![Amazon Prime for Amazon Sellers [Guide]](/img/content/amazon.jpg)
Amazon Prime for Amazon Sellers [Guide]
The top reason people shop on Amazon is for fast and free delivery ( 79.8%).
The third top is that they’re an Amazon Prime member (65.7%).
You might be wondering about competitive prices? That comes in fourth, at just 49.2%.
So you could be missing out on over half of Amazon’s customers by not taking advantage of its Prime program. The member base of which, by the way, sits at a cool 200 million people worldwide.
There are two ways into Prime for Amazon sellers:
- Seller Fulfilled Prime, and,
- Fulfilment by Amazon
In this guide to how to be an Amazon Prime seller, we’ll take a look at the benefits of using these programs and how to get set up. You’ll find:
Table of Contents
The best advice and insights for selling on Amazon this year
There’s a lot to know when it comes to selling on Amazon. In this guide, you’ll find expert tips and advice to make sure you start strong and stand out from the crowd.
Download our free guide
Ready to dive into the Amazon Prime jungle?
Amazon Prime Membership
“Amazon is worth more than $900 billion, compared to just $33 billion for its old foe eBay, which spun off its (more valuable) payment division, PayPal. And the Amazon Prime membership program is perhaps the biggest reason why.”
- Vox.
Before the days of Amazon Prime, Amazon was largely overshadowed by rivals like eBay.
The Prime service, launched in February 2005, was the first of its kind, and presented a whole new layer of accessibility to online shopping.
The knock-on effect of this changed what people bought online forever, able to match the same last-minute convenience as brick-and-mortar stores - without leaving home.
Prime caused tension within the company itself, as huge operational changes were needed to supply the demand of two-day shipping options. But it paid off.
“Prime members spend more and buy more frequently than non-Prime members do.”
- Vox.
Amazon Prime membership is currently available in 22 countries worldwide.
In the US, becoming a Prime member costs $12.99/month, or $199/year plus taxes.
For that fee, Prime member benefits include:
- Free one-day, two-day, same-day and other shipping options on eligible orders.
- Amazon Photos online storage and Amazon Drive access.
- Amazon Music streaming.
- Prime Gaming and in-game content.
- Prime Reading for books, magazines, Audible audiobooks, and more.
- Prime Video streaming.
- Prime Try Before You Buy service, which lets you try items at home for seven days before you’re charged for the ones you want to keep.
- The ability to share these benefits within your household.
It’s easy to see the value Prime membership offers customers that use all those benefits.
Here are some pretty eye-watering statistics about Amazon Prime today:
- Amazon collects about $25.2 billion in retail subscription fees from its 200 million members worldwide.
- Prime membership has more than doubled in the last three years, with 148.6 million members in the US alone. This number is expected to reach 176 million by 2025.
- Amazon Prime Day sales reached $11.9 billion in 2021, a number almost five times higher than the same event in 2017. 62% of that revenue came from the US.
Of course, a Prime member may buy from you even if you don’t offer the perks their membership gets them.
But acquiring new and repeat customers is tough, so on a platform that attracts people wanting quick shipping most of all, you could be missing out big time.
As an Amazon seller, don’t you want access to the platform’s crown jewel?
Let’s see how else Prime might benefit Amazon sellers.
The Benefits of Amazon Prime for Sellers
To be a successful Amazon seller, and make a mark on a platform with about ten million others just like you (plus its own branded products), you need to understand your audience.
You need to know why people come to Amazon, who they are, and what they’re looking for.
Well, we know from the above that many of them are Prime members. And they’re Prime members that want fast shipping, who will spend more to get it.
But what else do we know that could benefit sellers that earn the Prime badge?
The benefits of Amazon Prime for Amazon sellers:
- Prime members are loyal. In fact, 65% of those in one particular survey called themselves “brand loyal”, compared to only 44% of non-Prime members. 75% said that if they could only shop in one place online, it would be Amazon, compared to 38% of non-members.
- Prime members buy regularly, not just seasonally. 95% of members report buying on Amazon at least once a month, and 64% said once a week.
- Amazon markets your products for you. It’s difficult to acquire new customers, and turn them into repeat buyers - but you need this to succeed on the platform. Having the Prime badge and associated perks adds to your credibility as a seller.
- You have a better chance of winning the Buy Box. That valuable real estate on the right-hand side of a buyer’s screen, the Buy Box generates about 83% of Amazon sales. With the Prime badge, your chances of winning this coveted spot are increased.
- Prime members are willing to spend more. Even though their membership gets them expedited shipping, 61% of Prime members are still willing to pay more for quicker shipping, compared to 41% of non-members.
Now that we’ve covered why you might want to jump on the Prime bandwagon, we’ll explore the two ways sellers can do this.
How To Sell With Amazon Prime
Ok, enough with the numbers.
Amazon Prime is huge - you get it. What you really want to know is, how do you get in on the action?
To become a Prime seller on Amazon, you have two options: FBA and SFP.
Let’s check them out.
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Fulfilment by Amazon (FBA)
The simplest way to make your products available to Prime members is to use Fulfilment by Amazon.
Sending your products off to be handled by Amazon’s expert FBA network comes with a heap of benefits, but just as many fees to go with them!
What you’re responsible for:
- Getting the products to Amazon’s warehouses.
- Packaging the products according to Amazon’s criteria.
- Paying for storage and program fees, as well as others that may apply.
- Staying on top of your sales tax obligations, which may expand if your products are stored in different US states. In some states, Amazon will handle the taxes for you. Everything you need to know can be found in our dedicated guide.
What Amazon does for you:
- Picks, packs, and ships your orders as they come in.
- Makes eligible products available to Prime members for fast delivery.
- Stores your products indefinitely (though you may be charged long-term storage fees, plus others if your products take up more space than you are allocated).
- Handles customer service enquiries and returns.
FBA is arguably the easiest option, but you may want more control over your packaging, fulfilment, and customer service.
For particularly successful, highly-rated sellers, Seller Fulfilled Prime may be an option.
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Seller Fulfilled Prime (SFP)
Seller Fulfilled Prime allows third-party sellers to fulfill their own orders under the Prime badge.
It’s a segway between FBA and FBM (Fulfilment by Merchant), but since Amazon’s Prime brand reputation is on the line, the requirements of sellers opting for SFP are tight. You need to earn it, and maintain top standards.
“Seller Fulfilled Prime is the Prime program that allows you to deliver directly to domestic Prime customers from your own warehouse. By displaying the Prime badge, you are committing to fulfill orders with Two-Day Delivery at no additional charge for Prime customers. Amazon gives you access to the right transportation solutions to help you meet the high bar for the Prime customer experience.”
Before earning the coveted Prime badge, you will need to complete a trial period. You won’t have the badge during this time period, and you’ll need to successfully:
- Ship 50 eligible Prime trial orders, 100% on time, or,
- Ship 100 eligible orders with 99% on time delivery.
You have between five and 90 days to complete the trial period.
The criteria to apply for Seller Fulfilled Prime:
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Offer your customers premium shipping options.
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Achieve a 99% success rate for fulfilling orders on time.
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Maintain an order cancellation rate of under 0.5%.
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Fulfill 99% of your orders with Amazon’s Buy Shipping service.
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Use Amazon’s Seller Fulfilled Prime carriers, which include:
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Ensure nationwide delivery for standard-sized orders.
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Offer shipping methods that allow weekend delivery and pick-up options.
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Meet quota for one and two-day delivery guarantees.
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Agree to Amazon’s return policy.
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Allow Amazon to deal with customer enquiries.
Products most suited to Seller Fulfilled Prime ( according to Amazon):
- High-value items.
- Products with seasonal or unpredictable demand.
- Items with variations.
- Slow-moving products.
- Inventory requiring special handling or preparation.
Some items may be better suited to SFP than FBA because you have greater control and visibility over your fulfilment.
The costs of Seller Fulfilled Prime
Amazon Seller Fulfilled Prime fees consist of:
- The transportation fee of your chosen approved carrier/s.
- Your Amazon marketplace subscription fee.
Of course you’ll encounter more costs than these in fulfilling your own orders. But they shouldn’t come from the platform itself.
To sum up, here’s a handy visual from Amazon to show how SFP works:
Source: Amazon.
What Sellers Need to Know About Amazon Prime Day
Prime Day is an annual event exclusive to Prime members that usually spans two days, around July time, and involves deals and discounts across Amazon shopping categories.
It’s an optional event for Prime sellers to participate in - you might see a bump in sales without deals due to increased traffic. But to really make the most of the bargain hunter influx, consider offering discounts yourself.
Your conversion rate relates to how many browsers you turn into buyers. A “good” conversion rate depends on numerous factors - category and product type being just one - but some sources quote between 1 and 5% as being “good”.
Prime Day sees conversion rates of 13% and upwards, with Prime Day sales in 2021 surpassing $11 billion.
There are fees involved. You will need to pay Amazon to run your deals, which are featured on its Deals pages during the event - regardless of whether you sell anything or not.
As a Prime seller, there are a few things you can do to make sure you get the most of every Prime Day event.
Tips for Amazon sellers to prepare for and maximize Prime Day:
- Get your FBA or SFP inventory ready ahead of time. If you’re an FBA seller, Amazon will have Prime Day inventory cut-off dates so make sure you know the relevant one for your region.
- Use coupons to achieve maximum visibility on your listings. Coupon tags are bright orange and hard to miss on listings, so using these to show off discounts is a great way to catch your browsers’ attention. There is often a cut-off date for submitting Prime Coupons so make sure to check ahead of the next event.
- Run Lightning Deals. Lightning Deals are effectively flash sales, where discount prices are available within a set timeframe. Lightning Deals are listed on Amazon’s dedicated Prime Deals page, so you’ll get some boosted visibility for participating products. These can be run at any time, and are a little more expensive during Prime Day. You’ll also need to apply for this ahead of the event itself.
- Manually lower listing prices. Whilst this won’t boost visibility necessarily, or earn you any marketing from Amazon, it could help shift more products during higher traffic periods. It’s also a good way to organically improve your Best Sellers Ranking (BSR).
- Audit and optimize your listings. Can you make your listings more comprehensive, clearer, more organized, and perhaps better optimized for the Amazon search engine? Our guide to Amazon SEO can help with this.
- Test your A+ content with Amazon’s Manage Your Experiments (MYE) feature. This process can help you analyze, adjust, and optimize your top listings for the best return.
- Advertise, like, everywhere! If you’re going to put some money into Prime Day, make sure you shout about it across all your channels. Pay per click (PPC) campaigns, off-Amazon ads, and social media can all be employed to get the word out. And remember to track these with Amazon Attribution to see what’s getting traction and learn as you go.
By putting some or all of these things in place, you’re sure to attract customers on Prime Day and use it to collect data and learn how to improve your approach year on year.
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Also on the Blog
The best advice and insights for selling on Amazon this year
There’s a lot to know when it comes to selling on Amazon. In this guide, you’ll find expert tips and advice to make sure you start strong and stand out from the crowd.
Download our free guide
