Seller-Fulfilled Amazon Prime - What It Means for Sellers
Amazon’s Marketplace Web Service API began supporting “Seller-Fulfilled Amazon Prime” today, June 25, 2015. This means some sellers will now–or will soon–have the option of fulfilling orders with the same benefits of Amazon Prime. While complete details have not been announced, we assume sellers will only be invited to the program if they have a history of fulfilling orders quickly and not running out of stock.
As it has been described, Seller-Fulfilled Prime listings will receive the same benefits that FBA (Fulfillment by Amazon) listings have in regards to Buy Box eligibility.
Sellers who choose to participate in this new program will also be using the new MWS BuyShipping API to postage their shipping through Amazon. Postage purchased in this manner will qualify for Amazon’s negotiated rates and service levels: meaning two-day packages, Sunday delivery, and even same-day delivery promises by carriers will extend to these shipments, too.
This is great news for shoppers because a whole new wave of products could become Amazon Prime eligible, and at lower prices than ever before.
The impact on sellers could be significant as well. The most obvious opportunity is for large and/or heavy products. To use traditional FBA, the seller must pay the cost to ship products from their own facilities to an Amazon fulfillment center. By eliminating this cost and by shipping directly to the consumer using the Seller-Fulfilled Prime program, sellers will be able to offer lower prices, or increase their margins on these products.
The cost savings for large and heavy products is especially important because the major US carriers have been enforcing dimensional weight charges since January. After considering dimensional weight charges, many sellers had to raise prices significantly on some products to avoid selling them at a significant loss. We may see these products come back down in price as sellers are able to reduce their shipping costs while maintaining the Amazon Prime benefits offered by Seller-Fulfilled Prime.
The impact for sellers who ship smaller products is less obvious. It should give more benefits to sellers who already have their own highly-efficient fulfillment process who may be able to fulfill shipments on their own at a lower cost than by utilizing FBA.
This announcement about Seller-Fulfilled Prime is also noteworthy because it comes shortly after Amazon announced its “Small and Light” program earlier this month. Small and Light offers free shipping on small and low-cost goods that normally have higher shipping costs than the actual price of the product. Amazon is clearly spending a significant amount of effort on reducing shipping costs to consumers, making the shipping more efficient from end-to-end. Both of these changes should be beneficial to the consumer and drive more sales and increase loyalty to Amazon.com.
Brandon is one of the co-founders, CEO, and main data geek for Seller Labs. He started Seller Labs after finding no other tools that could provide the flexibility needed for his used-book business. He no longer sells online, but now guides Seller Labs as the lead innovator to make sure that our products remain on the cutting edge.