A question we’re often asked by prospective clients is “do we really need to do FBA”? We know our answer (it’s yes, for the avoidance of doubt) but we thought we’d let a little snippet of data speak for itself…
The thing is, it’s hard to overemphasise how important Prime delivery is to the average Amazon customer.
This chart shows daily sales of a live product line over a 28-day period, with figures dropping steeply towards the end.
What caused sales to slow so quickly?
It happened when the product went out of stock on FBA and dropped onto an FBM offer with a 48-hour turnaround – still very fast relative to many other e-commerce delivery options, but not Prime fast.
A Rule of Thumb: Amazon Prime Matters
Prime delivery is fundamental to many Amazon shoppers for a whole range of reasons:
- Speed, convenience & Enhanced Customer Experience – shoppers are drawn to the fast, seamless and often same-day or next-day delivery options that come with Prime-eligible products.
- Trust and Reliability – Products fulfilled by Amazon are automatically associated with Amazon’s reputation for reliable service, with customers trusting that their orders will be processed quickly, packaged securely and delivered on time.
- Increased Visibility and Sales – Prime-eligible products are often favoured in Amazon’s search results and are more likely to be featured in promotions – an increased visibility that can lead to higher conversion rates and sales.
FBA vs SFP
And, although you can obviously also access Prime using Seller Fulfilled Prime, for many Sellers FBA is just the simplest way to deal with your Amazon logistics – even taking into account the fees and charges involved.
Why do we say that? Let’s compare the two:
Logistics and Operations Management:
With FBA, Amazon takes full responsibility for storage, packaging, shipping and handling returns, with Sellers simply sending their inventory to Amazon’s fulfilment centres – significantly reducing the operational burden on the Seller.
Sellers using SFP must manage their own storage, packaging and shipping, ensuring they meet Amazon’s stringent Prime delivery standards – a requirement that calls for robust logistics infrastructure and capabilities which can be complex and resource-intensive for Sellers to maintain.
Prime Eligibility and Performance Standards:
Products fulfilled through FBA are automatically eligible for Amazon Prime, meaning Sellers don’t have to worry about maintaining the high-performance metrics required to offer Prime shipping.
Sellers using SFP must meet Amazon’s rigorous performance standards, including fast and reliable shipping, to retain their Prime eligibility. Managing these standards requires constant monitoring and can be challenging, especially during peak periods or if there are disruptions in the Seller’s own supply chain.
Customer Service and Returns Handling:
Amazon handles all customer service inquiries and returns for FBA products. This includes dealing with customer complaints, processing returns and issuing refunds – a streamlined process that saves Sellers time and resources.
Sellers using SFP are responsible for managing their own customer service and returns, adding another layer of complexity, as Sellers must ensure they provide a level of service that meets Amazon’s demanding standards.
In summary, FBA simplifies the selling process by offloading logistics, ensuring seamless Prime eligibility, and managing customer service, making it an easier and more efficient option for sellers compared to Seller Fulfilled Prime.
Still pondering your options? Or have you got some burning questions you’d like to put to our logistics specialists? To see if FBA is right for your brand – and make the switch seamless if it is – speak to the team today.