This guest post comes from our friends at Feedvisor
The dynamic Amazon marketplace environment has created an explosion amongst e-retailers with its all-in-one, full-featured platform that allows sellers to establish and create profitable online stores to showcase their products. Over the course of the last year, we have seen an immense increase in the number of sellers participating in Amazon’s Seller-Fulfilled Prime (SFP) program.
Seller-Fulfilled Prime is a fulfillment method that allows qualified Amazon sellers with Professional Selling accounts to display the Amazon Prime badge on orders fulfilled via their own warehouse or third-party logistics providers. Interestingly, sellers can regionally designate where they would like to engage in SFP, allowing them to be Prime in the specific areas that make geographical sense for their business. This allows sellers to capitalize on cost-effectiveness via their own warehouse location.
The variable that has the highest impact on Amazon’s Buy Box decision is fulfillment method (which is interwoven with Prime eligibility). Many customers are taking advantage of Amazon SFP today, as Amazon views this fulfillment method as strong as FBA in terms of Buy Box eligibility. Amazon is also in support of the fulfillment method because it reduces the need to build more FBA fulfillment centers and the e-commerce leader seems acutely focused on optimizing their warehouse space now and in the future.
Below we will detail out five reasons that fulfilling orders via SFP might be the right move for your business:
- You’ll receive access to the Prime customer base.
According to Feedvisor’s Amazon User Study 2018, 68% of Prime members make online purchases at least once a week, up from 50% last year. It is clear that the Amazon Prime audience is purchasing more frequently, so sellers should do everything in their power to become Prime-eligible if they aren’t already.
Prime subscribers are more than twice as likely to shop online daily than non-Prime customers, so sellers want to get in front of the buyers that spend more money, and increased exposure on the marketplace will translate into additional conversions in the future.
- You’ll experience cost savings.
With SFP, you’ll be able to eliminate any and all shipping and handling fees associated with FBA. You will also be able to avoid FBA long-term storage fees, which are being evaluated on a monthly basis beginning in September 2018 and will be scrutinized more meticulously, therefore mitigating the risk of paying for items in FBA that take longer to turn than expected.
Additionally, sellers can experience significant cost savings for oversized, heavier items as they will not have to pay for shipping twice (to the Amazon fulfillment center and the FBA fee when the item gets shipped to the buyer).
- Your items will get to your customers faster.
Your product line will have a shorter lead time with Seller-Fulfilled Prime. Rather than having to send your items to an Amazon fulfillment center and then back out to the end user, you can send the product directly to the customer, removing the Amazon middle-man from the equation.
- You get to maintain control of your inventory.
You will be able to experience the same Buy Box privileges as FBA sellers, while maintaining complete control over your product stock. You won’t need to take the extra steps to send your inventory to Amazon. You can also easily switch back and forth between SFP and FBM, depending on your business model and goals.
- You’ll gain a competitive advantage.
You can gain and then maintain an edge over other sellers when you analyze your product mix and create a SKU-specific (or even category-specific) strategy according to your ideal fulfillment method. For example, switching to SFP from FBM for certain items could make more sense and can therefore unlock more Buy Box potential for you. You should also keep tabs on which of your main competitors are selling via SFP and know where they are located.
In conclusion, it’s critical to do your research and make sure that you know your target consumer, have a plan in place to engage with them and capture their attention, and deeply understand the competitive landscape when deciding which products to sell via SFP.
About the Author
Catie Grasso is a marketing content writer for Feedvisor. She enjoys running, trying new restaurants, and exploring New York City.