Written by: Rhonda Giebelstein, Online Marketplace Strategist
Amazon Prime Day starts at 3 p.m. Eastern on Monday, July 16, and will run through the end of Tuesday, July 17. Many Amazon users are under the impression that if an item is listed as Prime, it ships from an Amazon warehouse. However, in many instances that is not the case.
Amazon sellers have options when it comes to how their products are fulfilled.
Read on to understand the different Amazon fulfillment options available to sellers, and what to consider when deciding which fulfillment option is best for your business.
Top 3 Amazon Fulfillment Options
There are three main fulfillment avenues for Amazon sellers to choose from: Fulfilled by Amazon (FBA), Seller Fulfilled Prime (SFP), and Vendor Central (VC). Each allows a Prime badge to be put on the items for sale. But, to maintain that status, each fulfillment option has certain standards that must be met. It might sound confusing, but stick with me!
Amazon gives the consumer this information within the listing of each item, but many consumers don’t pay attention to it. They have come to expect consistently speedy, accurate, and damage-free delivery, no matter the fulfillment source. Let’s break it down.
1. Fulfilled by Amazon (FBA)
When an item is sold as FBA, it’s just as it sounds. The item is sold by a seller on Amazon, but it’s fulfilled by Amazon. This means that the seller packages and ships their items to an Amazon Fulfillment Center, and Amazon ships the items to the consumer on behalf of the seller.
FBA gives you access to an already established logistics process (Amazon handles storage, picking, shipping, and returns). However, it comes at a cost in the form of fulfillment fees per pound and warehousing fees per cubic foot.
2. Seller Fulfilled Prime (SFP)
If an item is sold as SFP, the seller is responsible for shipping the item directly to the consumer from their own warehouse or a separate third-party logistics provider. Amazon doesn’t allow just anyone to use this option. Sellers must first be approved, then they must consistently meet Amazon standards in order to maintain this status.
So, SFP is essentially the opposite of FBA. You don’t pay Amazon anything for fulfillment, but shipping and other logistics are all yours to manage. This option is most popular with sellers who have large, heavy products which can become costly to store in an Amazon warehouse. However, you must be a stellar seller to qualify. Amazon will put you through a trial period until you prove that you can consistently fulfill Prime orders.
3. Vendor Central (VC)
VC is when an Amazon seller sells their item directly to Amazon. Amazon re-brands the products as their own, and the seller essentially becomes a wholesale vendor for Amazon.
In order to sell on Vendor Central, Amazon must invite you. Once invited, you must be able to maintain stock. If you can’t, Amazon will start buying from someone else. Vendor Central fulfillment takes much of the logistical and marketing work off your plate (you probably won’t be able to market better than Amazon, so this is a huge benefit), but you won’t be able to control the final selling price on Amazon. You’ll also be selling your product at wholesale price instead of retail.
Get an Amazon Audit
In the end, the best Amazon fulfillment option for your business all depends on your products and your long-term business plan. A complete analysis of the pros and cons of each option will help you make the best decision for your business.
Leverage our resident Amazon expert for a comprehensive analysis of your Amazon fulfillment options/best practice recommendations and start maximizing your Amazon profits today.