In the highly competitive eCommerce industry, online retailers can gain a major advantage as an Amazon Prime Seller. Launched in the year 2016, the Amazon Prime membership for retailers is much more than just a badge. It provides benefits like:
- Improved product visibility
- Customer attraction
- Higher sales
With the added credibility of the Amazon Prime Badge, retailers automatically receive the stamp of authenticity, thus increasing the chance of Amazon customers picking them over the competition. One of the reasons they are more likely to pick up products from Amazon Prime badge holders is due to their faster delivery mode. Besides that, Prime members have a “head start” over non-members during any major Amazon sales event or promotion. During the peak festive season, Prime members have reported a 3x increase in their sales.
That said, it’s not easy for Amazon retailers to get this prestigious badge, particularly those choosing the Seller Fulfilled Prime (SFP) option. Here’s a look at some of the challenges that retailers face in getting the Amazon Prime Badge.
Why is it challenging for retailers to get the Amazon Prime badge?
Retailers who opt for the SFP method for order fulfillment must use their own warehouses and distribution centers to store and ship their products. However, they also need to meet Amazon’s strict standards for product shipping. On the positive side, SFP reduces the shipping costs for sellers on the Amazon platform.
What’s more challenging is that Amazon regards the retailer’s performance metrics when determining their Prime membership eligibility. These metrics are designed to ensure consistent customer service. Here are some of the key metrics:
- Order defect rate – or the percentage of customer orders with a negative rating.
- Order cancellation rate – or the percentage of orders canceled by sellers before shipment.
- Order delivery time – or the number of orders delivered in the promised timeframe.
To improve customer service, sellers opting for the SFP method must fulfill the following requirements:
- Deliver a minimum of 100 Prime packages during the initial trial period of 5 to 90 days.
- Offer customers the same-day or next-day delivery option – with zero-day order handling time.
- Comply with Amazon’s product return policies.
- Absorb any additional costs associated with product shipping and order fulfillment.
If sellers fail to meet these requirements upon completion of the trial period, Amazon can suspend or remove the Amazon Prime Badge from the particular seller.
To acquire Amazon Prime membership, retailers under SFP must efficiently run their warehouses and distribution centers in multiple shifts each day. With a fixed number of warehouse workers, retailers may not find it feasible to run multiple shifts. Besides, the ongoing labor shortage and costs in the retail industry make it harder for most retailers.
Can automation address this problem? Let’s see how.
How automation can improve labor productivity
In the current tight labor market, retailers need to improve overall productivity without increasing their headcount. One feasible solution is automating their warehouse operations, which can improve labor productivity – and even possibly meet the stringent Amazon Prime requirements.
By automating manual warehouse tasks, automation tools can help the existing workforce to focus on more creative and strategic tasks. Besides improving productivity, automation can boost job satisfaction and create an engaged workforce.
Here’s how automation tools can boost labor productivity in any retail warehouse or distribution center:
- Cost efficiency
Retailers can leverage automation tools to boost productivity without increasing their operational costs. Automated processes demand lower human intervention, thus reducing costs. Additionally, automation can eliminate wastage costs caused by human errors.
- Accuracy
To meet Amazon’s standards, retailers must deliver accuracy through their daily operations. This includes performing repetitive tasks like order packaging with precision. With automation, retailers can stay compliant with quality standards and produce a consistent output.
- Scalability
Amazon sellers must provide scalability to adapt their operations for a higher volume of customer orders and market demands. Automation tools are designed to provide this scalability – without having to increase (or decrease) the workforce.
- Decision-making
In a competitive market, retailers need data-driven decision-making ability to foresee disruptions and take corrective measures. Automation tools enable them to leverage real-time warehouse data for valuable insights, which can influence business strategies.
Additionally, warehouse automation can create a safer work environment for the existing workforce. For instance, automated robots can reduce the level of physical labor and the risk of workplace injuries. This enables retailers to improve job satisfaction and employee retention.
Conclusion
The online retail industry has experienced a major transformation in recent years, with trends like same-day deliveries and last-mile fulfilment. With the Amazon Prime badge, registered sellers have a first-hand advantage over competitors in increasing their sales and revenues.
As an eCommerce solution provider, Cartesian Kinetics understands the business challenges faced by retail players. Our automation tool, Carte+ is designed for retailers to implement same-day deliveries. Experience the advantage that Carte+ provides in the eCommerce domain. Reach out to us today!
