If you’re selling on Amazon, you’re in good company. The retail giant and its sellers sold $189.61 billion worth of products to U.S consumers last year alone. And while the majority of online sellers understand the importance of a solid presence on Amazon to increase sales, many have yet to discover the importance of gaining visibility with the Amazon Prime badge through Seller Fulfilled Prime.
Amazon Prime Continues to Gain Popularity
While Amazon won’t release exact numbers of those currently part of their Prime program, the latest data from Consumer Intelligence Research Partners (CIRP) estimates that there are over 80 million Prime members in the U.S. alone. That number represents a 38% year-over-year increase and is expected to gain traction in the year ahead.
Consumers love the guaranteed delivery dates, trackable shipments, free shipping, and host of other benefits that come from Prime membership. To make the most of their investment, Amazon Prime members are actively searching for products with Prime badges. They are also spending nearly twice as much money on annual purchases compared to their non-Prime counterparts.
What is Seller Fulfilled Prime?
In 2015, Amazon released a fulfillment program to serve as an alternative to Fulfilled by Amazon (FBA) called Seller Fulfilled Prime. It allows sellers to display the Prime badge on product listings and deliver directly to Amazon Prime members from their own warehouses. Most importantly, it can offer massive exposure for sellers opting in for the program.
Who Should Use Seller Fulfilled Prime?
Multi-channel sellers with their own warehouses and inventory are excellent fits. SFP is great for brands selling products that are not eligible for FBA or those looking to avoid the high shipping and storage rates that come with it.
What Are the Benefits of Seller Fulfilled Prime?
First and foremost, Amazon predicts a 30% to 40% jump in sales for sellers who join the SFP program. In addition to increased sales, here are a few reasons to consider SFP:
- Increased brand visibility to Amazon Prime customers
- Increased brand validation with display of the Prime badge
- Sellers can receive returns directly to their own warehouse
- Many Amazon Prime members will filter for Prime products in search results
- Higher chance of winning the Buy Box (giving sellers the chance to compete with FBA sellers and other Amazon products)
- Ability to determine where you offer the Prime badge to optimize on shipping costs
Seller Fulfilled Prime Success Stories
As one of the first companies eligible to be a part of the program, we’ve seen firsthand the incredible value Seller Fulfilled Prime can bring to brands. Here are just a few examples:
- Consumer Electronics: After implementing SFP, one consumer electronics company more than doubled their monthly average sales. Today, 54% of their product sales are sold through Amazon Prime.
- Consumer Goods: One consumer goods company saw a 52% increase in monthly average sales after implementing SFP.
- Home & Garden: A Home & Garden company opting for SFP now sells 65% of its products through Amazon Prime and saw a 166% increase in product sales post Prime.
So, how can your brand qualify for SFP?
The value of the Prime badge is undeniable, but achieving it is extremely challenging. First, the seller must opt-in for Premium Shipping (often referred to as the stepping stone of SFP), which includes Same-Day Delivery, One-Day Shipping, and/or Two-Day Shipping in the US. (Note: the seller must have been selling on Amazon for at least 90 days to be eligible for a Premium Shipping offering). The seller then enters into a high-stakes, 30-day trial period requiring:
- On-Time Shipment Rate of at least 99% for Prime trial orders.
- Prime trial orders must be shipped on the same day the order is received, as long as the customer places the order before the seller’s cutoff time.
- Use of Buy Shipping Services for at least 95% of Prime trial orders.
- A Cancellation Rate of no more than 1% of Prime trial orders.
Once the 30 days are up, the seller is then eligible to submit products to be labeled with the Prime seal of approval.
Most brands can’t reach Seller Fulfilled Prime status on their own. And even if they can, the shipping costs to deliver in two days will kill them. Sound overwhelming? Ally can help. Our intelligent shipping technology allows for timely deliveries while minimizing shipping costs. If you’re interested in learning more about selling directly to consumers through third-party marketplaces like Amazon, reach out to our seasoned eCommerce experts todayto get started.