August 27, 2020
Amazon’s new shipping requirements for Seller Fulfilled Prime, the program that allows merchants to ship products to Prime sellers through their own fulfillment network, has announced stricter delivery requirements. Merchants are now required to meet one and two-day delivery targets and make Saturday deliveries, to ensure “Seller Fulfilled Prime meets customer expectations of Prime.” If they fail to meet these targets, they will lose their Prime badges, which strongly influence customers to buy their products.
These new rules will force SFP merchants to either ship with Fulfilled by Amazon or shop around for new logistics providers who can guarantee speedy fulfillment and delivery. If they opt for FBA, they’ll lose control over the fulfillment process and any opportunity to offer customizations, and be faced with FBA’s hefty storage fees and equally stringent shipping and stocking requirements. Many sellers who chose to fulfill through the SFP program did so because they wanted to keep the relationships they had with their existing logistics providers, but may now need to shop around for new partners anyway to remain an SFP merchant.
Amazon says that fewer than 16% of orders shipped through the FSA program met a two-day delivery window, and a major contributing factor to those longer ship times was the consistent lack of Saturday deliveries. The new requirements are aimed at raising delivery standards, at a time when supply chains are already struggling to cope with an influx of additional volume caused by an increase in online ordering during COVID-19. Merchants who are hoping to remain out of FBA are faced with low on-time delivery performances and rising surcharges of major parcel carriers like UPS, FedEx and USPS; some of these charges are designed to hit primarily large shippers during peak season.
Merchants who want to keep their SFP badge and avoid joining Amazon’s FBA program will need to prioritize keeping enough product in stock that can move out of fulfillment centers quickly. They will also need to have enough forward stocking inventory in multiple facilities across the U.S. to be only one or two days away from their customer by truck in order to avoid having to ship to customers via air. Fast quoting and booking of truckloads will also be key to moving out shipments on time.
If you need to expand your fulfillment network to meet these requirements, Stord can help. We have 43 million square feet of warehousing across the U.S., so we can find you the space you need to ensure you’re close to your customers. No idea where to start? Our data science team can perform a network study using your shipment and inventory data and tell you where to place inventory to get it closer to your customers. Contact us to get started.