Advantages of Seller Fulfilled Prime (SFP)
1. More exposure to Prime Members
SFP is treated the same as FBA products, which means the sellers’ product gets surfaced more frequently to Amazon Prime Members. More exposure leads to more sales conversions. Amazon recently stated, “Seller fulfilled listings that became Prime-eligible for the first time through Seller Fulfilled Prime experienced an average sales uplift of more than 50%.” Also, it’s worth noting that the average Prime Member spends 2X more than the average non-member annually on Amazon.
One of the biggest selling points of FBA’s program is that it offers sellers the unique opportunity to reach Amazon’s biggest spenders: Amazon Prime Members. SFP provides this same level of exposure.
2. Seller gains more control over their inventory
When using FBA, after you send your products to one or some of Amazon’s 100 fulfillment centers, you lose a lot of control and visibility of your product. This can be exasperated by Amazon’s ever-changing storage fees.
SFP allows you to ship your inventory from a non-Amazon warehouse giving you more control of your amazon inventory. This is especially advantageous if you have multiple sales channels or a seasonal product in which you foresee sales spikes during the holidays like Amazon Prime Day, Black Friday, or Cyber Monday.
3. Better control of long-term storage fees
As Amazon continues to see record sales quarters, demand for warehouse space is heating up and the growing cost to store products is being passed down to the sellers. Sellers are at the mercy of Amazon’s ever-changing, often unpredictable storage fees. On the flip side, SFP gives sellers full control over their warehouse costs and needs. This can be a big cost-saver, especially for sellers who have managed their supply chain well and have a good grasp on their sales forecast.
4. Control fulfillment and shipping fees
While FBA offers a number of advantages, the FBA fees can quickly erode a seller’s profit. You will need to pay fulfillment fees with Amazon as well as pay for the freight to get the inventory to the Amazon warehouses. By using SFP, sellers can eliminate the inbound ship cost to Amazon and have more control over their fulfillment costs.
5. Product flexibility
Product enhancements and changes are the norms for most industries, especially in the consumer electronics space. Oftentimes, sellers need to make last-minute modifications to packaging’s, such as including a product pamphlet or a sticker calling out an important feature.
However, once the product arrives at the Amazon fulfillment center, these changes are nearly impossible to execute. While Amazon is a well-oiled machine pumping out millions of products per day, they are not set up to accommodate special requests. With SFP, sellers maintain inventory at their own warehouse or 3PL, providing them access and flexibility to their products.
6. Better control over returns and refunds
One of the major pain points since the inception of FBA has been around customer returns and refunds due to human error at an Amazon fulfillment center. Whether it’s a lost, damaged or late package caused by Amazon which results in a return or refund, the onus falls on the seller to file a claim with Amazon to get their money back. In fact, sellers working with Amazon Customer Service to get reimbursed or deal with fraudulent buyers has become so common, that there are countless third-party services to help sellers manage the process.