New Amazon SFP Rules Coming in 2021
Amazon recently announced changes to its Seller Fulfilled Prime (SFP) program, which allows Fulfilled by Merchant (FBM) sellers to ship items directly to domestic Prime customers from their own warehouse or a 3rd party logistics provider. By contrast, Fulfilled by Amazon (FBA) sellers pay the retail giant to store, package, and ship orders – guaranteeing them access to Prime customers. Launched in 2015, SFP is designed to provide three key benefits to sellers who prefer to use their own fulfillment methods:
- Reach the most loyal Amazon customers. With Seller Fulfilled Prime, you can offer your products to a wider network. Prime members will be able to easily find your products as they use Amazon on-site filters, giving your ASINs more visibility and discoverability.
- Compete more effectively for the Buy Box. Products listed with Seller Fulfilled Prime have increased chances to win the Buy Box. Winning the Buy Box means that when customers click on “Add to Basket”, their default option is to buy the product from you.
- Offer guaranteed delivery date messaging. Seller Fulfilled Prime orders display FREE Two-Day Delivery messaging to Prime customers, making them more likely to make multiple and repeat purchases.
Changes to Amazon SFP Effective February 1, 2021
In August, Amazon announced stricter delivery requirements for SFP sellers. In an email to sellers, the company wrote: “Prime members consistently tell us they want free and fast shipping. This is why Amazon is making significant investments in our fulfillment and transportation capabilities to make prime faster, transitioning from a 2-day to a 1-day delivery program. As we continue to improve the Amazon Prime experience for customers, we want to ensure SFP meets customers’ expectations of Prime.” The following SFP changes will take effect February 1, 2021:
- SFP sellers will be required to use shipping methods that support Saturday delivery and pick-ups to provide customers with a more consistent delivery experience throughout the week.
- Sellers will be required to meet targets for one-day and two-day delivery promises. These delivery promise metrics measure the percentage of customer page views that displayed a one or two-day delivery promise when your SFP offer was the featured offer, regardless of whether a purchase was made. The delivery speed targets ensure that customers have a consistent experience regardless of who fulfills their Prime order.
- To help you meet the targets for one-day and two-day delivery promises, Amazon is launching a new dashboard that measures the quoted delivery speed of your SFP offers. This dashboard monitors two new metrics: Percent of One-Day or less Detail Page Views and Percent of Two-Day or less Detail Page Views.
- SFP sellers will be required to have nationwide delivery coverage for all standard size delivery products. You can see which of your products are standard size or oversize on the Manage SFP page.
Why Sellers Need the Amazon Prime Badge
While the new changes will affect only a portion of Amazon sellers (the SFP program is not currently accepting new registrations), they underscore the importance of securing the Prime badge. For the customer, this means quick deliveries among other perks. Depending on where you live, Prime members are eligible for free two-day, one-day, and even same-day delivery for millions of items.
From a seller’s point of view, the Prime badge means access to the buying power of 150 million Prime members. This opens the door to exponential sales growth. A report from Forbes revealed the following statistics highlighting the purchasing power of Prime members:
- 46% of Prime subscribers make weekly purchases, versus only 13% of non-Prime members
- More than half (51%) of US households will be subscribed to Prime in 2020, an increase from the 45% last year
- 70% of Americans with incomes of $150,000 or more who shop online have Amazon Prime memberships
- Prime buyers tend to spend up to 4.6 times more than their non-Prime counterparts
Final Thoughts
Meeting the new SFP delivery requirements will likely be challenging for many sellers. Some analysts have argued that these changes are an attempt by Amazon to transition SFP sellers to utilize FBA services, which require additional fees and generate more revenue for the retail giant. Others argue that the SFP changes are simply designed to uphold delivery standards for Amazon Prime. Either way, it’s paramount that you retain your Prime badge in order to stay competitive on the platform. While these new requirements don’t take effect until next year, Channel Key advises all SFP sellers to begin making the necessary changes that will enable you to meet Amazon’s new shipping standards. To learn more about customizing a strategic plan that will help you keep your Prime badge as an SFP seller in 2021, contact us today for a free consultation.
REFERENCES:
www.cnbc.com/2020/08/18/amazon-pushes-sellers-to-meet-prime-delivery-guarantees.html
