Merchants have the choice of two shipping and storage models on Amazon. Fulfillment by Merchant (FBM) and Fulfillment by Amazon(FBA). With Fulfillment by Merchant, merchants take over the shipping, storage and customer service of their own goods. Depending on the product category, both options have advantages and disadvantages. FBA is more suitable for products with high sales volumes. Retailers use the Europe-wide infrastructure of warehouses, logistics and shipping. FBM is suitable for sellers of custom-made products, unique items and niche products.
Amazon has strict requirements for merchants who do not participate in the FBA program to ensure a consistent selling experience for buyers. Failure to meet these requirements can result in account suspension. Amazon usually grants sellers a grace period to improve performance.
The following performance targets apply to sales staff:
- Rate of order defects: less than 1%
- Cancellation rate before fulfillment: less than 2.5
- Rate of late deliveries: less than 4%
The requirements for premium shipping methods differ from these requirements.
Authorization for premium shipping
The following requirements must be met in order to be admitted to premium shipping:
- The seller:inside account has been actively selling on Amazon for at least 90 days
- At least 10 orders with all shipping methods have been processed in the last 30 days
- The rate of shipments with a valid tracking number is at least 94% with the following providers: DPD, DHL, FedEx & UPS
Measurement of salesperson performance
Rate of order deficiencies
The order defect rate includes orders that have received a negative review, an A-to-Z request or a refund to a credit card. These factors form the basis for an overall assessment of the order defect rate. Ratings with one or two stars are considered negative.
Good customer support can prevent most A-to-Z applications.
Cancellation rate before fulfillment
The cancellation rate before fulfillment is the number of orders with shipping by the seller that were canceled by the seller before shipping was confirmed, divided by the number of orders with shipping by the seller in the relevant period. All cancellations are included in the calculation of this key figure, regardless of the reason.
Rate of late deliveries
The rate of late deliveries is the number of orders shipped by the seller for which the shipping confirmation was issued after the expected shipping date, divided by the number of orders in the relevant period. Late deliveries can have a negative impact on the customer’s buying experience.
Prime by seller
A major advantage of using the FBA program is participation in the Prime program. By using Amazon FBA, the items qualify for Prime. Thanks to the familiar shipping process and uncomplicated returns, many customers appreciate “Prime items”. This is often a purchase criterion.
It is currently possible to apply for a test phase for “Prime by Merchant”. In this case, merchants continue to ship the goods themselves, but have the opportunity to advertise their range as “Prime products” after a successful test phase. Amazon describes the requirements for the test phase as follows:
“Before you qualify for Prime by Seller, you must complete a trial period in which you demonstrate that you meet the high standards in the areas of Prime shipping and customer satisfaction. Items shipped during the Prime by Seller trial period will not display the Prime logo. Once you have successfully completed the test phase, you will be activated for Prime by Seller and the Prime logo will be visible to customers.
During the test phase, you must complete at least 50 valid Prime test orders perfectly. The trial period lasts between 5 and 90 days, depending on when you meet the performance requirements. If you do not fulfill these for Prime test orders within 90 days, the test phase is automatically reset and you can try again.
Once you have successfully completed the test phase, you will be activated for Prime by sellers. Your customers will then be able to see the Prime logo on the products of their choice.”
When participating in the Prime by Seller program, merchants are bound to fixed logistics partners of Amazon. Apart from the costs for transportation and the sales fee, there are no other costs for participation.