How to Qualify for Seller Fulfilled Prime (SFP)
Amazon offers several fulfillment options for brands and sellers that want to be on its platform. For brands that want to bypass Amazon and manage fulfillment themselves, there are two options: Fulfilled by Merchant (FBM) and Seller Fulfilled Prime (SFP). The key difference between these two options is Prime Badge eligibility; SFP is Prime eligible, and FBM is not.
Amazon’s Prime Badge guarantees shoppers two things: two-day shipping; and responsive, generous customer service. Having this badge can make all the difference. Products that earn a Prime badge for the first time average a 50% boost in sales. For brands that want to fulfill for themselves and have a Prime Badge, SFP is the only option.
Qualifying for SFP isn’t easy. Brands that want to add SFP to their ecommerce fulfillment toolset will need to meet Amazon’s strict requirements, which we’ll get into later in this article. It’s also worth noting that, as of right now, Amazon isn’t taking new SFP applications. Brands that want to apply will need to join a waiting list.
All that being said, for brands that want to have full control over their unboxing experience and be Prime eligible, jumping through the many hoops of SFP can be worth it.
How does Seller Fulfilled Prime (SFP) work?
SFP is a self-fulfillment method that allows businesses to sell products through Amazon with a Prime badge. In order to qualify for this program, brands must be able to deliver their product to consumers within the two-day delivery window at no additional cost. Failing to do so could disqualify brands even after being accepted into the SFP program.
What are the benefits of SFP?
Most brands that choose SFP want more control over their customer experience. Going through Amazon for fulfillment comes with benefits, but every product shipped out of Amazon will be in an Amazon box with Amazon branding. This leaves little room for branding, creativity, and personalization, which is why many brands would rather handle fulfillment themselves. Other pros of using SFP include:
Access to Amazon’s best customers
The gateway to the most loyal Amazon customers is the coveted Prime badge. Products with this icon are the first to appear on results pages for Prime customers. Consumers who shop on the ecommerce site frequently are likely to come across your product when searching for what they need.
Access to Amazon’s customer service
Amazon’s 24/7 customer service assistance will be available for SFP sellers and customers who buy products sold through SFP. This would give you more time to focus on other aspects of your business while Amazon fields questions about shipment tracking, returns and refunds.
Stronger opportunities to be listed as a featured offer
Products sold using SFP are more likely to be chosen as the featured offer among similar products. As a result, Amazon’s website will list your product as the default choice when a consumer clicks “Add to Basket.”
Fewer Amazon-related fees than FBA
The SFP program allows sellers to use their own warehouses, meaning your business won’t have to pay any of the storage fees associated with FBA. Selling from your own warehouse would also save you from paying fulfillment center fees for your inventory. FBA sellers are required to send shipments to multiple fulfillment centers to avoid a shipping fee for only sending shipments to one fulfillment center.
What are the cons of SFP?
Meeting Amazon’s strict requirements
To qualify for SFP, sellers must meet strict requirements to remain eligible during the trial period. These requirements can be difficult to meet, putting constraints on your brand’s ability to succeed.
Potential increases in fulfillment costs
SFP allows brands to control their fulfillment process rather than letting Amazon take the reins. This can reap benefits for your brand’s imaging, but the stress of maintaining Prime standards without a Prime infrastructure system can outweigh the importance of control.
Lack of scalability (especially in times of peak demand)
Brands will be expected to stock their inventory appropriately in preparation of holiday deals. This includes Black Friday, Cyber Monday and any other retail holidays or seasonal spikes. Your brand may not be able to grow efficiently while trying to meet these production demands.
More expensive shipping rates
Shipping orders to consumers within a two-day time frame can help boost the image of your brand while beating out competition. Unfortunately, the cost of higher shipping rates can be a burden that forces sellers to place limits on where they’re willing to ship their product.
Qualifying for SFP
Amazon isn’t currently accepting SFP applications, but brands can get on the waiting list if they think SFP is what their business needs. If accepted, brands that want to be eligible for SFP have to consistently meet the following requirements during a trial period of 5-90 days:
Give customers premium shipping options
Products sold through SFP must be eligible for premium shipping options, which can include one-day shipping as well as two-day shipping. Brands will also be expected to supply order tracking information for customers.
On-time shipping for more than 99% of orders
At least 99% of orders shipped during the trial period have to be shipped on-time. To meet this qualification, brands should aim to have their products sent out the same day they were ordered.
Cancel less than 0.5% of orders
Having a low cancellation rate helps lend credibility to a brand while maintaining customer satisfaction. The success of Amazon Prime is centered around the businesses’ ability to satisfy its customers’ fast delivery needs, thus canceling less than 0.5% of orders is a good way to show your Prime worthiness.
Have at least 98.5% of orders use Amazon Buy Shipping Services
SFP orders must use shipping labels from Amazon Buy Shipping Services. These labels are used to ship and confirm orders or track shipments. The shipping labels can be bought individually or in bulk.
Use seller-fulfilled Prime carriers to deliver orders
Amazon decides which carriers that sellers are allowed to work with to fulfill their orders. Carriers can vary depending on which country you’re selling from.
Comply with Amazon’s return policy
To maintain consistency, sellers are expected to develop return policies that are either similar to or better than Amazon’s return policy.
Let Amazon handle all customer service inquiries
Any questions customers have about the product must be dealt with through Amazon’s customer service assistance.
Using a 3PL for SFP
Qualified third-party logistics (3PL) companies can be used to help sellers make SFP work for their brand. If your brand doesn’t have the infrastructure or supply chain to meet Amazon’s expectations, an SFP-qualified 3PL may be the solution for you. At Netrush, we have the infrastructure and scalability necessary to help your brand get the most out of SFP at a cheaper cost.
Summary and takeaways
Seller Fulfilled Prime (SFP), Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) are all fulfillment services offered by Amazon. SFP is the only fulfillment service that allows brands to have control of their fulfillment centers while also selling Prime-eligible products.
Brands selling through SFP store inventory in their own warehouse must guarantee Prime customers free two-day shipping. In return, brands will have a Prime badge displayed next to their product on Amazon’s website.
Using SFP allows sellers to attract Amazon’s best customers, use Amazon’s customer service and increase the likelihood of earning a feature offer listing while paying fewer fees than FBA sellers.
SFP does have its drawbacks. Businesses are expected to follow strict requirements and may experience an increase in fulfillment costs or shipping rates while also managing a decline in scalability.
There is currently a waitlist to register for SFP. Brands that make it off of the waitlist have to consistently meet the aforementioned requirements for a trial period lasting anywhere between 5-90 days.
If your brand cannot meet Amazon’s qualifications or afford to pay high shipping fees, you can consider using an SFP-qualified, third-party logistics (3PL) company such as Netrush to solve any infrastructure or supply-chain concerns.
