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A Glance at Amazon New SFP Requirements and What It Means for Sellers

By:
Rakuten Super Logistics
August 28, 2020

With more than 100 million active users, Amazon Prime has always been an attractive option for most online sellers. It became an even more enticing option after Amazon introduced the Seller Fulfilled Program (SFP) in 2016. The SFP program allows sellers to use Amazon Prime's badge on orders they fulfill individually either via in-house resources or third-party logistics. Although the eligibility requirements are pretty stringent, Amazon's SFP has been quite the game-changer. However, now that's about to change as the e-commerce giant recently announced changes that will make it even harder for merchants to meet the new requirements of the SFP program.

SFP Merchants to Provide Same Day Delivery for All Orders

Amazon Prime has been praised time and time again for its super-fast and convenient deliveries. In a bid to enhance the program's efficiency, the e-commerce giant recently announced that as of February 2021, all merchants on the SFP program will be required to:

  • Utilize shipping strategies that facilitate Saturday order deliveries and pickups
  • Meet one and two-day delivery promises
  • Offer nationwide delivery for all standard sized products

According to the company's spokesperson, these changes will ensure all sellers using the Amazon Prime badge are up to par with the program's delivery standards. Learn how to have a great holiday season with these merchandise fulfillment tips.

In the announcement, the company reported that before the Covid-19 pandemic, only less than 16% of merchants in the SFP program managed to live up to the two-day delivery promise. Now, with two-day delivery being the standard shipping duration everywhere, the company seeks to stand out from competitors like Walmart by setting the pace for same-day deliveries.

Implications of the New SFP Shipping Requirements

On the one hand, the new SFP shipping requirements are great as they mean even faster shipping times for Amazon Prime subscribers. On the other hand, however, they'll put more pressure on the merchants. Why? Well, the new regulations mean that at least 30% of SFP merchant page views for items sold using the Prime badge must be fulfilled within the same day. They also suggest SFP sellers should own at least one warehouse to facilitate Saturday deliveries conveniently. In theory, this is next to impossible as a majority of merchants in the Seller Fulfilled Program joined because the program meant skipping FBA and allowed sellers to diversify away from Amazon handling everything while also giving them control on shipping methods, packaging materials, etc. In that light, Amazon's SFP requirements could mean that:

Most SFP Sellers Will Likely Opt for FBA

As noted, keeping up with Amazon's new requirements means merchants will need access to multiple warehouses across the country so as to avoid paying for expedited shipping options which is a costly endeavor. Add in the need for Saturday delivery and merchants fulfilling on their own will find the math hard to overcome. Faced with these constraints, it’s expected most SFP merchants will simply hand over the reins to FBA to handle-- as this is the easiest way they can stay in compliance with Amazon's new delivery requirements.

Amazon will Build Even More Warehouses

With the SFP program being restricted to merchants with warehouses and a majority of sellers shifting to the FBA program, Amazon will also be left with no option but to expand its logistics to create room for merchants who make a shift from SFP to FBA.

A Reliable Logistics Provider is Your Way Out

Amazons SFP program offers quite a long string of perks to merchants. For instance, it gives sellers exposure to over 100 million Amazon Prime subscribers. On top of that, it allows them control over order fulfillment costs since they get to choose a logistics service they deem suitable for their operations. This begs the question, do the new requirements mean you give up such benefits? The short answer to that is no. As mentioned earlier, Amazon is only seeking to improve service delivery and client satisfaction. If you can live up to the promise of same-day and weekend deliveries, you don't have to opt-out.

At a glance, this may seem impossible if you are just a small-scale seller. However, with a reliable third-party logistics service like Rakuten Super Logistics, both small and medium scale merchants can meet and exceed these new regulations. As a well-established 3PL provider with up to 15 distribution centers, we allow you the flexibility to keep up with Amazon's new SFP requirements without having to sacrifice cost and efficiency. Rakuten also allows you to diversify your vendors so as not to keep all of your eggs in one basket.

At the same time, our service will enable you to enhance clientele satisfaction this upcoming holiday season and enjoy the immense benefits of Amazon's Seller Fulfilled Program. Make the shift today so you can enhance service delivery and customer satisfaction just in time for the holidays. Get in touch with us today for an obligation-free consultation and to learn more about our services.