.
In fact, if you qualify as an Amazon MFN seller you will only need to pay the shipping costs of the designated Prime carrier.
Amazon referral fees and other Amazon seller costs remain the same.
With regards to using Amazon Logistics, shipping costs will be based on order volumes and the sizing of the package and for an exact quote you will need to contact your designated Prime carrier.
You should also keep in mind that as a Prime-eligible Amazon seller, you will need to offer free standard shipping on all of your Prime orders to non-Prime customers and will need to factor in this cost when setting your prices.
For more information about everything covered in this section, along with details and tips on how to manage your payments in Amazon Seller Central, I would suggest watching this video.
Advantages of using Amazon Seller Fulfilled Prime.
If you qualify for seller-fulfilled Prime you will need to assess whether this program is a better fit for your business than Fulfillment by Amazon.
While we have a whole article that covers the advantages, disadvantages and costs for FBA, below we have highlighted some of the benefits of using Amazon SFP.
Eliminate FBA shipping and handling fees.
While FBA certainly has its advantages, if you are eligible to self-fulfill your Prime products, then it can’t be ignored that you can save on the shipping and handling fees incurred by using FBA.
That’s not to say you will benefit from 100% of these savings though.
You will of course need to consider if fulfilling Prime orders in-house is a viable solution and how much added resources and warehouse space it might require. It’s also important to consider the added pressure of meeting Amazon’s strict requirements.
Avoid FBA inventory storage costs.
In addition to Amazon Seller Fulfilled Prime eliminating Fulfillment by Amazon’s shipping and handling fees, it also eliminates any basic FBA inventory storage costs and additionally any long-term storage fees.
Realistically, in order to be meet the standards required to be eligible for Amazon SFP, you will need a relatively sophisticated warehouse setup, so managing your own inventory shouldn’t be an issue.
Access millions of active Amazon customers.
I’ve already mentioned that Prime users are amongst Amazon’s most active and loyal customer base, but what’s also worth noting is that these customers spend an estimated $1,300 per year on the site.
Now given that there are over 100 million of them in total, that’s a lot of money being spent on Prime-eligible products.
Which leads me to my next point…
Beating the competition on Amazon.
By reaching Amazon Prime subscribers you also reduce the number of competitors you’re up against.
Let’s assume you sell yoga mats.
A general search on Amazon shows that there are over 40,000 listings of Yoga Mats in the Sports & Outdoors category.
When you filter the search to include only Prime-eligible listings, this number drops to around 2,000.
That’s not all though.
Disadvantages of using Amazon Seller Fulfilled Prime.
Self-fulfilling your own Prime orders doesn’t come without its limitations though.
In fact, one of the biggest challenges of using SFP is that you will need to maintain your eligibility.
Now while this shouldn’t necessarily be looked at as a negative, it is a huge consideration you will need to take on board.
I’ve also already touched on the fact that you will need to use Amazon Logistics, however this could be argued to be a benefit in that you will have complete reassurance of delivery standards.
That said, Amazon Logistics doesn’t currently cover all UK postal codes, which means that in some instances you may be required to use another Amazon approved carrier.
So, there you have it.
Just about everything you need to know about getting started with Amazon Seller Fulfilled Prime.