Amazon Prime is extremely popular among buyers and sellers alike. For buyers it comes with a range of goodies – such as same day free shipping, Prime Video, Prime Music, Prime Reading – all for a reasonably modest monthly fee.
The benefit of getting almost instant gratification for buyers has seen its popularity surge and it has created a significant number of buyers who’ll opt for items that are Prime rather than those that are not.
For retailers being able to have the Prime button against their items can, therefore, mean a huge boost in sales.
But who qualifies for those Prime badges?
- Vendor Central: First up is Amazon itself. If Amazon is selling the item directly then it’ll be Prime. If you are supplying Amazon through Vendor Central (where Amazon buy wholesale from you) then your goods will qualify because Amazon hold the stock and can ship the item the same day.
- FBA: Next are sellers using Fulfilled By Amazon (FBA) where the retailer ships the goods to an Amazon Fulfilment Centre (ie an Amazon Warehouse). Amazon knows it has the stock and can ship the same day. So again the items will get the Prime badge.
- SFP: Next are sellers operating under the Seller Fulfilled Prime scheme. This is where the retailer takes the order and ships the same day, subject to certain conditions.
So what option is best? What option is suitable for you?
- Vendor Central is by invite only. If Amazon like what you are selling then they will approach you. Maybe they have seen you doing well in merchant fulfilled sales and want a piece of the action. So Vendor Central is only an option for a few. You are acting as a wholesaler to Amazon. It will mean you are selling at wholesale prices, and like any wholesale/larger retailer relationship you will come under pressure on price point and reacting fast to Amazon’s ordering.
- FBA is an option open to most retailers. If your products can be affordably sent to an Amazon Fulfilment Centre and are not too big or bulky then this can work. There are costs associated with the storage and the shipping, but on the upside there is much less work to do for the retailer since Amazon are looking after everything including customer service. There are a few more things to consider though: if the stock does not sell quickly enough for Amazon then you’ll find yourself having to have it shipped back to you, or destroyed.
- Seller Fulfilled Prime is only suitable if you have a slick pick and despatch operation that can operate 6 or ideally 7 days a week. You’ll need to despatch (for free) the same day. SFP retailers need to print labels from the Amazon system and stick with the approved couriers. You might find the costs are not as good as going to your preferred courier directly.
If you decide that Seller Fulfilled Prime is for you then you’ll need to apply for it via your Seller Central account. You will then be put into a trial period where Amazon will watch your metrics with great interest. Basically you have to be 99% good at everything, ok that’s perhaps an over simplification but it’s not far wrong. They’ll keep a close eye on you for anywhere up to three months, and when they are happy then you’ll become a Prime Seller.
If something goes wrong for whatever reason and your metrics slip then you’ll lose your Prime status. At that point your best bet is to consider shifting to FBA. Amazon may be difficult to convince that you should get the SFP Prime badge back, so FBA might be the only option.
There is a lot to be gained in sales volume if you are able to join in with Seller Fulfilled Prime, but it’s clearly not without its challenges. You need to have a properly managed fulfilment option and you have to be certain that you have the stock in hand. Why not head over to the Amazon site and dig a little deeper.