Amazon’s new service offers the benefits of Prime while leveraging existing infrastructure and business partnerships for companies that qualify.

For businesses selling through Amazon, opting into Prime can be something of a double-edged sword.

On the one hand, Prime now boasts more than 80 million active members, a group of Amazon shoppers who, on average, spend twice as much as non-subscribers. Tapping into this audience can lead to substantial growth for companies looking to scale in the e-commerce economy.

On the other hand, most companies looking to benefit from Prime have also ended up opting into Fulfillment by Amazon (FBA), Amazon’s proprietary shipping and logistics operation. While this program does offer a number of benefits, for most sellers it will mean higher packing, shipping, and storage fees, as well as diminished flexibility and agility.

However, a more recent option, Amazon’s Seller Fulfilled Prime, has opened new opportunities for businesses with the experience and track record to qualify. Here’s what you need to know about this increasingly popular service — and how it can drive value for your ecommerce operation.

Seller Fulfilled Prime Puts Shipping and Logistics Into Your Hands

In the past, Prime status was afforded only to orders fulfilled with FBA. If you wanted access to the subscription-based audience who, on average, spends $1,300 per year on Amazon, you’d have to accept Amazon’s restrictions — including FBA’s fees and shipping practices — and rely on its shipping infrastructure.

With Seller Fulfilled Prime, however, Amazon enables certified vendors to list SKUs of their choice with the Prime badge, fulfilling orders from their own facilities or with the assistance of third-party logistics (3PL) providers. As long as you can reliably deliver Prime-designated products within forty-eight hours — the hallmark of Amazon Prime is free two-day shipping for members — and you work with Amazon Logistics, they’ll group your products with other Prime offerings fulfilled through FBA.

Only Proven Sellers are Eligible to Participate

The catch is that you’ll have to operate within Amazon Prime’s strict parameters in order to qualify. This means that small businesses still getting their feet wet in the world of e-commerce likely lack the sales volume and infrastructure to make the jump from FBA or FBM (Fulfilled by Merchant) to Seller Fulfilled Prime.

To qualify for Seller Fulfilled Prime, you need to be eligible for Premium Shipping to ensure that you can operate with the precision and professionalism that Prime customers have come to expect. This includes on-time delivery rates of at least 92%, a valid tracking ID for at least 94% of orders, and a cancellation rate below 1.5%. Fulfilling orders through Premium Shipping will allow Amazon to determine whether your business can handle one- to two-day shipping schedules.

If your statistics for the past 30 days meet these minimum requirements, you’ll become eligible to participate in a Seller Fulfilled Prime trial. During this trial, you’ll have to fulfill at least 200 Prime orders while meeting the following criteria:

  • An on-time shipment rate of 99%
  • Use of Amazon’s Buy Shipping Services for 95% of orders
  • A cancellation rate below 1%

If you fail to maintain these requirements for 200 Prime orders by the end of the trial period, which lasts between five and 90 days, your metrics will reset and you’ll need to begin again.

Both Amazon and Sellers Benefit from the Service

When Amazon launched the beta version of Seller Fulfilled Prime, it was facing a logistical dilemma. In order to satisfy the growing number of Prime members, an increasing volume of inventory needed to be stored in its fulfillment and distribution centers. With the construction of one such hub costing up to $200 million, Amazon needed a way to manage the threat of congestion. Seller Fulfilled Prime allowed the company to improve options for sellers while buying valuable time to develop additional fulfillment centers of its own.

Thanks to Seller Fulfilled Prime, online vendors looking to sell Prime-eligible products are now no longer required to pay FBA’s fulfillment and storage fees. For businesses with warehouses and logistical teams of their own — and who previously had to keep inventory in Amazon fulfillment centers just for FBA/Prime opportunities — the chance to rely on their own infrastructure and personnel will save money and provide greater control over quality, packaging, and shipping processes.

Amazon Seller Fulfilled Prime Makes Strategic Partnerships a Necessity

If you meet the eligibility requirements, Seller Fulfilled Prime can offer your company access to more than 80 million high-frequency Prime buyers — all while eliminating the costs FBA charges to utilize its infrastructure. Whether you’re a large-scale operation with plenty of inventory space of your own or a medium-sized business hoping to drive growth by selling on Prime, experienced 3PLs and integrated logistics services providers (ISPs) are well-positioned to support your shipping and logistics needs.

With over 20 years of experience, Primary Freight has the proven infrastructure and trusted personnel you need to thrive in the Seller Fulfilled Prime program. Whether it’s storing, picking, packing, or shipping, we’ll help you maintain your Prime eligibility, boost your shipping ROI, and lay a foundation for long-term growth.

If you’d like to learn more about Primary Freight’s array of award-winning shipping and logistics services, contact us today at (800) 635-0013.