Seller Fulfilled Prime (SFP) launched in 2015 allows marketplace sellers to offer Prime two-day shipping without using Fulfillment by Amazon (FBA). Products offered by those sellers have the same Prime icon as seen elsewhere, and receive the same buy-box prioritization as sellers using FBA. It is a way for sellers to reap the benefits of the growing Prime membership, while still controlling their own inventory operations.
In the second half of 2015 more than 500,000 new products received the Prime badge thanks to this program, Amazon said. In 2016 over 6 million products got Prime through SFP in the US, UK, Germany, France, and Japan marketplaces.
Amazon has also said that thousands of sellers joined the program.
But outside of these few context-less numbers there hasn't been much talk about the success of this program. Thus we decided to investigate it and see how many marketplace sellers are using it.
We found that out of the Top 100,000 Amazon.com sellers, just 283 have committed to the program. Meaning for majority of the products they offer Prime shipping, and the shipping is not done by FBA. That's just 0.2 percent.
47 sellers out of Top 10,000, 8 out of Top 1,000, and 2 out of Top 100 are committed to using Seller Fulfilled Prime. The ratio increases the narrower the sellers list is suggesting that bigger sellers do better using SFP. Or are able to grow more thanks to SFP.
But since SFP can be used even for a single product we also checked how many sellers have at least one product enabled. 1,169 out of the Top 100,000 Amazon.com sellers have at least one product with Prime.
The ratio here too increases in the narrower top sellers lists - 222 sellers out of Top 10,000, 33 out of Top 1,000, 4 out of top 100.
Results of this study suggest that the program is not common among sellers. There are strict requirements for being allowed to participate, and few sellers have the infrastructure, and the experience to meet them. Yet even top sellers like Pharmapacks do not offer Prime shipping through Seller Fulfilled Prime, while being one of the most successful sellers handling their own fulfillment.
Many of the top sellers have made a commitment to using Fulfillment by Amazon (FBA) instead.
Among the top Amazon.com third-party sellers the use of FBA is above 50 percent. The only public comment Amazon had about this was when they said that "In the fourth quarter, FBA units represented more than 55% of total third-party units" referring to the fourth quarter of 2016. This reported number has grown from 40 percent in 2014, and from 50 percent in 2015.
We've done deeper analysis on this, and have highlighted the growth of FBA use among top sellers multiple times. The growth of FBA is not surprising given the growth of Prime memberships. These two programs both help each other grow. In the future the pressure on Amazon seller not using FBA will only increase.
Most estimates predict Prime membership number to be at least 65 million. This is one of the key assets of the Amazon business. Both FBA and SFP allow sellers benefitting from this directly.
Like our other research studies the numbers quoted here are rough estimates, not necessarily representative of the true numbers. On the other hand, the estimates make sense to us, and without Amazon likely ever sharing anything themselves, we are confident they are accurate enough to understand the market.