Founder update: Small and Light and SFP
SFP, is that you?
Amazon is going to be reopening its Seller-Fulfilled Prime (SFP) enrollment later this year, which will allow for sellers to handle the fulfillment of their inventory to the customers on their own (and, importantly, maintaining the Prime badge for fast and free delivery).
SFP was first launched in 2015, but since has been deemed by many experts to be an Amazon “swing and a miss” for lacking in customer experience and seller compliance on shipping metrics.
For example, the program mandates that sellers much ship over 99% of orders on time, have nationwide delivery coverage, and have weekend pickups and delivery.
All that made SFP popular for a niche group of sellers who found it cheaper to use their own or third-party fulfillment centers.
As of late, the SFP program has been closed to new applicants to “address issues with customer expectations and provide better support for sellers.”
Some are saying that this step by Amazon is seen as a way to expand its Prime service while freeing up FC warehouse space post-Covid.
Small and Light is Dead
Last week on June 29th, Amazon announced that they are ending the Small and Light program.
Small and Light was an Amazon FBA program designed to cut fulfillment costs for products that were…you guessed it, Small and Light.
More specifically, products had to check these three boxes:
- Weighing 3 pounds or less
- Measuring 18 x 14 x 8 in dimensional inches (or less)
- And be priced at $12 or under
Amazon is replacing S&L with new “Low-Price FBA rates” which will still save sellers money compared to larger size, weight, and priced items…but not to the same extent.
What sellers loved about S&L is that offered a reduced fulfillment fee, thus incentivizing wholesale sellers to carry such inventory and Private Label sellers to consider manufacturing it.
Many sellers felt that without S&L incentives, the same products would be rendered unprofitable under standard fulfillment costs.
No one is celebrating the new FBA rates for low-price products which average $0.77 lower per item than current FBA fulfillment rates. That’s because that rate is $0.30 more than under the previous Small and Light program.
Zooming out, this change feels all-too-reminiscent to many sellers of the theme: Amazon will always deliver the lowest price to its customers, but often times at the expense of the sellers…too bad that a company with $513.983 billion in revenue can’t seem to find room to help its third party sellers out!