Before joining SFP, sellers should weigh the operational costs of handling their own fulfillment & shipping vs. the gains of growing their sales by being able to list and sell more products as Prime.
Below are a number of factors to consider when evaluating the potential costs of SFP:
1 | Shipping zones Sellers must decide what zones they are willing or able to ship to in order to comply with Prime’s two-day delivery requirements. If you have a fulfillment center on the West Coast, you will need to decide if you want to offer your products as Prime across the nation or confined to areas near your fulfillment center. There are many factors that go into this decision such as profit margins, price points and your business model..
2 | Add or change fulfillment locations If you decide to offer Prime to both coasts, you may want to add a fulfillment facility or 3PL on the opposite coast or use a distribution facility to a more central place in the US to cover all states. You will need to do a cost analysis to see whether adding a new distribution facility, moving your distribution center or simply shipping across the multiple zones is more beneficial for your business.
3 | Fulfillment centers that work with Prime Having a fulfillment center that has the labor, technology and resources to fulfill Prime orders in the allotted time is absolutely critical. If you do not follow the Prime shipping requirements, you can easily have your Prime status revoked. Make sure you use distribution center that can commit to following Amazon’s strict shipping rules.
4| Fulfillment strategy It is important to have a cohesive fulfillment strategy as your business grows and you add online channels to your fulfillment infrastructure. Your logistics partners should be able to work with an inventory management system that can not only handle Prime orders but orders from multiple online channels.
5 | Amazon’s return policy Amazon has recently changed its SFP returns policy to include automatic returns. What that means for SFP sellers is that they need to auto authorize returns regardless whether buyer is a Prime member or not. Amazon’s customer service will handle all customers’ inquires inquires specific to SFP returns which saves sellers time but also removes the sellers’ ability to offer an alternative to returns.