Commerce & Sales Channels

Amazon SFP [Seller Fulfilled Prime]: Grow Your Business on Amazon and Beyond

Commerce & Sales Channels
May 2, 2024
12 min read

With FBA’s recent fee increases, you may be considering switching to Seller Fulfilled Prime (SFP). This guide contains everything you need to know before making the switch.

What Is Amazon SFP?

Amazon SFP (Seller Fulfilled Prime) is an Amazon fulfillment option 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. Click here to learn more about SFP requirements.

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 catalog.

While the program was closed to new applicants for several years, Amazon recently announced that they will reopen SFP enrollment October 1, 2023.

Looking to make the switch to SFP? Learn more about Ware2Go’s award-winning SFP program here.

Table of Contents

What Are the Benefits of Amazon SFP?

Amazon SFP Requirements

How to Pass the SFP Trial Period

All About SFP Page View Metrics

Who Should Use Amazon SFP?

How to Find an Amazon SFP Solution

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 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 use custom packaging and create a branded unboxing experience for their customers.

Streamlined Multichannel Fulfillment

Merchants who sell on Amazon as part of a multichannel strategy should strongly consider Amazon SFP in order to 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.

Palouse Brand leverages SFP through their partnership with Ware2Go, a UPS company, so they can manage fulfillment across all of their channels through a single network and provide the same Prime-like delivery experience to all customers regardless of what channel they’re shopping on.

Amazon SFP Requirements

The most notable Prime requirement is fast and free shipping for Prime members. Amazon requires that SFP merchants display a free 1- to 2-day delivery promise to a certain percentage of shoppers based on their browsing location and inventory availability in the seller’s warehouses. Skip ahead to learn more about how Amazon measures page view compliance.

Amazon lumps products into three size categories and has different 1- to 2-day delivery requirements for each category. The categories are: Standard, Oversized, and Extra Large. The delivery requirements for each category are as follows:

In the video below, Ware2Go’s Senior Director of Supply Chain Strategy, Kelton Kosik, explains how to meet SFP requirements with a distributed warehouse network and an optimized shipping region automation template.

Other SFP requirements include:

  • 93.5% on-time delivery
  • Less than 0.5% cancellation rate
  • Weekend pickups and deliveries
  • Nationwide delivery coverage
  • Free returns
  • Valid tracking number

How to Pass the SFP Trial Period

Third-party sellers with an Amazon Professional selling account can register for the SFP trial to qualify for SFP status. The trial lasts for 30 days, during which time, sellers must meet the following requirements:

  • Ship at least 100 orders
  • Maintain an on-time delivery rate of at least 93.5%
  • Have valid tracking for at least 99% of deliveries
  • Maintain seller-initiated cancellation rate of less than 0.5%
  • Maintain a late shipment rate of less than 4%
  • Meet 1 and 2-day page view requirements (details below)

After the trial period, qualifying ASINs will automatically be enrolled in SFP, and the Prime badge will displayed on their listings.

Trying to qualify for SFP? Talk to an Amazon Fulfillment expert today.

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.

Choosing the right Amazon fulfillment option is complicated. While SFP offers greater visibility and control over Amazon sales, it may not be the right option for all third-party sellers, and it most likely won’t be the best option for every SKU within their catalog. Typically, SFP is a best fit for the following products and circumstances.

1. Oversized or Extra Large Products:

FBA is optimized for small, lightweight products and is priced most competitively for those profiles. It is typically more cost-effective to fulfill via SFP for any product in the Oversized or Extra Large category.

2. High-Velocity Products:

Amazon FBA inventory limits and dock-to-stock time SLAs can cause stockouts that hinder growth. High-velocity SKUs on Amazon should at least have SFP as a backup to FBA to keep listings active in the likely event of a stockout.

3. Customized Boxing or Kitting:

FBA does not support custom packaging or kitting. If those elements are an important part of your customers’ interactions with your brand, SFP is the best option.

Ultimately, there is no one-size-fits all Amazon fulfillment solution, and most successful third-party sellers will leverage FBA, FBM, and SFP as part of a multi-threaded solution to preserve margins and prevent single points of failure.

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 93.5% on-time delivery
  • Order cancellation rate under 0.5%

The Cost of Amazon SFP

Ever-evolving requirements for SFP 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. Especially for oversized products in less competitive categories, FBM will offer the highest margins per sale without damaging conversion rates.

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.

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