Complete Guide To Amazon Seller Fulfilled Prime (SFP) In 2024

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After a three year pause since 2020, Amazon has reopened registrations for the Seller Fulfilled Prime (SFP) merchant program. 

 

And with its return comes updated rules that previous SFP members and newly interested merchants deserve to know. 

 

So, in this article, I’ll explain how the updated Amazon SFP program works in 2024, how to enroll, how to win your trial and tips for sustaining your Prime badges because as we’ll find out, Amazon can be pretty cutthroat with its SFP requirements. 

 

Let’s begin!

 

What is Seller Fulfilled Prime (SFP)

 

What is Seller Fulfilled Prime (SFP)

 

Amazon’s Seller Fulfilled Prime (SFP) is a program that lets you place your products in Prime listings and deliver to domestic customers without fulfilling inventory through Amazon. Instead, you ship orders from your warehouse(s) or a 3PL’s fulfillment centers.

 

By displaying the Prime Badge in your listings, you pledge to fulfill orders with 1-day or 2-day delivery at no extra cost to Prime customers. 

 

Changes Amazon has made to Seller Fulfilled Prime (SFP) in 2024

 

Changes Amazon has made to Seller Fulfilled Prime (SFP) in 2024

 

Amazon launched Seller Fulfilled Prime (SFP) in 2015 as an alternative to Fulfillment by Amazon (FBA) in order to increase the availability of products to Prime Members while allowing sellers to take over control of the fulfillment process. 

 

However, the quality of delivery experience fell as more merchants joined SFP, so Amazon paused signups in 2020 because it “could no longer guarantee a consistent Prime experience.”

 

In August 2023, Amazon announced SFP is coming back with an updated set of guidelines and with enrollment to officially reopen on October 1, 2023. 

 

So here’s a quick rundown and interpretation of the new changes as well as links to Amazon’s official statements, guidelines and steps for monitoring your metrics.

 

1. Goodbye On Time Shipment, welcome On Time Delivery

 

On Time Shipment (OTS) was calculated as the number of Prime orders you ship on or before the promised delivery date, divided by your total number of orders with a carrier scan, which is a scan your carrier performs to show the package is in transit. 

 

(Note; Amazon required sellers to perform same-day carrier scans)

 

However, Amazon has discontinued OTS for On Time delivery (OTD), which instead measures the number of Prime orders you deliver on or before the promised delivery date, divided by your total number of SFP orders with a delivery scan.

 

So, instead of 99% OTS rate SFP members are subject to 93.5% OTD.

 

The importance of this change is that sellers no longer have to pay double or triple the shipping cost to execute same day carrier scans for Prime order with faraway destinations. 

 

Now, more emphasis is placed on when the product actually reaches its final destination.

 

2. Valid Tracking Rate

 

The Valid Tracking Rate (VTR) metric refers to the number of packages you send out with a valid tracking ID divided by your total number of confirmed shipments. 

 

Previously, sellers weren’t tracked on this metric but the new rate moving forward is 99% or higher. 

 

Note that for a tracking ID to be considered valid, it must receive a first carrier scan and that carrier must be Amazon-integrated.

 

3. Nationwide Delivery 

 

Previously, Amazon required SFP sellers to make all standard size products available within the contiguous U.S (48 states excluding Hawaii and Alaska). 

 

Only Oversized products were eligible for Regional SFP, which allowed sellers to offer fast shipping within selected regions.

 

However, Amazon SFP now requires all ASINs (Amazon Serial Identification Numbers) or “Amazon SKUs” you include in the Prime shipping template to ship nationwide in 1 to 5 days, regardless of their size tier, i.e Standard, Oversized and Extra Large. 

 

This will be reflected in the shipping template and Amazon won’t let you change it. 

 

Still, you can choose to define regions that should expect faster delivery i.e same day, 1 day, and 2 day such as surrounding cities and states. 

 

And according to Amazon, all delivery regions across all delivery speeds you choose will be eligible for Prime and subject to the speed metric we’ll discuss below.

 

4. Delivery Speed

 

Delivery Speed

 

SFP delivery speed metric measures the percentage of your product detail pages that offer a specific speed. 

 

To “reflect Prime customer expectations,” Amazon says it will refresh these requirements every quarter. But starting October 1 2023, these are the current requirements in place. 

 

  1. 30% of standard size product page views must promise 1 day and 70% must promise 2-day delivery.
  2. For oversized products, these metrics are 10% and 45% respectively. 
  3. And for Extra Large products, 15% of product detail page views must promise 2-day delivery. Currently, there is no 1-day expectation for these SKUs.

 

5. 2% fee

 

Amazon originally said they would collect 2% on every sale. But after negative reactions from sellers, they have decided to shelve it.

 

6. Amazon Buy Shipping now optional

 

Before, SFP merchants were required to buy shipping labels from Amazon. 

 

However, Amazon has decided to give sellers more autonomy over their shipping solutions, as long as they’re trackable and reliable..

 

7. Returns

 

Any product that weighs under 50 lb and is returned in good and unused conditions will be eligible for free returns for all seller or buyer related reasons. 

 

Put another way, customers will be able to return an item smaller than 50lb for any reason as long as it is in new and unused condition for up to 30 days after purchase. 

 

What this means is that the seller bears the return label cost, regardless of the reason, which in my opinion is Amazon favoring customers at the cost of the merchants who power the platform.

 

Advantages of Seller Fulfilled Prime (SFP)

 

So what are some of the reasons Amazon sellers join the SFP program? Let’s find out.

 

1. Stand out against other sellers

 

Stand out against other sellers

 

The SFP program lets you flaunt the Prime Badge next to your products. 

 

While it may not seem like much, this tiny blue Badge is a symbol millions of Amazon shoppers associate with speed, reliability and quality.

 

In fact, Amazon says a Prime Badge increases conversions by 20% to 25% on average, so many businesses find it to be an invaluable tool for enhancing their store’s visibility and sales on Amazon.

 

2. Access to 200 million loyal Prime customers

 

Access to 200 million loyal Prime customers

 

Joining the Seller Fulfilled Prime program enables you to reach Amazon’s most loyal customers, Prime members. 67% of whom say if they had to shop at only one store, it would be Amazon.

 

Plus, Prime members spend much more than Amazon users. This report finds that in 2019, for every $600 spent by a non-Prime shopper, a Prime customer spent $1400. 

 

Meanwhile this study finds that on average non-Prime members spend $38 on Amazon every month whereas Prime members spend $91.

 

By featuring the Prime Badge, your products will be more discoverable as Prime members can also filter search results to display Prime products only. 

 

Moreover, you get to increase your chances of overtaking competitors as Amazon’s search engine favors Prime listings more.

 

3. Guaranteed free delivery messaging

 

Guaranteed free delivery messaging

 

Free delivery is one of the biggest and most effective purchase motivators in ecommerce. 

 

Shopify reports that as much as 70% of consumers view free shipping as a purchase factor, and up to 48% say shipping costs cause them to abandon their carts.

 

As an SFP Amazon merchant, you can adjust your pricing competitively to factor in shipping costs then display free delivery on all your Amazon listings that qualify for the SFP program. 

 

Besides attracting new customers, delivering on your free delivery messaging (no pun intended) will help earn repeat business and customer satisfaction.

 

4. Avoid Amazon FBA limits and storage fees

 

One might ask, why join SFP to earn the Prime badge when you can join FBA (Fulfillment By Amazon) to earn the Prime badge and have Amazon store and fulfill orders for you?

 

Well, two major downsides to FBA are inventory limits and high fees for storage and fulfillment. 

 

For instance, if an ASIN is brand new, FBA limits dictate that you can only store up to 200 pieces. And you can’t use FBA long term if you don’t have a high Inventory Performance Index (IPI) score unless Amazon will charge you penalty fees.

 

Moreover, Because of Amazon’s complex fee structure that’s based on weight and dimensions fulfilling orders in-house or finding a trusty 3PL might result in cost savings for your business.

 

5. Compete for the Buy Box

 

Compete for the Buy Box

 

Winning Amazon’s Buy Box means that when a shopper clicks “Add to Cart,” your product is selected by default.

 

By having the Prime badge on products, whether as an SFP or FBA merchant, you greatly increase your chances of winning the Buy Box compared to FBM or Fulfilled By Merchant products.

 

6. More package customization

 

Fulfillment By Amazon (FBA) does not support customized packaging or kitting, which can be a huge issue when you want to customize the unboxing experience for special customers i.e VIP shoppers, independent reviewers, and publications. Or when you want to include gifts to boost customer retention.

 

The downsides to Seller Fulfilled Prime (SFP)

 

1. You must meet Amazon’s strict criteria

 

You must meet Amazon’s strict criteria

 

To consistently and reliably provide 1 and 2 day shipping to Prime members, Amazon sets a high bar of expectations for SFP sellers to uphold. Especially now that all products except Oversized items must ship nationwide.

 

So if you don’t have warehouses on each coast, or if your warehouse isn’t positioned centrally within the country, understand that SFP can come at the cost of  your profit margins.

 

2.You still have to cover fulfillment costs

 

You still have to cover fulfillment costs

 

While you don’t have to pay FBA and storage fees as an SFP merchant, you still have to bear those costs independently. 

 

So as you consider joining the Seller Fulfilled Prime program, factor in the cost of warehouse space, labor, picking and packing technology, and expedited shipping.

 

3. You handle returns yourself

 

You handle returns yourself

 

For merchants enrolled in the Fulfillment By Amazon program, customer returns are sent to and handled by Amazon.

 

In contrast, when you use Seller Fulfilled Prime (SFP), customer returns are sent to and handled by you. Only this time you must abide by the same rules and timeframes of FBA sellers. And as we said earlier, customers are now entitled to free returns on virtually every product as long as it’s in good condition. 

 

How do I qualify for Seller Fulfilled Prime (SFP)

 

Rundown of all Seller Fulfilled Prime (SFP) requirements 

 

Rundown of all Seller Fulfilled Prime (SFP) requirements

These are the requirements for enrolling in the SFP program as stated on the Amazon website.

 

I. Pre-qualification criteria to start the Seller Fulfilled Prime (SFP) trial

 

To become eligible for the trial;

 

  • You must have a domestic address as your default shipping address
  • You must have an Amazon Professional selling account
  • You must meet the following criteria over the past 90 days:
    • Self-fulfilled at least 100 packages
    • Cancellation rate less than 2.5%
    • Valid tracking rate greater than 95%
    • Late shipment rate less than 4%

 

II. Criteria to pass the Seller Fulfilled Prime (SFP) trial and become an enrolled seller?

 

To pass the trial and earn SFP status:

 

  • You must participate for 30 days
  • You must ship 100 or more packages from Prime trial orders
  • You must have an on-time delivery rate of at least 93.5%
  • You must have a valid tracking rate of at least 99%
  • You must have a seller-initiated cancellation rate of less than 0.5%
  • You must meet minimum thresholds for 1-day and 2-day delivery speeds as viewed by Prime customer detail page views

 

III. Requirements for Seller Fulfilled Prime (SFP) as an enrolled seller?

 

To sustain your status as an SFP merchant and your Prime badges:

 

  • You must offer free 1-day and 2-day delivery for Prime customers
  • You must offer free nationwide standard shipping for all customers
  • You must meet minimum thresholds for 1-day and 2-day delivery speeds as viewed by Prime customer detail page views
  • You must have an on-time delivery rate of at least 93.5%
  • You must have a valid tracking rate of at least 99%  
  • You must have a seller-initiated cancellation rate of less than 0.5%
  • You must ship and deliver Prime orders on weekends (Saturday, Sunday, or both)
  • You must offer Free Returns on items weighing under 50 lb

 

Note: All post-order customer service inquiries are managed by Amazon

 

Is Fulfilled By Merchant (FBM) Eligible for Prime?

 

No, sellers enrolled in the FBM cannot use the Prime Badge. If the blue badge is a priority for your company, Fulfillment By Amazon and Seller Fulfilled Prime are your only options.

 

How to enroll in Seller Fulfilled Prime (SFP) step-by-step

 

How to enroll in Seller Fulfilled Prime (SFP) step-by-step

 

To enable Seller Fulfilled Prime (SFP) on your account, follow these steps:

 

  1. Register for the trial phase by navigating to the Seller Fulfilled Prime main page via your Seller Central dashboard. 
  2. Next, click on “Assign SKUs to Templates” in your shipping template library.
  3. Go over the Prime shipping requirements then enroll products into Seller Fulfilled Prime by assigning ASINs (Amazon Serial Identification Numbers) to the Prime shipping template.
  4. Once you set that up, identify Prime orders by the Prime Badges displayed on your Manage Orders page or by the “isprime” identifier in Order Reports.
  5. Fulfill these orders according to the Seller Fulfilled Prime trial requirements outlined earlier.

 

Tips for Sustaining Seller Fulfilled Prime (SFP) Status

Tips for Sustaining Seller Fulfilled Prime (SFP) Status

1. Don’t list all your products as Prime

 

You do not have to list all your ASINs as prime. I suggest only listing ASINs with high enough margins that can absorb $20, $30 premium shipping as Prime. 

 

Of course, you will get some orders close by that can ship for $10 but you will likely get more orders with faraway destinations on other sides of the country.

 

2. Achieve nationwide coverage with a distributed warehouse network

 

Achieve nationwide coverage with a distributed warehouse network

 

To realistically meet and exceed delivery standards, especially now that all Prime products qualify for nationwide delivery, you need multiple fulfillment centers strategically located across each coast. 

 

With this approach, Amazon will route the order to the warehouse nearest to a customer, resulting in shortened delivery time and lower shipping costs for you because of the proximity of your warehouse and the customer. 

 

Moreover, having fulfillment centers close to physical customer hubs allows you to benefit from cost-friendly ground transit instead of air freight.

 

3. Prepare for air shipping costs

 

Prepare for air shipping costs

 

There’s a contention between using multiple warehouses as opposed to exploring as many shipping options as you can.

 

From my experience, the most economical choice long-term is to spread your fulfillment centers geographically so you can take advantage of as much ground shipping as possible. 

 

Still, you need as much shipping flexibility, so in the case of Amazon SFP be prepared to pay for next-day or second-day air transit. 

 

If you’re selling an expensive product or shipping a high volume of orders, expedited air shipping may not affect your margins too drastically. If you’re not, consider working with a professional fulfillment partner that has fulfillment centers on the East, South, and West coasts.

 

4. Enable the Shipping Region Automation template

 

The Shipping Region Automation template enables Amazon to send orders to any of your warehouses that’s closest to the customer and hasn’t closed operations for the day. 

 

For example, imagine a shopper in Texas is browsing through Amazon for suit pants. 

 

Because Amazon knows their location from their IP address and what warehouses you have available, Amazon will assess your warehouses, then match the order to the most “logical” warehouse, and give your customer an informed delivery date estimation based on the cutoff time and their proximity.

 

For instance, let’s say your warehouse cutoff time is 2PM. If that shopper views your product page on Monday and places their order by 11AM, Amazon will promise 1 day delivery and thus require you to send the customer’s product the next day. In this case, meeting the 1-day promise counts towards your 1-day delivery performance

 

In contrast, if that same customer places their order by 5PM on Monday, Amazon will promise 2-day delivery. Since Amazon counts these towards your 2-day delivery percentage, meeting the promise counts towards performance.

 

5. Set a Daily Order Limit

 

Your daily order limit is the number of Prime orders you know you can reliably ship a day. 

 

Amazon requires you to set this to avoid any performance issues and ensure that you can process all Prime orders on time. 

 

Once this limit, let’s say 50 orders a day, is reached, the Prime Badge is disabled for your ASINs If you reach your limit for the day and want to increase it, you can change it once before the order cut-off time. 

 

Fulfillment By Amazon vs. Seller Fulfilled Prime: Which Should You Choose

 

What Is Fulfillment By Amazon (FBA)

 

What Is Fulfillment By Amazon  (FBA)? 

 

Fulfillment by Amazon or FBA is a program Amazon offers that enables you to store your products in Amazon’s fulfillment centers, which are then subsequently picked, packed, and shipped to their customers after orders for them have been placed. 

 

Note: Since Amazon controls warehousing and shipping, all FBA products automatically qualify for Prime.

 

Fulfillment By Amazon vs. Seller Fulfilled Prime: Differences Compared

 

1. Fulfillment

 

The mode of fulfillment is the core difference between Seller Fulfilled Prime (SFP) and Fulfillment By Amazon (FBA).

 

As an FBA seller, all you have to do is move your inventory to an Amazon warehouse and leave the entire fulfillment operation in Amazon’s hands. 

 

In contrast, as an SFP seller, you are in charge of everything, from storage to picking, packing and shipping.

 

2. Warehousing

 

With FBA, you store your inventory in Amazon’s warehouse for a fee, which varies by the time of year, product size, and storage duration. 

 

Notably, items stored right before or during holiday months like October and December demand higher fees than those stored during other times of the year. 

 

On the other hand, with Seller Fulfilled Prime, you store your inventory in your warehouse. 

 

Since Prime requires 1 and 2-day shipping, it goes without saying that your fulfillment process needs to be as streamlined and efficient as can be.

 

3. Inventory Management

 

FBA lets you concentrate on other parts of your business while Amazon takes care of inventory management. 

 

However, obvious drawbacks are the inability to see the status of your goods in real-time, and difficulty in making decisions like when to restock or understock because of that same lack of visibility.

 

Also, note that Amazon FBA charges extra fees on items stored longer than 181 days, which is a reason why you shouldn’t store slow moving stock with FBA.

 

In contrast, with Seller Fulfilled Prime, you have complete control over your inventory and are free to make real-time decisions based on real-time visibility.

 

4. Returns

 

With FBA, Amazon attends to every return request, accepts the returned items, and provides customer service related to the return. 

 

Whereas, with SFP, your business is in charge of all customer returns. Bear in mind that this requires dedicated customer service resources but also gives you more transparency over the causes of returns and oversight over customer return fraud. 

 

Want to learn how to reduce your ecommerce returns rate? Discover that here.

 

5. Fees

 

Amazon charges storage, picking, packing, shipping, returns, and customer service fees for its FBA (Fulfillment By Amazon) program. 

 

On the other hand, using Seller Fulfilled Prime means you won’t pay Amazon any of these costs. But it doesn’t mean you won’t pay those same costs at all. 

 

As an SFP seller, you must have the means to store, fulfill, and ship orders independently according to SFP requirements, or you can work with a reputable 3PL so they handle fulfillment while you focus on growing your business.

 

Verdict On Fulfillment By Amazon vs. Seller Fulfilled Prime

 

SFP and FBA offer their unique advantages and disadvantages, so carefully weigh both options before choosing either of the models. 

 

That said, new and smaller merchants who lack the resources (warehouse, fulfillment capital) might be better off with Amazon FBA because it provides a completely hands-off fulfillment and shipping experience. 

 

Whereas, bigger merchants who have resources and even prior experience fulfilling Amazon Prime orders or orders through other sales channels will be better suited to the requirements of Seller Fulfilled Prime.

 

What products are best for Seller Fulfilled Prime (SFP)?

 

  1. High-value items; 

These are products with a high price point that can “absorb” the costs of premium shipping. 

 

For example, heavy furniture, gym equipment like treadmills and luxury fashion items.

 

  1. Products with seasonal or unpredictable demand;

Items that experience frequent fluctuations in demand make it difficult to manage inventory effectively in Amazon’s warehouse. 

 

So there’s no need to store holiday-themed inventory with Amazon FBA.

 

  1. Items with variations; 

Some products such as clothing come in many sizes, colors, and styles that need more direct control during fulfillment, making them more challenging to handle with FBA. 

 

  1. Slow-moving goods; 

SFP fits well for items that are generally slow-moving and even products that would benefit from greater sales velocity with the Prime Badge. 

 

In truth, there’s no reason to pay storage fees on products that sit on shelves for most of their lifetime. Plus, Amazon FBA incurs penalty fees for items stored longer than 181 days.

 

  1. Inventory that requires special handling or preparation; 

Amazon FBA offers no package customization or kitting, so establishing a branded unboxing experience is near impossible. 

 

Consider using SFP for products that require special handling or assembly, and when you want to customize packages for special receivers.

 

Final Thoughts

 

We’ve covered a lot of ground today so let’s recap;

 

In summary, Seller Fulfilled Prime (SFP) is an Amazon program that lets you use the Prime Badge without fulfilling orders operating under the Fulfillment By Amazon (FBA) program.

 

Instead, you connect you or a 3PL’s warehouses to your seller account, and orders are automatically routed for you to fulfill yourself. 

 

As we said earlier, the requirements for Seller Fulfilled Prime might be too demanding and even unsustainable for new and small ecommerce sellers who lack the resources to consistently meet 1 or 2 -day shipping, as well as Saturday or Sunday shipping. 

 

But if you choose to do so, remember to look into multi-warehouse fulfillment so you can use as much cost-friendly ground shipping as possible and enable Amazon’s shipping region automation template so orders are sent to the most logical warehouse option.

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