In my last article I laid out the cases for and against the two Amazon programs that will allow you to stock your inventory on those golden Prime shelves: Fulfilled by Amazon (FBA) and Seller Fulfilled Prime (SFP).

Both programs are well designed in their own rights, although each has specific advantages and disadvantages based on the size, nature and aspirations of the business using them.

As I concluded, you certainly have more freedom with SFP, although it’s not for every company – especially those just starting out – and it’s not determined entirely by you. Like a prestigious country club, you may not be accepted if Amazon don’t like what they see.

But before we delve into what you can do to avoid being black balled by the retail giant, let’s look at a typical (but completely made-up) company that would benefit from being an SFP member:

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Super Sam's Sunglasses was born in sunny San Diego five years ago. It took a year or two to really establish the company in a competitive market, but thanks to effective marketing and great customer service they now shift around 500 orders a day, which translates to around $5 million in revenue per year.

Although they started off in a small shop in Del Mar Plaza, the business soon outgrew the stockroom out back and they moved to a 10,000 sq ft warehouse. While they still sell from their flagship store, which allows customers to physically browse their bestselling glasses, their main sales are generated online through multiple channels in addition to Amazon – including, Walmart, eBay and their own website.

If this sounds like your company – give or take a couple of figures – read on!

Amazons seller fulfilled Prime infographic

What you need to do to become an SFP Seller

Amazon are understandably fiercely protective of their Prime brand, and if you’re planning to sell on Prime without using Amazon’s fulfillment services, you can guarantee you’ll be scrutinized every step of the way.

As such, Amazon has a list of requirements that you will be expected to meet. Before we get into these, there are a couple of fundamental, non-Amazon-specific essentials you must consider.

Firstly, you will need to have a warehouse. If you are still running your business from a small shop, or even your garage, SFP is not right for you – as you will soon see.

Another thing to look at is your order fulfillment system. For start-ups, using Excel or physical paper records to keep track of your fulfillment line is a simple and straightforward way to go about things.

But if you’re planning to use SFP, then this is not suitable – you’ll likely buckle under the pressure of fulfilling on Prime using this system. It’s in your best interest to upgrade to dedicated warehouse management software (WMS), which can streamline the process and ensure accurate fulfillment.

Use a warehouse and have a fulfillment service more effective than paper and pens? You’re now ready to face Amazon’s requirements.

Providing you are eligible to be part of SFP (and don’t worry – Amazon will monitor your shipping history and let you know if you’re not!), you will be accepted and then told to embark on a trial period that spans 200 orders before your membership becomes official.

On these 200 orders, Amazon ask you to ensure three things:

Seller Fulfilled Prime Requirements

1) An On-Time Shipment Rate of at least 99% for Prime trial orders

Perhaps the most important and most difficult requirement to fulfill. As Amazon explain:

“Regardless of the shipping speed selected by the customer, Prime trial orders must be shipped on the same day the order is received, as long as the customer places the order before your cut-off time.”

This means you must prioritize the items that need to be sent out first. It’s vital that Prime orders leave the warehouse before standard ground – that’s why your next day customers are paying a premium.

So if Customer B orders his sunglasses an hour after Customer A, but Customer B is a Prime Member, guess whose order takes priority? And if Customer B orders one minute before cut-off, that’s no excuse – you still need to ship it out that day!

In 99% of all Prime orders, this is the way it must work.

2) Use of Buy Shipping Services for at least 95% of Prime trial orders

Amazon require you to purchase shipping from their own shipping API, called ‘Buy Shipping Services’. There are no two ways about this – if you are part of SFP you will have to use Amazon’s list of preferred delivery services. You cannot purchase shipping from somewhere else and then confirm shipping manually.

The good news is that you’ll probably be able to use the same shipping companies you did before joining SFP – however now you have to choose them through Amazon’s API.

3) A Cancellation Rate of less than 1% on Prime trial orders

Amazon insist on a very, very low rate of orders that are canceled for any reason other than by buyer request – less than one per cent on all orders. This means that you’d better have a good idea of exactly what’s in stock, before you accept that order.

This can be done manually or – more efficiently – by using good warehouse management software, which can ensure better inventory tracking and processing of orders. Of course stock-outs happen from time to time, but with just one per cent room for error, you’d better make sure it’s not a regular occurrence.

Reckon you can do it? You have about three months to find out, as Amazon give you between 5 and 90 days to fulfill these requirements – depending on how quickly you can do it.

So get your game face on – this process must go smoothly, as there is very little room for error.

More to Consider

Sound difficult? That’s because it is. You must have a hardworking, streamlined and efficient fulfillment process to ensure everything goes without a hitch. Because just a couple of snags can ruin your stats, meaning you have to start all over again.

But by following these requirements to a tee, not only do you impress Amazon enough for them to grant you your well-deserved Prime badge, but you impress your customers enough for them to return time and again.

Therefore, fulfilling orders quickly and avoiding order cancellations benefits your business in the long run – the higher the customer satisfaction, the more likely they will remain a customer.

But what about those times when the customer isn’t satisfied, with either the product they have received or the service you gave? No matter how much you strive to impress, whether you’ve accidentally sent the wrong item or the customer has simply changed their mind, cases will pop up that will require a refund.

This is when you need to meet Amazon’s customer service and returns requirements for Prime, which can be tricky to adapt to.

In the past you may have set your own returns policy, tailored specifically for your line of business. Not anymore – even though the items are returned directly to you, you must still adhere to Amazon’s Seller Return Policy.

In brief, sellers using SFP must provide a return address within the United States along with a pre-paid return label. If not, you must offer a full refund without requesting the item be returned.

Apply to be an SFP member

If you know you have what it takes to be an independent Prime seller via the Seller Fulfilled Prime program, you can apply directly through Amazon.

The requirements are tough but, with a well-run warehouse and good warehouse management software watching your back, they are by no means impossible.

When you are eventually accepted, pop open the Champagne – you deserve a few glasses. But ensure your hangover is resolved quickly because you’ll need to be back on your A game pretty quickly – Amazon never sleeps.

As you brandish their coveted Prime badge all over your items, you can rest assured that they will be monitoring your every move, watching that you don’t slip up.

You’ll need to continue to perfect your fulfillment processes and ensure your warehouse is running at optimal efficiency – using both software and non-software solutions.

For more posts like this remember to subscribe to the blog, and tune in next time where I’ll run through how you can get the competitive edge with Seller Fulfilled Prime.

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