Amazon Fulfilled vs. Seller Fulfilled

Editor’s note: After previously pausing enrollment for the Seller Fulfilled Prime program, Amazon will begin accepting applications on October 1, 2023. New trial criteria and performance requirements will apply and are detailed below.

If you know anything about Amazon, it’s that people love its two-day shipping. Since this is included in the Prime membership, it’s no surprise that there are more than 100 million subscribers. Simply put, Amazon Prime is a big deal.

As a seller, you're probably wondering how to sell stuff on Amazon Prime and take advantage of all this demand. There’s a lot to consider and so much information to wade through. To help demystify your choices, we’ve compared the Seller Fulfilled Prime program (SFP) with the Fulfillment by Amazon (FBA) program.

How to Offer Prime Shipping on Amazon: Seller Fulfilled vs. Amazon Fulfilled

Let's take a look at how to offer Prime shipping on Amazon through two different lenses: the Seller Fulfilled Prime program and the FBA service.

To join the Seller Fulfilled Prime program, you must first complete a trial. If you're accepted, you will need to satisfy specific criteria including:

maintaining a Professional selling plan
offering free shipping
having a cancellation rate of less than 0.5%
delivering Prime products on Saturday, Sunday, or both

Additionally, you will be expected to meet or exceed performance requirements for your valid tracking rate and delivery speeds. Using Buy Shipping Services used to be a mandatory requirement but is now optional. When performance metrics fall below these levels, you will no longer be eligible for Seller Fulfilled Prime.

Editor’s note: Amazon’s Buy with Prime service was introduced in April of 2022 and allows retailers outside of Amazon to also offer Prime shipping.

By contrast, to participate in the FBA program, all you have to do is register. If you have an existing seller account, you can simply add the FBA feature with very little hassle. They make it easy to just get started.

Inventory Storage

If you choose the Seller Fulfilled Prime approach, you will be responsible for storing and keeping track of your inventory. Depending on your needs, this can involve renting or buying warehouse space to make sure you have enough on hand to meet demand. This, of course, can be expensive.

FBA sellers store their inventory at an Amazon fulfillment center and can manage it through a simple online interface. Further, Amazon receives and scans your items, recording the unit dimensions for storage. When a customer places an order for these products, Amazon picks and packs them for delivery.

Purchasing vs. Printing Labels

To fulfill an order containing a Prime item, sellers are required to follow Amazon’s terms and conditions as well as those of the carrier or service chosen for both outbound delivery and any applicable returns shipping.

Through FBA’s shipment creation workflow, merchants have the option to enter information about their order and then print the labels directly from Amazon. There are step-by-step instructions or if a seller doesn’t want to apply the labels to eligible products themselves, they can sign up for the FBA Label Service for an additional fee.

Different Shipping Requirements for Seller Fulfilled Prime vs. FBA

As previously stated, a requirement for joining and remaining in the Seller Fulfilled Prime program is that the account meet certain delivery speeds. These will now be updated quarterly, but as of October 1, for example, you must deliver a minimum of 30% of your standard-size products within one day, and 70% should be delivered within two days.

Customers are also given a guaranteed delivery date. If the order is late, Amazon may provide refunds which could be charged to the seller’s account.

The FBA program allows sellers to create a shipment by providing the ship-from address, entering the quantities of each item, and whether they will arrive individually or packed in a case. Sellers can choose to prep the units themselves or pay Amazon to do it. When the order is ready, it can either be sent by a carrier or dropped off at a shipping center.

Managing Returns

At the end of the day, Amazon wants its customers to be happy. As such, all Prime items are given automatic authorization of returns initiated within the window. Anything beyond this time frame is evaluated by Amazon Customer Service on a case-by-case basis. In most scenarios, a full refund is granted and processed within two business days of the item arriving at the seller’s warehouse. Generally, sellers are responsible for the cost of return shipping.

When an FBA order is returned, Amazon handles everything. They give the customer an immediate refund and send them a shipping label, enabling them to send the item back to the warehouse. Since this is basically done on the honor system, sellers will need to make sure that the item is, indeed, returned to Amazon within the 45-day grace period. If it hasn’t been received, sellers have the option to open a case to have Amazon investigate.

Making a Decision

Choosing between Seller Fulfilled Prime and FBA can be difficult. Ultimately, you have to make the decision that works best for you, your business, and your customers. You may even decide to take a hybrid approach or fulfill items through the Merchant Fulfillment Network (MFN).