Amazon SFP (Seller Fulfilled Prime): Enhancing Your Business Within and Outside Amazon
Published On: August 16, 2023
This October, Amazon will restart enrollment for Seller Fulfilled Prime (SFP). This comprehensive guide includes vital details if you’re considering employing SFP for your Amazon order fulfillment.
What Is Amazon SFP?
Seller Fulfilled Prime (SFP) is an Amazon service that permits Prime sellers to manage their order fulfillment, either through their in-house operations or by collaborating with a 3PL partner or an alternative outsourced fulfillment solution. Introduced in 2015, SFP was designed to free up space in Amazon’s warehouses to accommodate their newly initiated Private Label brands.
SFP-enrolled merchants keep their inventory in their own or partner’s warehouses, oversee all fulfillment processes, and administer customer feedback. They must adhere to Prime’s strict service standards, including free 2-day shipping. Amazon stringently watches these standards, terminating SFP accounts that fall below 99% timely fulfillment or 97% punctual delivery.
SFP greatly benefited Amazon and third-party sellers alike, letting sellers enjoy increased sales with the Prime badge while retaining control over inventory and distribution, often saving fulfillment expenses. Amazon gained in reducing fulfillment costs and freeing warehouse space while preserving a diverse SKU assortment in the Prime catalogue.
After closing the program to new applicants for some time, Amazon announced its reopening for SFP enrollment in 2023.
What Are the Benefits of Amazon SFP?
Prime’s allure is undeniable, attracting devoted customers and enhancing conversions. Prime members tend to spend nearly double annually on Amazon compared to non-members.
SFP empowers sellers with the coveted Prime badge without reliance on Amazon’s famously exclusive fulfillment network, reaping several advantages from having their fulfillment solution:
1. Inventory Visibility: Amazon’s ecommerce warehouses excel in efficiency but often compromise merchant oversight and control. Once inventory reaches their facilities, Amazon denies sellers insight into its geographic spread. Multichannel merchants often desire more transparency to understand demand patterns and discover new market possibilities.
2. Brand Recognition: Fulfillment by Amazon (FBA) orders arrive in Prime-labeled packaging, causing confusion for some buyers who feel they bought from Amazon rather than the actual seller. SFP allows merchants to add extras in the package, like discounts for future purchases on more lucrative channels.
3. Streamlined Multichannel Fulfillment:Multichannel sellers should consider SFP to unify fulfillment across all sales channels. With Amazon Multichannel Fulfillment an option for some non-Amazon channels, larger marketplaces like Walmart restrict Amazon fulfillment. A diverse multichannel seller might choose between segmenting fulfillment between FBA and an external provider or adopting SFP.
Amazon SFP Requirements (and How to Meet Them)
Amazon is renowned for its customer-centric approach. Its dedication to swift shipping sets standards across ecommerce, thus enforcing strict fulfillment and delivery criteria for SFP sellers.
Distinct requirements for standard and oversized products include:
– Nationwide Prime coverage for standard-sized products vs Regional SFP for oversized
– Relaxed page view requirements for oversized products
Page view requirements as of February 1:
2-day delivery for 55% of page views of standard-sized items
2-day delivery for 30% of page views of oversized items
1-day delivery for 20% of page views of standard-items
1-day delivery for 5% of page views of oversized items
Page View Metrics Explained
Page views, rather than actual delivery performance, are used to gauge compliance, complicating SFP network creation. Factors like order cut-off times and viewing hours impact the percentage of 1 or 2-day delivery promises. SFP sellers must focus on fulfillment partners capable of analyzing these aspects, optimizing for page view adherence.
How to Find an Amazon SFP Solution
Finding an SFP solution is a complex task for third-party Amazon sellers. When scouting for an outsourced fulfillment partner to manage Amazon fulfillment, look for the following skills and SLAs:
1. Saturday Fulfillment: Amazon demands Saturday fulfillment for both standard and oversized products for SFP. Ensure potential partners have sufficient warehouses offering Saturday fulfillment.
2. Network Coverage: To meet SFP criteria, sellers need optimal 1-day ground delivery. Locate a partner with top-tier warehouse locations for maximal coverage and inventory carry cost efficiency.
3. SLA Commitments: Probe potential partners about their record in achieving these SFP SLAs:
– Zero-day handling time (Same-day fulfillment)
– Above 99% on-time fulfillment
– Order cancellation rate below 0.5%
– Amazon Buy Shipping labels for 99% or more orders
– Shipping Region Automation Template Support: Select a partner capable of fine-tuning your template to meet page view needs, refining your approach as market trends fluctuate.
The Cost of Amazon SFP
The new SFP standards mean that a one-size-fits-all fulfillment approach is unfeasible. For some, primarily those with mainly standard-sized products, the expense of creating a network to support page view percentages might surpass SFP’s benefits. For them, a segmented fulfillment strategy might be more economical.
Interestingly, some sellers find Fulfillment by Merchant (FBM) without the Prime badge aligns better with their growth objectives, as was the case for the brand HyVIDA. By shifting away from FBA, they attained greater control over customer interactions, boosting traffic to profitable channels and doubling annual ecommerce sales.
Amazon’s pursuit of top-tier customer service and rapid fulfillment will continue, and sellers must prioritize adaptability and scalability to thrive amid Amazon marketplace changes.