How To Become A Prime Seller On Amazon

How To Sell on Amazon Prime: 3 Ways to Get the Prime Badge

How To Become A Prime Seller On Amazon

Amazon is undoubtedly one of the biggest e-Commerce platforms anyone would wish to invest in. With its top competitors such as eBay trying to improve their shopping, paying, and product listing techniques, they are yet to reach where Amazon has placed its foot.

For instance, Amazon is said to be worth more than $900 billion based on its 2023 market capitalization. That is higher than eBay which stands at about $46 billion. What does this say about customers looking for the fastest and safest way to shop?

Of course, the top reasons why most people choose Amazon is fast, safe, and free delivery, which represents almost 79% of shoppers. Others include competitive prices (49%) and the introduction of Amazon Prime membership (67%).

That means any seller looking to maximize their online sales should prioritize Amazon before tapping into other options.

Though the question is, do all Amazon sellers enjoy the same benefits of a huge customer base and standard pricing?

The simplest answer is No. And to understand how different selling techniques work on Amazon, you can start by learning more about Amazon Prime membership.

Let’s look specifically at the question … How To Become A Prime Seller On Amazon?

What Is Amazon Prime?

You have probably seen many product listings with the Amazon Prime badge when browsing on Amazon.

The badge might be familiar to those who have already subscribed to it. But to new sellers and customers, there seems to be confusion on what it is and how it impacts the overall shopping experience.

The Amazon Prime feature was launched in February 2005 as a unique way of product accessibility and online buying.

As of today, the service is available in 22 countries globally with over 200 million members. Also, according to statistics, the US alone has about 148.6 million Prime members, representing almost 74% of worldwide Prime subscribers. Amazon Prime membership, which is often praised as a customer-centric business model, costs $12.99 per month or $199 per, taxes included.

The service allows both sellers and buyers to access streaming content, product promos, and free 1-day or 2-day deliveries.

It also allows its member customers to try items at their homes for seven days before buying (Prime Try Before You Buy).

Another beautiful thing about Amazon Prime is Prime Day. This is Amazon’s biggest day when customers can enjoy the best market deals.

It is also the date when Prime sellers record higher sales than other days. For instance, Amazon recorded about $11.79 billion in revenue in 2021, almost five times higher than what was collected in 2017.

With all these perks, the next possible question in mind is, how does the feature benefit sellers?

Why Sell on Amazon Prime?

To be a successful Amazon seller and stand out from your 10 million competitors, the first task is to understand your customer base. Know why buyers visit Amazon, what they expect, and what keeps them coming back. Since most buyers expect to receive their orders on the same day, it means they will probably look for sellers that can accomplish that. And this is highly possible with Prime sellers. Therefore, despite all the other benefits that Amazon offers to its general audience, here are some reasons why you should consider selling on Amazon Prime:

Higher Chances Of Winning The Buy Box

Amazon Prime sellers can enjoy a competitive edge over their competitors. This allows them to record more than one sale easily and win a Buy Box. Ideally, most customers do not like wasting time comparing different sellers and their prices. Instead, they prefer picking one they think offers the best service after placing their products in the cart. It is at this point that the Buy Box will work for you if you have one. If you have a Buy Box, Amazon will pair you with the purchases once the customer places the item in the cart. That means the chances of receiving the sales are higher than those without the Buy Box. Therefore, although not the only primary factor, having a Prime badge is one of the significant ways of winning a Buy Box.

It Boosts Your Search Engines Ranking

With a Prime badge, you stand a higher chance of appearing on top of search engine result pages (SERP) when customers search for products. Your boosted ranking places you at an advantage over your competitors and makes your brand easily visible. Also, Prime sellers record more sales, considering that Prime buyers who shop frequently will always consider sellers with higher rankings. Prime sellers also have an advantage over private label sellers who frequently compete against a few products with the Prime badge. That is because buyers would consider them first due to other advantages that come with Prime shopping such as free and fast delivery.

Improved Customer Trust and Satisfaction

One of Amazon’s success stories is based on a convenient, safe, and fast shopping experience. With all sellers striving to achieve that, those with Amazon Prime badges are ahead since the service covers almost all positive shopping factors. Of course, offering 1-day and 2-day delivery options will put your brand ahead of competitors. That is because most people today want instant deliveries. This alone is enough to build customer trust and satisfaction, resulting in repeat purchases.

What Are The 3 Different Ways to Sell on Amazon Prime?

The above three benefits indicate that Amazon Prime is a juicy part that most sellers would never wish to miss. The feature has allowed its members to access numerous perks, including a wide market with buyers ready to spend more. However, as a new seller, the struggle comes in when trying to find a suitable way to join the bandwagon. That said, here are three primary ways you can sell on Amazon Prime:

1. Fulfillment by Amazon (FBA)

Fulfillment by Amazon (FBA) is considered by most sellers to be best selling method. With this method, sellers only need to source the inventory and send it to Amazon warehouses. The model was developed in 2005 as Amazon’s way of sharing logistics with its sellers. In short, Amazon handles all the pre-sale costs, including storage, shipping, delivery, and customer services. Although it comes at a fee, sellers do not need to worry about how their products reach the customers. Their task is to keep a healthy inventory and make online sales. Using the FBA method to sell your products can earn you the right to own and showcase the Prime badge. The program is accessible to all businesses, including sole traders and multinational companies. However, you remain responsible for the product listing optimization. Also, in some states, FBA sellers remain on top of their sales tax obligations, which may expand if their products are stored in different states.

Pros:

  • The method is a good outsourcing technique that allows you to worry less about your order fulfillment.
  • It is automated and integrated with Amazon and you can earn the Prime badge immediately after you join.
  • It saves you the costs of packing and shipping orders since you transfer all the technical logistics to Amazon.
  • Amazon can also clear negative customer feedback from your account.
  • Your products will have a “Fulfilled by Amazon” badge, which enhances customer confidence.

Cons:

  • The method can have complex long-term storage fees, which can be higher than when you store and ship directly to your buyers.
  • Amazon may require you to ship small quantities to multiple locations. If not, you will have to pay extra for Inventory Placement Service.
  • You still need to track your inventory and replenish it regularly based on how long the shipment takes to be processed.
  • You risk your inventory being mixed with other sellers’ products, which can lead to a bad reputation.

Who Is FBA Right For?

The Fulfillment by Amazon is suitable for sellers whose highest sales come from Amazon. Since Amazon handles all the order fulfillment operations, it allows sellers to focus on other activities. Such sellers can easily get the Prime badge since they can conveniently manage customer satisfaction by sourcing high-quality products and marketing them. FBA is also suitable for sellers that handle their shipping operations but still want to lower shipping times to many locations. It is also recommended for sellers who cannot meet standard requirements for other selling methods.

2. Seller Fulfilled Prime (SFP)

Seller Fulfilled Prime (SFP) is for sellers who would prefer control over their order fulfillment operations but can still enjoy Prime benefits. With SFP, sellers manage everything internally instead of transferring all the responsibilities to Amazon. These include shipping orders directly from their warehouses via Amazon-approved carriers or third-party logistics service providers (3PL). Currently, the SFP program has a waiting list that interested sellers must fulfill certain requirements before joining. These requirements include but are not limited to:

  • Showing a 2-day delivery commitment.
  • Having national delivery coverage.
  • Having a 99% on-time delivery record.
  • Complying with Amazon Returns Policy.
  • Maintaining a cancellation rate of below 0.5%.
  • Having a 94% valid tracking ID.

During the trial or waiting period, an SFP merchant needs to fulfill 200 Prime orders, after which they can earn Amazon Prime benefits.

Pros:

  • The Seller Fulfilled Prime allows sellers to control their inventory and order fulfillment operations. That means they do not incur shipping and handling fees like in FBA.
  • Sellers enjoy higher profits on bulky and heavy orders since such orders do not need to be shipped twice before reaching customers.
  • Sellers can sell items not eligible for FBA or need special storage services such as temperature controls or those with short expiration dates.
  • SFP sellers can use multiple fulfillment options for varied inventory. For example, they can ship bulky products using SFP and small items via FBA.

Cons:

  • SFP sellers need high-quality shipping operations to fulfill orders quickly and pay for all costs.
  • It is expensive to set up and maintain warehouses, staff, and inventory-sourcing systems.
  • The method has stringent qualifying requirements and a trial period of between 5 and 0 days can be long for some applicants.
  • Those who fail to maintain the SFP standards even after qualifying will need to go through the harsh requirement of switching to another method to maintain their Prime badge.

Who Is SFP Right For?

The Seller Fulfilled Prime is ideal for sellers who have established warehouses and staff and can handle order fulfillment operations without going against Amazon policies. Since such sellers can easily control order fulfillment from their websites, online marketplaces, and in-store sales, SFP allows them to keep their existing inventory systems and leverage investment costs without going through complex inventory management costs in different locations.

3. Amazon Vendor Central

The third way you can sell on Amazon Prime is by becoming an Amazon vendor. In this method, you sell directly to Amazon as a first-party seller then Amazon takes over all the order fulfillment operations. The method is an invites-only initiative where Amazon invites established manufacturers or brands. It is also different from Seller Central since Amazon buys directly from brands rather than brands selling directly to customers as in Seller Central. A significant advantage of selling through Vendor Central is that manufacturers or brands can enjoy vast Amazon benefits, especially after transferring ownership to Amazon. Vendors also earn Amazon Prime and “Ships from and sold by Amazon” badges. Brands can join Vendor Central in the following ways:

  • 1. Requesting an invite from Amazon.
  • 2. Moving their status up into the ‘top’ brands on Amazon.
  • 3. Recording high sales on FBA and SFP products.

Pros:

  • It is easier to join Amazon Vendor Central. Sellers only need to process Amazon’s purchase orders and bill them.
  • Sellers do not need to worry about business-to-consumer (B2C) sales.
  • The tag “Ships from and sold by Amazon.com” can build customer confidence in brands.
  • Vendors also access various Amazon services such as A+ Content, Subscribe and Save, and Amazon Vine reviews.

Cons:

  • The program is invite-only and involves well-established brands.
  • Amazon is the only price-determinant and can lower prices below the brand’s Minimum Advertised Price (MAP).
  • Manufacturers may need to sell products that Amazon does not want to stock directly to customers.
  • Vendors may have limited room to negotiate Amazon’s terms, including pricing.

Who Is Vendor Central Right For?

Vendor Central is ideal for brands or manufacturers who prefer bulk selling or those who don’t understand how business-to-customer (B2C) works. It is also suitable for brands compelled to sell directly to Amazon through the Product Availability Policy.

Do You Need to Sell on Amazon Prime?

Selling on Amazon Prime seems like an enticing trick that almost every seller is thinking about. Considering the services relieve sellers of most of their legwork while maximizing their profitability, you may also wish to join. However, the question is, is Amazon Prime worth it? Remember, some Prime products still record low sales on Amazon while others that do not have Prime badges do well. That means, although acquiring the Amazon Prime tag is somehow essential in some scenarios, it is not the only way to success. Therefore, to understand if you need to join the Amazon Prime crew, you need to weigh two sides.

You need prime if:

  • There are various similar products with the Prime badge competing with your products or brand.
  • You are selling third-party products that other Prime sellers are selling. This is common when competing for the Buy Box on the same product.

You might not need prime if:

  • You already have an established customer base with buyers who buy from your brand alone. However, ensure they have not ticked the box to show they buy from Prime sellers only.
  • Your products are more affordable than Prime sellers’. That means you stand a higher chance of winning the Buy Box than Prime sellers with higher prices.
  • You sell products with less competition such as media items like rare books, textbooks, and refurbished items.
  • You sell hard-to-ship or hard-to-find products such as machinery, specialized items, or products with low sales volume.

Final Notes on How To Become A Prime Seller On Amazon

The Bottom Line: Business Type, Competition, And Demand

Selling on Amazon Prime is probably among the ways to kickstart your selling success and reach more willing buyers.

Although you have a few ways like using FBA, SFP, or Vendor Central to join the crew, you are sure to create a loyal customer base quickly and enjoy the vast benefits that Amazon has to offer.

However, before reaching this point, and if you want to properly understand how to become a prime seller On Amazon, you need to ask yourself three vital questions:

What is your ideal business method? Is your brand fit for FBA, SFP, or Vendor Central? Do you want to use B2B, B2C, or both approaches?

Understanding your best business type and your consumers is crucial at this point.

Who are your competitors? Are the majority of your competitors Prime sellers? If your rivals are selling products with a Prime badge, you should also get one.

Lastly, what is the demand for your products? If your products have a higher demand, then you can consider getting a Prime badge to win more customers.