How to Know If Amazon SFP Is Right for Your Amazon Business
Amazon Seller Fulfilled Prime (SFP) is one of three fulfillment options for third-party Amazon sellers in the US.
With Amazon SFP, sellers manage their own fulfillment (either internally or through an outsourced fulfillment partner), as opposed to Fulfillment by Amazon (FBA), where sellers ship inventory into Amazon’s fulfillment network, and Amazon handles picking, packing, and shipping all of their orders.
There are two options for sellers who want to manage their own fulfillment on Amazon: Fulfillment by Merchant (FBM) and Seller Fulfilled Prime (SFP).
The most notable difference between FBM and SFP is that SFP listings are Prime listings, while FBM listings are not.
Amazon launched SFP in 2015 in order to free up capacity in their fulfillment network for their growing Amazon Basics brands without limiting the number of third-party sellers on Amazon Prime.
The program was so popular with third-party sellers that Amazon soon closed the application process for several years. However, on October 1, 2023, the program was reopened to new applicants, which led many Amazon sellers to re-think their Amazon US fulfillment strategy.
If you’re wondering how SFP could benefit your business and how to implement SFP in your Amazon strategy, this guide contains everything you need to know.
What are the Benefits of Amazon SFP?
Amazon has famously high standards for Prime delivery. Amazon SFP sellers are required to offer nationwide delivery and to guarantee 1- to 2-day delivery to a certain percentage of Prime shoppers.
Amazon closely monitors sellers’ compliance with these standards and will shut down an Amazon SFP listing if a seller fails to meet the requirements.
With such high expectations, many sellers may wonder if Amazon SFP is worth the risk, but there are several key advantages to managing your own fulfillment on Amazon that you should consider.
- Visibility and control: Managing your own fulfillment allows you to distribute inventory across your network as you see fit. It also means you won’t be subject to changing FBA inventory limits and unexpected changes in fee schedules.
- Multichannel enablement: Research shows that consumers shop across multiple marketplaces and sales channels. Managing your fulfillment across all channels through a single fulfillment network allows you to easily reallocate inventory to feed your most profitable channels.
- Brand recognition: When FBA fulfills an order, it arrives on your customer’s doorstep in Prime branded packaging. Often, this leads your customers to associate your product with Amazon, rather than directly with your brand. With SFP, you can use branded packaging to reinforce your brand with first-time and returning customers.
- Kitting and promotions: FBA doesn’t allow for special kitting or add-on promotions. With SFP you can create custom kitting or run a free gift with purchase promotion to drive incremental sales.
Control of customer relationship: If you’re looking to grow your brand on Amazon and beyond, you need to know who your customers are. When you fulfill through FBA, Amazon manages the customer relationship and owns the customer data.
With SFP, you can build your own relationships with customers to drive repeat sales and even drive them to your direct channels.
In fact, 63% of consumers would rather purchase directly from a brand if pricing and shipping options are comparable to marketplace listings
Is SFP Right for Me?
Ultimately, your Amazon fulfillment strategy will come down to striking the right balance between margin preservation and growth potential for your business.
There is no one-size-fits-all Amazon fulfillment solution for most Amazon sellers. FBA’s pricing structure is primarily based on size.
Typically products that fall into Amazon’s oversized and extra large size categories will be more cost-effective to fulfill SFP, while products in the standard size category will be more cost-effective to fulfill via FBA.
SFP also makes a great back-up plan for high-velocity FBA listings. FBA inventory limits can hinder sales potential.
Selling out of a product on Amazon leads to lost sales, and while that listing is down, you lose seller authority and search rankings.
For FBA listings at risk of stockouts, you should consider having a backup Amazon SFP ASIN that turns on as soon as your FBA ASIN stocks out.
How to Meet SFP Standards ?
SFP standards are difficult for most third-party Amazon sellers to maintain without support from an Amazon fulfillment expert.
If you’re looking for an outsourced Amazon fulfillment partner to support Amazon SFP, look for a few keys capabilities and SLAs, including:
Saturday Fulfillment & Delivery
Not all 3PLs support Saturday fulfillment or carrier pickups. Make sure your partner has adequate weekend coverage to keep you compliant with Amazon SFP requirements.
Network Coverage
Make sure you’re to meet 1- to 2-day delivery requirements via ground shipping by strategically distributing your inventory across multiple warehouses.
However, you want to make sure you have a thoughtful partner that doesn’t stretch your inventory too thin and increase your inventory carry costs. Network coverage is a delicate balance between performance and profitability.
SLA Commitments
There are some basic SLAs that Amazon SFP providers are required to meet, including:
- Zero-day handling time (Same-day fulfillment)
- Over 93.5% on-time delivery
- Order cancellation rate under 0.5%
Ware2Go’s Full-Service Amazon Fulfillment Solution
Ware2Go, a UPS company, has been successfully supporting SFP for third-party Amazon sellers since 2019. With a nationwide warehouse network, supported by industry-leading SLAs and UPS priority pickups, Ware2Go keeps sellers of all sizes grow their Amazon business on their terms with SFP.
Because there is no one-size-fits-all solution for Amazon fulfillment, Ware2Go offers a full-service Amazon solution – SFP, FBA prep, FBM, and Amazon marketing and listing services – all under one roof. Learn more about Ware2Go’s full suite of offerings here.
Phyllis Jackson
Phyllis Jackson writes about supply chain, fulfillment, and eCommerce sales channels to help merchants of all sizes learn how they can make fulfillment a competitive advantage for their business.