Until recently Amazon offered two distribution channels for Sellers. Merchant fulfilled and Fulfilled by Amazon (FBA). Both options start off the same by creating a listing within the Amazon marketplace. The difference is with who ships the order and provides customer service.
- Fulfilled by Amazon is often a better choice for most sellers because it allows you to take advantage of Amazon’s massive warehouse and distribution capabilities. Once the product is shipped to Amazon for FBA orders Amazon handles the entire transaction and shipping process. This comes with a cost that can usually be justified for most products.
The biggest advantage to choosing FBA is this was the only way to qualify your product for Amazon Prime and statistics show that your sales will increase if your product displays the Amazon Prime logo.
- Merchant Fulfilled is when the merchant handles all aspects of the order including packing, shipping, returns, and all the customer service in between. The benefit to this is that Amazon only charges the 15% referral fee of the sale price (the merchant is responsible for the packing and shipping fees). The downside is that Amazon Prime shoppers are loyal to Amazon Prime products. If the product does not display the Prime logo, shoppers will often pass the listing by.
Amazon has recently introduced a third option, Seller Fulfilled Prime program. Seller Fulfilled Prime is a hybrid of Merchant Fulfilled and Amazon Prime. All orders and customer service are managed by the merchant. However, the listing receives the benefit of a Prime logo. At first glance, you make think, Wow! What a great deal! And it potentially can be. The only real way to determine if Seller Fulfilled Prime is worth it, is to work the numbers.
Who would benefit from Seller Fulfilled Prime?
- Heavy and/or bulky products that would usually be too costly to send in to Amazon warehouses to be fulfilled by Amazon.
- Products that have many different Variations such as Clothing and Jewelry can be difficult to manage utilizing FBA
Here’s the fine print – Seller Fulfilled Prime merchants are required to fulfill orders on the day the order is placed, 24/7. In addition, Sellers have to earn the right to be offered the Seller Fulfilled Prime option by having an established Amazon seller account with high seller metrics.
To see if your account qualifies, go to Amazon Seller Central home page and search for Seller Fulfilled Prime, or visit us at www.AMZALLIANCE.COM