A Complete Guide to Amazon Seller Fulfilled Prime (SFP) | Ware2Go

What Is Amazon SFP?

Amazon SFP (Seller Fulfilled Prime) is an Amazon fulfillment that allows Prime sellers to fulfill their own orders, either through their own internal fulfillment operations or with a 3PL partner or other outsourced fulfillment solution. The program was launched in 2015 to help clear space in Amazon’s warehouses to make room for their newly launched Private Label brands.

Merchants enrolled in Amazon SFP store inventory in their own (or partner) warehouses, handle all fulfillment, and manage customer feedback. Sellers are required to maintain Prime service levels (most notably free 2-day delivery), which Amazon monitors closely, shutting down SFP accounts that drop below 99% on-time fulfillment or 97% on-time delivery.

Amazon SFP was a boon to both Amazon and its third-party sellers. It enabled sellers to take advantage of the boost in sales associated with the Prime badge without giving up visibility into their inventory levels and distribution and often saved them money on fulfillment costs. Amazon benefited from reduced fulfillment costs and additional warehouse space but was able to maintain a diverse SKU profile in the Prime catalogue.

The program was so popular that several years after it was launched, SFP was closed to new applicants. Qualifying sellers interested in the program were only given the option to sign up for the waitlist.

What Are the Benefits of Amazon SFP?

There’s no doubt that the Prime badge draws in loyal shoppers and drives conversions. In fact, Prime members spend almost twice as much money on Amazon each year as non-members.

Amazon SFP gives sellers the benefit of added visibility and increased sales that ultimately come with the Prime badge without fulfilling their orders through Amazon’s notoriously proprietary fulfillment network. There are many ways that sellers benefit from configuring their own fulfillment solution:

Inventory Visibility:

Amazon’s ecommerce distribution centers are highly efficient but sacrifice merchant visibility and control to achieve that efficiency. Once inventory is inbounded to their facilities, Amazon does not give merchants insights into the geographic distribution of that inventory. Multichannel merchants likely want more visibility to gain insights into their demand distribution and new market opportunities.

Brand Recognition:

When orders are fulfilled by FBA, they arrive on the customers’ doorstep in Prime-branded packaging. This can be a confusing experience for some consumers who feel more as if they’ve made a purchase from Amazon itself rather than the individual seller. When merchants are fulfilling their own Amazon orders they can also include additional items in the package, like a coupon code for a purchase from one of their more profitable sales channels.

Streamlined Multichannel Fulfillment:

Merchants who sell on Amazon as part of a multichannel selling strategy should strongly consider Amazon SFP in order manage fulfillment for all of their sales channels through a single network. Amazon Multichannel Fulfillment is an option for some non-Amazon channels, but some of the larger marketplaces like Walmart won’t allow fulfillment by Amazon, so a merchant with a diverse multichannel strategy will likely have to choose between segmenting fulfillment between FBA and an outside provider and moving to SFP

Looking streamline multichannel fulfillment? Talk to one of our fulfillment experts.

Amazon SFP Requirements (and How to Meet Them)

Amazon is famously customer obsessed. In fact, their commitment to fast shipping drives consumer expectations across all of ecommerce. For that reason, they have high fulfillment and delivery stands for SFP sellers.

The requirements for standard-sized and oversized products are notably different and offer some advantage to sellers of oversized items. The differences include:

• Nationwide Prime coverage for standard-sized products vs Regional SFP for oversized
• Less stringent page view requirements for oversized products

Page view requirements are Amazon’s unique method for measuring compliance with 1- to 2-day delivery guarantees. SFP sellers must display a 1 or 2-day delivery promise to a certain percentage shoppers who view their product, whether the shopper actually makes a purchase or not. The page view requirements as of February 1 are:

• 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

Measuring compliance based on page views rather than actual delivery performance makes building an Amazon SFP network incredibly complicated. The greatest complicating factor is that compliance with page view requirements depends greatly on order cut-off time and the time of day that shoppers are looking at the product detail page.

For example, if a seller’s order cut-off time for same-day fulfillment is 2:00pm, any shoppers viewing their products after 2:00pm will see a 2-day delivery promise. The percentage of page views that display a 1 or 2-day delivery promise is going to be highly contingent on what time of day shoppers are most active. For this reason, SFP sellers should prioritize a fulfillment partnership that will build a network based off of all of these contributing factors and can monitor for the most active times of day and days of the week and optimize for page view compliance.

Looking for an SFP solution? Reach out to one of our Amazon fulfillment experts.

How to Find an Amazon SFP Solution

Very few third-party Amazon sellers can meet SFP standards on their own. If you’re looking for an outsourced fulfillment partner to manage your Amazon fulfillment, look for the following capabilities and SLAs to ensure they can meet Amazon’s requirements.

Saturday Fulfillment

Amazon requires Saturday fulfillment for both oversized and standard sized products for SFP. When you’re vetting potential partners, make sure they have enough warehouses within their fulfillment network that offer Saturday fulfillment.

Network Coverage

Most SFP sellers will have to optimize for 1-day ground delivery in order to meet requirements. Find a partner that has premium warehouse placement for the best possible coverage. You should also find a partner who has the expertise to stock the minimum number of warehouses needed to meet requirements in order to keep inventory carry costs low.

SLA Commitments

When vetting potential partners, ask for data on their history of meeting the following SLAs for SFP:

• Zero-day handling time (Same-day fulfillment)
• Over 99% on-time fulfillment
• Order cancellation rate under 0.5%
• Amazon Buy Shipping labels used for at least 99% of orders

Shipping Region Automation Template Support

Setting the right Shipping Region Automation Template can make or break your SFP strategy. Choose a partner who will help you optimize your template to meet page view requirements and will help you refine your strategy as demand patterns shift.

The Cost of Amazon SFP

These new requirements mean that there will truly be no one-size-fits all solution for Amazon fulfillment. For some sellers, especially those with a majority of standard-sized products in their catalogue, the cost of building a distributed network to support these page view percentages may outweigh the benefits of SFP. These merchants may find that managing a segmented fulfillment strategy, while operationally burdensome, will ultimately be more cost-effective in the long-run.

Surprisingly, some sellers may even that dropping the Prime badge altogether and fulfilling through FBM (Fulfillment by Merchant) better supports their long-term growth plan. This was the case for hydrogen water brand, HyVIDA. They found that by moving fulfillment away from FBA and dropping the Prime badge, they gained a new level of control over their customer interactions that enabled them to drive traffic to more profitable channels and actually double their ecommerce sales year over year.

Amazon will likely never drop its pursuit of the highest standards of customer service and fulfillment speed, and should prioritize flexibility and scalability in their supply chain in order respond and succeed in the face of this and any future changes in the Amazon marketplace.

Click here to learn more about how Ware2Go is solving logistics problems for merchants of all sizes or reach out to one of our logistics experts to learn more about which Amazon fulfillment option is best for your business.