Dive Brief:
- Amazon will reopen enrollment for its Seller Fulfilled Prime program later in 2023 after an extended pause, according to a company announcement to sellers earlier this month.
- Seller Fulfilled Prime, launched in 2015, has Amazon sellers independently handle fulfillment while still offering one-day and two-day delivery speeds for Prime customers.
- Requirements for Seller Fulfilled Prime include shipping more than 99% of orders on time, having nationwide delivery coverage for all standard-size products and weekend pickup and delivery. Sellers must also complete a trial period to show they are able to meet the requirements.
Dive Insight:
Reaching Amazon's high fulfillment standards seem to be a strong focus for the Seller Fulfilled Prime program as its relaunch nears.
Amazon initially paused new seller enrollment as the program did not meet shopper expectations and wanted “to make sure we had more support for sellers and clear standards in place,” according to the announcement. Amazon did not specify when the pause occurred, but firms tracking the company say it has been in place for several years.
During Amazon's enrollment pause, many sellers have caught up to the company's high fulfillment expectations through partnerships and improvements in areas like demand planning and forecasting, said Steve Denton, CEO of UPS subsidiary Ware2Go, in an interview with sister publication Supply Chain Dive. Ware2Go offers various fulfillment services for Amazon merchants.
Seller Fulfilled Prime gives Amazon sellers more control over their brand, inventory and customer data, Denton added, but it's not a great fit for every merchant. Sellers in the program should have enough inventory to cover a footprint of three fulfillment centers and be able to move products on the weekends, he added.
"It's a high-reward, high-stakes game with very high standards," Denton said.
Products best-suited for Seller Fulfilled Prime include high-value items, items with variations and products with seasonal or unpredictable demand, according to Amazon.
RMW Commerce Consulting founder and CEO Rick Watson said in a LinkedIn post that Amazon will need to ensure stronger seller compliance with its standards for a successful reopening. He added that the reopening appears to be "another way Amazon is creating 'relief valves' in its fulfillment network so that Prime can keep expanding."
More sellers using their own fulfillment networks for Amazon-listed products frees up space in the company's warehouses. Amazon has been slashing excess capacity in its network after e-commerce growth eased from its pandemic-driven highs, helping it reduce operating costs.
