Fulfillment by Amazon (FBA)<\/span> and Amazon <\/span>Merchant Fulfilled Network (MFN) <\/span>have been the go-to fulfillment options for sellers on Amazon for over a decade. However, since being introduced in 2015, Amazon\u2019s Seller Fulfilled Prime (SFP) program, has grown in popularity as a way to reach Amazon\u2019s Prime Members which have ballooned to over <\/span>100 million members<\/span><\/a> while providing more flexibility to the Amazon sellers. If you want to learn more about FBA and MFN, check out our article on Amazon’s fulfillment options<\/a><\/span>.<\/span><\/p>\n Seller Fulfilled Prime<\/span><\/a><\/span> allows the Amazon seller to list their products as Prime-eligible and ship their products to their customers directly via their own warehouse or from a qualified third party logistics company (3PL).<\/span> Sellers can display the Amazon Prime badge on the products they ship directly to the customers with two-day shipping and free standard shipping. Like Amazon FBA, Amazon SFP gives the Amazon seller the best chance to “win” the coveted Amazon buy box – meaning, the Amazon seller will be the first option when shoppers are looking at buying the product. Non-prime sellers have a lower priority compared to Amazon Prime sellers and non-prime sellers are often filtered out by shoppers.<\/span><\/p>\n With almost all of DCL\u2019s customers participating in FBA, we\u2019re constantly thinking of ways to support and enhance their experience with Amazon. Also, we acknowledge that FBA has it’s own set of challenges which we’ve covered in the Amazon 3PL Trap<\/a> <\/span>article.\u00a0 Based on our customers\u2019 feedback, one of those ways was to support Seller Fulfilled Prime\u2014so, that\u2019s what we did. We worked diligently to integrate with Amazon SFP and are now prepared to help you ship via SFP out of DCL warehouses providing you with greater flexibility and an option beyond FBA and MFN. Here\u2019s a short summary of the program and how it could potentially benefit you.<\/span><\/p>\n If you are curious to learn more, please reach out to your DCL representative to get started.<\/span><\/p>\n One of Amazon\u2019s top priorities is to ensure that their Amazon Prime Members receive the white-glove treatment when buying and receiving products, so they have strict requirements for sellers to qualify for the SFP program. Here are some of the basic qualifications for the seller or their 3PL:<\/span><\/p>\n In order to qualify for SFP you must also fulfill the requirements for the Premium Shipping Program. These are most commonly tied to 2-day shipping which is the primary shipping option chosen by Amazon Prime members.\u00a0The trailing 30-day eligibility requirements for Premium Shipping are:<\/span><\/p>\n <\/p>\n Eligible Amazon sellers or their 3PL are required to go through a <\/span>SFP trial period<\/span><\/a> and meet the following requirements on a minimum of 50 Amazon Prime trial orders.<\/span><\/p>\n <\/p>\n As noted in the <\/span>SFP program terms<\/span><\/a> page, you must follow these policies to maintain your SFP status: \u00a0<\/span><\/p>\n <\/p>\n After successfully completing the trial period, you are auto-enrolled in SFP and you must continue to meet these requirements on a rolling 7-day basis, sell a minimum of 200 orders every 90 days, and have an on-time delivery rate of at least 97% for Prime Orders. \u00a0Sellers who fall short of these requirements will no longer be eligible for SFP, but may continue to sell their products.<\/span><\/p>\n SFP is treated the same as FBA products, which means the sellers\u2019 product gets surfaced more frequently to Amazon Prime Members. \u00a0More exposure leads to more sales conversions. <\/span>Amazon recently stated<\/span><\/a>, \u201cSeller fulfilled listings that became Prime-eligible for the first time through Seller Fulfilled Prime experienced an average sales uplift of more than 50%.\u201d \u00a0Also, it\u2019s worth noting that the <\/span>average Prime Member spends 2X more than the average non-member <\/span><\/a>annually on Amazon.\u00a0\u00a0<\/span>One of the biggest selling points of FBA\u2019s program is that it offers sellers the unique opportunity to reach Amazon\u2019s biggest spenders: Amazon Prime Members. SFP provides this same level of exposure.<\/p>\n When using FBA, after you send your products to one or some of Amazon\u2019s 100 fulfillment centers, you lose a lot of control and visibility of your product. This can be exasperated by Amazon\u2019s ever changing storage fees<\/a>.<\/span> \u00a0SFP allows you to ship your inventory from a non-Amazon warehouse giving you more control of your inventory. This is especially advantageous if you have multiple sales channels or a seasonal product in which you foresee sales spikes during the holidays like Amazon Prime Day, Black Friday, or Cyber Monday.<\/p>\n As Amazon continues to see record sales quarters, demand for <\/span>warehouse space is heating up<\/span> and the growing <\/span>cost to store products is being passed down to the sellers<\/span><\/a>. \u00a0Sellers are at the mercy of Amazon\u2019s ever-changing, often unpredictable storage fees. \u00a0On the flip side, SFP gives sellers full control over their warehouse costs and needs. This can be a big cost saver, especially for sellers who have managed their supply chain well and have a good grasp on their sales forecast.<\/span><\/p>\n While FBA offers a number of advantages, the FBA fees can quickly erode a seller\u2019s profit. You will need to pay fulfillment fees with Amazon as well as pay for the freight to get the inventory to the Amazon warehouses. By using SFP, sellers can eliminate the inbound ship cost to Amazon and have more control over their fulfillment costs.<\/span><\/p>\n Product enhancements and changes are the norm for most industries, especially in the consumer electronics space. Often times, sellers need to make last minute modifications to packaging, such as including a product pamphlet or a sticker calling out an important feature. However, once the sellers\u2019 product arrives at the Amazon fulfillment center, these changes are nearly impossible to execute. While Amazon is a well oiled machine pumping out millions of products per day, they are not set-up to accommodate special requests. With SFP, sellers maintain their inventory at their own warehouse or 3PL, providing them access and flexibility to their products.<\/span><\/p>\n One of the major pain points since the inception of FBA has been around customer returns and refunds due to human error at an Amazon fulfillment center. \u00a0Whether it\u2019s a lost, damaged, or late package caused by Amazon which results in a return or refund, the onus falls on the seller to file a claim with Amazon to get their money back. \u00a0In fact, sellers working with Amazon Customer Service to get reimbursed or deal with fraudulent buyers has become so common, there are countless third party services to help sellers manage the process.<\/span><\/p>\n Amazon publishes their <\/span>FBA fulfillment fees<\/span><\/a><\/span> so we are able to use their actual rates. Your own warehouse fees or your 3PL warehouse fees may vary, the following is only an example.<\/span><\/p>\n Let\u2019s model out a real life example of a typical DCL Logistics’ customer product to see how the costs compare shipping FBA vs. SFP.<\/span><\/p>\n Highlighted in yellow are the variables:\u00a0 Price, COGS, package dimensions, weight, average storage time, etc.\u00a0 Amazon factors all these variables when calculating fulfillment, shipping, and storage fees.<\/p>\n <\/p>\n Based on our cost model, FBA in this case is the better choice but other cost factors need be heavily considered. These factors include:<\/span><\/p>\n The example covered above is just one of numerous scenarios, and the actual costs and profits will vary depending on multiple factors. <\/span>Based on the above example, FBA shows to be more cost effective due to the fact that FBA covers the shipping cost. However, sellers should consider the other factors that are not modeled: inventory turns (i.e. storage costs), taxes, and most importantly opportunity costs. Remember, the biggest benefit for SFP is that sellers have greater flexibility since inventory can be managed with less pools of inventory.<\/span><\/p>\n We\u2019ve included both the cost model and storage model that you can download <\/span>HERE<\/span><\/a><\/span>\u00a0for your own product evaluation.<\/span><\/p>\n With the continued growth of Amazon Prime members and rising costs to sell to them, SFP offers sellers a great option for better profit potential and more flexibility to scale. \u00a0Sellers will need to be committed and operationally sound to meet Amazon\u2019s strict qualifications.<\/span><\/p>\n <\/p>\n If you need help to evaluate your options, go to our Amazon Fulfillment Services page<\/a><\/span> or please don\u2019t hesitate to reach out to your DCL Logistics representative or contact us here<\/a>.<\/span><\/span><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" What is Amazon Seller Fulfilled Prime (SFP)? When DCL Logistics was founded 36 years ago, no one here could have predicted that commerce would be singularly dominated by a trillion dollar ecommerce storefront: Amazon. Fulfillment by Amazon (FBA) and Amazon Merchant Fulfilled Network (MFN) have been the go-to fulfillment options for sellers on Amazon […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[180,19,171],"class_list":["post-7748","post","type-post","status-publish","format-standard","hentry","category-amazon-fulfillment","tag-amazon-prime","tag-fulfillment","tag-tips"],"acf":[],"yoast_head":"\nHow to Qualify for Seller Fulfilled Prime<\/b><\/h2>\n
Eligibility<\/i><\/strong><\/h3>\n
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Trial Period<\/i><\/strong><\/h3>\n
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Terms and Policies<\/i><\/strong><\/h3>\n
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Advantages of Seller Fulfilled Prime (SFP)<\/b><\/h2>\n
1. More exposure to Prime Members<\/em><\/strong><\/h3>\n
2. Seller gains more control over their inventory<\/strong><\/em><\/h3>\n
3. Better control of long-term storage fees\u00a0<\/em><\/strong><\/h3>\n
4. Control fulfillment and shipping fees<\/strong><\/em><\/h3>\n
5. Product flexibility<\/strong><\/em><\/h3>\n
6. Better control over returns and refunds<\/em><\/strong><\/h3>\n
A Look at the Numbers [Cost Analysis]<\/b><\/h2>\n
![\"\"](\"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/wp-content\/uploads\/2018\/09\/DCL_Fulfilled_by_Amazon_versus_Seller_Fulfilled_Prime_Model_-_Example.png\")
<\/p>\n\n
Conclusion<\/b><\/h2>\n