Pros & cons of Amazon Prime; SFP & FBA
Unlike vendors who already own the Prime badge the moment Amazon buys stock off them, sellers must earn the blue badge. There are only 2 ways in which a seller can achieve the Prime badge. There are through Seller Fulfilled Prime (SFP) or Fulfillment by Amazon (FBA). Both options are great programmes to enrol your ASINs in but they do have their pros and cons. It is therefore integral to decide which option best suits your brand and Amazon strategy. These strengths and weaknesses can be defined down to 4 key areas; simplicity, cost, brand control & global sales.
FBA is a much simpler system to get to grips with than SFP because all the seller must worry about is shipping it to the fulfilment centre. Amazon then takes care of the rest including distribution and returns whereas SFP is much more hands on. The seller is wholly responsible for the entire sales journey from packaging to shipping and organising returns. Furthermore, the Prime badge is dedicated for guaranteed fast delivery which SFP sellers must achieve or lose the badge. This means FBA sellers can turn their attention to other business matters safe in the knowledge that Amazon is sorting out the shipping process. However, you will need to think about how often you should ship more stock into storage or risk losing the buy-box completely if you run out of stock. Overall, since there is more for Seller-Fulfilled Prime sellers to have to organise, selling via FBA is much simpler to get to grips with.
Determining costs can be much easier to do with SFP as the only extra fees come from your distribution plan. Whereas Amazon charges storage and fulfilment fees for using FBA. These fees can accumulate and be costly especially with large products which take up more room and thus cost more. Also, if products are left in Amazon’s storage, fees can jump significantly so sellers must also consider how fast or slow their products will sell. In this case, Seller fulfilled Prime trumps FBA because there are less fees overall.
FBA sellers lose a lot of control over their product once it is sent to Amazon to be shipped. Amazon packages the items in the fulfilment centre so some branding of your company will be lost in the process. On the other hand, Seller-fulfilled Prime allows brands the freedom to ship their products as they wish meaning they can brand their boxes or insert personalised notes to the buyer to improve repeat custom. Additionally, they can encourage buyers to give reviews by leaving notes asking them to do so. In short, Seller-Fulfilled Prime allows brands to keep much more control over their products than those enrolled in the FBA programme.
Lastly, which option you consider using should be dependent on the locations you are selling to. Amazon FBA allows for shipment throughout all 6 of their Amazon EU marketplaces; Spain, UK, Italy, France, Netherlands & Germany, for a smaller fee than distributing your ASINs independently via Seller Fulfilled Prime. Pan-European FBA Sellers can sell much more easily across multiple marketplaces as Amazon will move the products where they expect demand which Seller-Fulfilled Prime sellers would struggle to compete with without the proper logistics already in place.
Is gaining Amazon’s Prime badge still not improving sales?
The Prime badge isn’t the be-all and end-all of selling on Amazon. Even if you have the blue badge, there might be another seller who has it too. Therefore, if your listings aren’t optimised then you may still lose out on winning the buy-box. Our Amazon data experts have technology in place which can tell you exactly what it is about your listing that is letting you down. Whereas our content team and account management crew can fix it to ensure that the buy-box is yours for the taking. Contact us today for a free audit and find out what we can do for your brand.