Fulfillment by Amazon (FBA)—It’s good for starting out. Amazon takes care of packing, shipping, customer service, and returns, leaving you to work on growing your business. In recent years, FBA fees have been on the up and up, and for some sellers, FBA may no longer be the best financial option.

In the past, we at AO2 have written about alternatives to FBA, including Amazon Warehousing and Distribution (AWD). As of August 2024, FBA’s major fees are the following:

• Storage fees: base cost of $0.78/cu ft/month for standard-size items, with surcharges depending on period of storage
• Fulfillment fees: generally between $3.06 and $6.92 per unit for standard-size items, depending on the size and weight
• Referral fees: around 15% unit price per item

But there’s also fuel inflation fees, low inventory fees, inbound placement, etc. that make FBA more expensive than it appears at first glance, just from these numbers. For some, the fees are worth it for Amazon’s help, but for others, their business is at such a scale that Seller Fulfilled Prime (SFP) becomes more appealing. As of August 2024, SFP applications have opened after a four-year-long hiatus, and now could be the perfect time for FBA sellers to make the switch.

What is SFP?

SFP enables sellers to deliver orders directly from their own warehouses while still offering the Amazon Prime badge. This means that your products will be eligible for the same fast, free shipping that Amazon Prime customers have come to expect. However, unlike FBA, you are responsible for all aspects of order fulfillment, from inventory storage to packaging and shipping.

Is SFP Prime Right for Your Business?

Final Thoughts

SFP offers a compelling alternative to FBA, particularly in light of the rising fees associated with FBA. However, it also comes with strict requirements and potential challenges. By carefully weighing the pros and cons, you can determine if SFP is the right fulfillment option for your business.

Still don’t know what the right choice is for your business? Contact our team of Amazon experts to learn more!