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4 Updates to Amazon Seller-Fulfilled Prime

In case you missed it, Amazon has recently reopened its Seller-Fulfilled Prime (SFP) program with “new standards in place” which the retail giant stated have been designed to provide sellers with an even better experience and enhanced opportunities, though some sellers do not agree.

What’s New?

1. SFP fee has been removed

As of October 1, the 2% fee for every item sold has been removed from the SFP program after receiving flak from sellers. Per Amazon, the fee was initially intended to cover program development and operational costs, but after consideration, the company has chosen not to implement it to maintain positive sentiment and encourage enrollment.

2. Enrollment is subject to certain requirements

To join the program, you need to pre-qualify for the SFP trial and successfully complete the 30-day trial period, meeting all requirements.

Pre-qualification criteria include:

Criteria to pass the SFP trial and become an enrolled seller:

3. Default SFP order handling time will be reduced to one day

Starting on October 31, 2023, Amazon updated the default handling time for SFP orders. This change will impact how quickly SFP participates are expected to handle and ship orders. Here are the primary details of this update:

  • Default Handling Time Change: The default handling time for SKUs that are typically handled in one day or less will be updated from two days to one day.
  • Improved Accuracy: This update is intended to align handling times more accurately with how quickly sellers usually ship orders. According to Amazon, more than 85% of SFP orders are currently shipped within one day.
  • Account Health Consideration: The new handling time will be based on your handling time history over the past three months “to protect your account health.” SKU-specific settings will also impact the handling time. As you may already know, handling time on Amazon impacts your account health by influencing key performance metrics, including the Late Shipment Rate and Valid Tracking Rate. Inaccurate handling times can also lead to negative customer feedback and reduced Buy Box eligibility. To maintain a healthy seller account, it’s crucial to align your handling time with your actual shipping capabilities and meet customer expectations for timely deliveries.
  • Action Required: If you have products that take longer than one day to handle, you should set a longer SKU-specific handling time in the Manage Inventory section to override the default one-day handling time.
  • Order Handling Capacity: To protect your business from sudden sales spikes, Amazon recommends setting an order handling capacity.

These changes aim to enhance the accuracy of handling times and provide shoppers with more attractive delivery promises while ensuring you can effectively manage your order processing. 

Click here to update your SFP handling time settings.

4. Amazon B2B: Business Hour Delivery Rate for SFP Orders

Amazon has introduced the “business hour delivery rate” metric for SFP orders sent to Amazon Business and Business Prime customers with commercial addresses. This metric calculates the percentage of Amazon Business shipments delivered on the first attempt during business hours within a 30-day period.

You can access this data on the Fulfillment Insights Dashboard, helping you optimize your delivery methods and improve customer satisfaction (e.g., minimize delivery attempts and package theft), though it doesn’t affect program eligibility.

What Sellers Are Saying

While some sellers welcome the newly reopened program and SFP fee removal, others aren’t particularly happy about the tedious program requirements and changes to the default SFP order handling time.

From what we were able to glean from the comments section of the SFP reopening announcement post, various sellers are:

  • Are having trouble enrolling in the SFP trial even though they meet the prequalification criteria.
  • Expressing concerns about the delivery speed requirements, specifically the need for same-day and next-day delivery.
  • Having issues with the program’s metrics not being calculated correctly on the dashboard.
  • Desiring more flexibility in terms of shipping times and cutoff times.
  • Raising questions about the fairness of the new rules and their impact on sellers.
  • Worried about handing their customer service and return processes over to Customer Service by Amazon, which means “Amazon has sole discretion over whether to charge the costs of any returns, refunds, or other adjustments and concessions related to Prime items to the seller’s account.” For instance, Amazon can decide to issue refunds to customers on your behalf, which can impact your profitability, especially if you believe a refund is unjustified.
  • Some sellers are frustrated with the changes and complexities of the SFP program, suggesting a simpler approach to displaying the Prime badge.

Additionally, the changes to the default handling time for SFP orders, reducing it from two days to one day, have also sparked disappointment and apprehension among sellers. They are worried about losing their control over shipping settings (unless they have a lot of time to manually override the default option for each SKU by going to Manage Inventory). They also risk incurring potential penalties for late shipments, especially in cases where unforeseen circumstances like weather delays or labor strikes may affect shipping times.

Some sellers are also concerned about the impact of the update on their ability to offer USPS Ground Advantage shipping, as the new one-day handling time may not align with USPS transit times. Overall, many sellers feel that Amazon’s decision is unnecessary and may lead to more challenges in managing their businesses effectively.

In summary, some sellers appreciate the SFP program’s return, but many others are dealing with uncertainties and complexities surrounding these changes, hoping for more straightforward solutions. For these changes to be announced during the busy Q4 shipping rush makes it all the more daunting for sellers who already face increased challenges during the holidays.

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