Ever since its beta launch in 2015, Seller Fulfilled Prime (SFP) has been a hot topic for Amazon sellers. There are a ton of benefits to the program, but also some strict requirements and drawbacks. Our order fulfillment experts have designed this guide to help eTailers find an Amazon 3PL partner who can maximize the impact SFP can have on their eCommerce business.
Before we start talking about finding Seller Fulfilled Prime 3PL providers, we should have a quick look at the full Amazon sell-ship ecosystem. To be clear, we’re talking here about third-party sales on the Amazon platform, not goods sold and shipped by the company itself.
In Q2 2021, 56% of paid units sold on Amazon were from third-party sellers—the highest it has ever been. This is why it’s essential for online retailers who use Amazon to sell their products to understand Amazon order fulfillment and shipment options.
There are three main ways consumers can get the goods they purchase from third-party sellers on Amazon. The most prominent is Fulfillment by Amazon, or “FBA” for short.
In the FBA program, sellers pay Amazon to warehouse, pick, pack, and ship their goods, in addition to handling customer support and reverse logistics. Essentially, FBA allows Amazon to act as a 3PL provider, putting its extensive logistics network to work.
For sellers, FBA is easy, and it guarantees that the item will be listed with the Prime badge. This promises buyers fast, free shipping, and increases the seller’s odds of winning a share of the Buy Box (we’ll cover this in-depth later).
Unfortunately, FBA is also quite expensive. Fulfillment by Amazon costs are broken down into two categories: fulfillment fees and storage fees.
Introduced in 2015, Seller Fulfilled Prime gives third-party sellers the ability to list their items as Prime without paying for FBA. The program is pretty much exactly what it sounds like: order fulfillment is handled by the seller rather than Amazon.
The upside is similar to FBA. You get the benefit of the Prime badge and a shot at having the all-important Buy Box:
On Amazon, it’s common for multiple sellers to offer the same product. But when a user clicks the “Buy Now” option, only one is going to get the order. This is referred to as the Buy Box. Amazon algorithmically determines who should get the Buy Box order at any given time, with other sellers relegated to “Other Sellers on Amazon” below.
On desktop, 82% of purchases go through the products listed in the Buy Box, and an even higher percentage on mobile. In other words, the Buy Box can have a significant impact on your business. And while the algorithm for landing it is complex, FBA and SFP sellers have a dramatic advantage.
Unfortuantely, Amazon’s requirements for SFP are extremely stringent. To maintain your status, you must:
In addition, Amazon Seller Central shared new requirements to maintain your status as of February 1, 2021, which include:
Some of these requrements can create significant stress for sellers looking to fulfill Prime orders themselves. Smaller teams, for instance, can expect to have quite a bit of trouble getting every single order out on time. And since Amazon is quite strict, even a few hiccups can cost you your SFP privileges.
Merchant Fulfilled Network, or MFN, is the third (and least attractive) method of fulfilling third-party orders on Amazon. It’s basically SFP without the requirements, and without the advantages of the Amazon Prime badge and the Buy Box.
On the plus side, MFN sellers can use custom packaging, receipts, and the like. On the minus side, you’re an Amazon listing without a Prime badge or a realistic shot at the Buy Box for competitive items. Both of those are sub-optimal, to say the least.
To be truly competitive on Amazon, it’s basically a requirement to be eligible for Prime. That means Fulfillment by Amazon and Seller Fulfilled Prime are the two best fulfillment options.
If you have the right infrastructure in place, FBA’s hefty costs make SFP a very attractive option. But if you don’t have a plan, it can be almost impossible to keep up with the strict SFP requirements.
Fortunately, there are third-party logistics providers (3PLs) that specialize in helping third-party Amazon sellers meet Seller Fulfilled Prime criteria. In this situation, the Amazon 3PL provider, rather than the seller, warehouses goods and handles the order fulfillment process.
Basically, it’s like FBA but less expensive and significantly more flexible. Listings are eligible for the Prime badge, and the chances of getting time in the Buy Box increase significantly.
Using a Seller Fulfilled Prime 3PL partner is especially great for busy sellers or those without logistics experience. Everything from the order through delivery (and beyond) is handled by dedicated experts, leaving the seller to focus on core competencies like marketing and growing the business.
To meet Amazon’s SFP criteria consistently, a 3PL should:
In this post, we’ve covered everything you need to know about Amazon SFP, including:
If you’re an Amazon seller and this sounds good to you, we’d love to help. Rakuten Super Logistics is a leading Seller Fulfilled Prime logistics provider, with 20 years of fulfillment experience and a dozen fulfillment centers from coast to coast.
We can help build your business by giving you custom services and all the advantages of the SFP program without the hassle of fulfilling orders yourself or the hefty cost of Fulfillment by Amazon. Request a quote today to learn more about our order fulfillment services and we’ll be in touch ASAP.
Remember, the holiday season is right around the corner. If you don’t have your fulfillment partner in place yet, It's time to get a plan in place. Contact us today and leave Black Friday and Cyber Monday to us logistics experts you can trust!