With over 80 million paying monthly subscribers, Amazon continues to explode as the eCommerce shop for the majority of Americans. It holds amazing opportunities for online shops, especially for those with their Prime badge. In order to get the most from your Amazon account, however, you need to find the right eCommerce fulfillment for you.
Since the launch of Amazon’s Seller Fulfilled Prime program, businesses have been able to increase their profits, and lower their frustration while still holding the Prime badge that customers trust with third-party fulfillment.
Here are just a few reasons why using a third-party fulfillment for your Amazon shop might be right for you.
Why Choose Amazon SFP?
You Get All the Benefits of FBA
There is no doubt that the Prime badge is essential for making your most profitable business: in 2014, 71% of FBA respondents reported that their sales increased more than 20% since adding the badge. Those numbers have only increased with Amazon’s exponential growth: participants in Seller Filled Prime recorded an average growth of 50% in 2015.
By participating in an eCommerce fulfillment, as opposed to an Amazon warehouse (FBA), you will continue to get all of these benefits without the hassle and extra fees. Amazon created the Seller Fulfilled Prime (SFP) so they could continue to reward sellers for performing at top quality. You can also still have Amazon manage all of your customer service while participating with SFP, which does not happen with FBA.
Your profit does not need to take a hit while looking for a lower cost, convenient option. Participate in the Amazon Fulfilled Prime to maintain the badge and trust with your customers.
One Consistent Price with No Hidden Fees
Sellers know the rush and stress while handling Q4 in the retail business. Make this time of year easier on yourself by utilizing third- party fulfillment. The competition to get warehouse space during this crucial time of the year can be difficult with FBA. Inventory needs to be sent in far ahead of time in order to make sure there is space for your goods. However, SFP allows much more flexibility, since eCommerce facilities are better equipped to handle the increase in volume.
In addition, Amazon charges more during Q4. These fees jump from $0.69 a square foot to $2.40 in the October- December season for a standard size. This can cut straight into your profit during a time of year that is essential for your business. At EWorld, though, prices remain consistent throughout the year so that you are not surprised by an increase in fees.
Not only does Amazon raise their prices depending on the time of the year, but they also charge for long-term storage if your product does not sell fast enough. Building warehouses is an expense for Amazon that they try to avoid, so they do not look favorably on businesses that take up space without selling for long periods of time. If your product is in storage for 6 months, Amazon will charge $11.25 per cubic foot. After 12 months, that number jumps up to $22.50.
Many sellers are not expecting such a huge hike in prices above what they were originally quoted and can quickly get out of hand for large items, especially if they do not sell at a high velocity. In order to run a successful business, you need to know and account for all of your charges. Third-party fulfillment can be the answer you need to keeping prices stable.
Better Efficiency and Less Stress
Not only does SFP make financial sense, but they can make your job as a seller run much more efficiently. Third-party fulfillment allows you to store all of your inventory in one facility, which will make the logistics of handling shipping much simpler for your business. Instead of juggling your products from various facility, you can have it all streamlined in one warehouse. Shipping rates are still comparable to Amazon, however, because warehouses are still required to buy shipping from Amazon the majority of the time.
Not only will the logistics of sending out your product being much easier, but refunds and returns will no longer cause a headache. Mostly due to human error, many sellers do not get reimbursed for returns in an efficient manner. Some do not get reimbursed at all. You can avoid that headache by skipping the Amazon warehouse and working directly with a third party.
How to Qualify for Amazon SFP
To start, you must create a Professional Sellers Account and Premium Shipping. In addition to an account, you must send out at least 30 orders over 30 days that were fulfilled through Premium shipping in order to qualify for a trial period. You need to work with an approved Buy Shipping Service carriers that will pick up your orders by 4pm. In addition, you will need:
- Tracking ID’s for 94% of orders
- Cancellation rate of less than 1%
- On-time delivery of at least 96%
- Feedback of 4.5 or higher
You can then qualify for a trial period. The trial period can last anywhere from 5-90 days and you will be required to fulfill 200+ orders with
- 99% on-time shipping rate
- 99% same day shipping
- 95% use of Buy Shipping Service carriers
- Less than 1% cancellation rate
You will automatically by enrolled in the Seller Fulfilled Prime program once you have successfully completed the trial. If you do not fulfill 200 orders in that time frame, you can apply for a trial again as long as you still qualify.
Once you have enrolled, you will need to maintain a professional selling plan and be enrolled in premium shipping. To see if you qualify for premium shipping, check Amazon’s requirements here and here. You will also need to purchase to purchase a minimum of 98% of all labels through Buy Shipping Services, either through the Buy Shipping tool on the Manage Orders page or through the Merchant Fulfillment API.
You must also meet or exceed the following metrics:
- 99% On-Time Shipment Rate
- 0.5% or lower cancellation rate
- 97% On-Time Delivery rate for all shipping outside of Buy Shipping Services
If you fall below these metrics, you will lose your Prime badge, but you can re-apply if you improve again. For more information on the Seller Fulfilled Prime eligibility and re-joining, refer to the Seller Fulfilled Prime enrollment revocation page.