What is Seller Fulfilled Prime (SFP) by Amazon? How is SFP different from Fulfillment by Amazon(FBA)?
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Online sellers worldwide know well the importance of maintaining their presence on the e-commerce giant Amazon. While doing so, it is of vital importance to know how to manage the products in accordance with what is most beneficial for them. That is where the point arises as to what is Amazon Seller Fulfilled Prime and how is it different from FBA(Fulfilled by Amazon). Both these programs or services are basically the deciding factors for the management and shipping of your Amazon product inventory. However, it is not just about that as you may choose either of these depending upon the charges, profit margin, inventory, storage or warehouse and many other factors. So let’s see which one can be more suitable for a seller and its business.
What is seller fulfilled prime?
In contrast with Fulfilled By Amazon, in which Amazon keeps the seller product in its own warehouse, picks it, packs it and delivers the product to the buyer, Seller Fulfilled Prime does the opposite. If a seller has opted for the Seller Fulfilled Prime, a seller keeps the product inventory in its own warehouse, packs the ordered product on its own, and ships the product itself without any assistance from Amazon in the process. While there could be benefits of using it, there could be drawbacks too-but, that again depends on many other factors. It would be remiss to mention, although its quite understood, that under both these categories, sellers are considered as prime sellers. But there are certain requirements for a seller to use the seller fulfilled prime. Have a sneak peek at the conditions that make a seller eligible for fulfilled by prime.
- You need to go through a trial period in which you need to sell at least 300 orders.
- You need to have 99% on-time shipment record.
- You need to use the Buy Shipping services for at least 95% of your orders.
- You need to have less than 1% of the cancelation rate.
So let’s start an in-depth analysis of how Amazon seller fulfilled prime is different from Fulfilled By Amazon.
Differences between Fulfillment by Amazon (FBA) and Seller Fulfilled Prime (SFP)
Selling on Amazon while using the Fulfilled By Amazon costs you an amount which is not less especially if the product that you are selling is procuring you low-profit margins. You need to pay the picking, packing, handling as well as storage fee if you are using the FBA service. On the other hand, the seller fulfilled prime needs you to take all the actions, from packing, the shipping cost of different locations etc. So at one hand, where you may save yourself with seller fulfilled prime to pay to Amazon for the order fulfillment, you also have to manage all the expenses yourself. But in case you are a seller who has fewer inventories to manage, local shipping or convenience in shipping, you may go for the seller fulfilled prime and make it a light-on-pocket process.
Needless to say, if you have chosen the Fulfillment By Amazon, you need to send a specific number of your product inventories to the Amazon fulfillment centre. From there, Amazon picks your product, packs it, and sends it to the buyer. In seller fulfilled prime, you need to do all of this yourself. For that, you also need to have a warehouse or space where you can store your inventories. If you do not have a massive quantity of inventories, you may handle it yourself, or if you have a large quantity of products and space too, you may go for the seller fulfilled prime. However, if you don’t have a warehouse and have a greater number of inventories, you may opt for fulfilled by Amazon.
As has been already mentioned, for using the seller fulfilled prime, you need to have a warehouse where you may keep all your products. For keeping the products in a proper manoeuvre, you need to have a staff that can manage and maintain the product inventory and quickly pack and ship the products. This is also because you will need to deliver the products in the short period of time. As a result, more manpower means more investment. But if your product gets you a higher profit margin, you may afford to maintain the SFP accordingly. In such a case, you keep all the profits to yourself.
- Control Over Inventory
With seller fulfilled prime, sellers have complete control over the inventory of the product. They don’t divide the inventory between their own store and the Amazon fulfillment centre. So if you as a seller opt for the seller fulfilled prime, you may have the control over your inventory and you may distribute it in case you have multi-sales channel.
The return of your product is solely handled by Amazon if you have selected the Fulfilled By Amazon. On the other hand, if you have opted for seller fulfilled prime, you need to handle all the returns yourself at your own expenses. Although it negates the chances of customer fraud and makes it easy for you to handle the product return, it could also be an exhaustive task. For returns, you need to have a dedicated staff and department for the handling of return and customer communication.
For different Amazon sellers, the equation is different. Depending on their needs, they can opt for either of these two programs. However, both of these services have their own pros and cons and keeping them in mind, sellers may choose what is most suitable for them. Let’s have a look.
Pros of Fulfilled By Amazon
- Products are eligible for prime.
- Amazon handles your product from picking to shipping, and refund too.
- Being prime means more customers.
- No hassle in managing and storing products as no storage needed.
- Refund is taken care of, by Amazon.
- Timely delivery improves your seller rating, ranking, and your brand building process.
Cons of Fulfilled By Amazon
- Can be costly if profits margins are low or if you have a small business.
- Division of inventory diminishes your control over your it.
Pros of Seller Fulfilled Prime
- Products are eligible for prime.
- You have total control over your product inventory.
- No need to pay fulfillment fees or penalty fees in case inventory is in the Amazon fulfillment centre for more than 6 months.
- You can handle refund yourself, negating chances of fraud.
Cons of Seller Fulfilled Prime
- You need to have your own space for storage.
- You need to manage the whole process of picking and shipping which needs manpower.
- For refund management, you need to have a dedicated staff.
To know more about selling on Amazon, Click here.
No matter how many pros or cons these two programs or services have, both of these can prove to be ultimately beneficial if used in accordance with the type of business a seller has – small or big, with huge inventory or less. If all the conditions have been taken into consideration for a business, these services can take the businesses to a new peak of success, that’s the reason Amazon offers these services. But again, every business has its own needs and that decides which service to use as there is no one-size-fits-all factor in this area. At the same time, changing needs and growing business may change your needs to switch to the other service. So keep a tab on the market equations, your business, and your growth, and keep reinventing your business with the best of services.
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