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Amazon sellers are paying 50-70% of their revenue for Amazon fees, including FBA fees that cost 20-35% of a product’s total price. While FBA is optional, most sellers are compelled to use it because it’s significantly more convenient and offers extra perks.
But what if there’s another option? Enter Amazon Seller Flex, a program that promises to give sellers the FBA advantage while enjoying inventory flexibility and more efficient costs. In this article, we discuss in depth the details of this innovative Amazon program.
Amazon Seller Flex is a customized fulfillment model where sellers control their inventory while reaping the benefits of Amazon’s extensive logistics and distribution network. It’s an innovative service that makes it easy for sellers to be in charge of their business operations and FBA warehouse.
With Seller Flex, merchants are responsible for:
Amazon only handles transporting the merchandise from the seller’s warehouse to the buyer’s home. This program was first introduced in India in 2015 and quickly gained traction with US sellers. However, not a lot of sellers know or have taken advantage of Amazon Seller Flex.
Products fulfilled through Seller Flex are still eligible for Amazon Prime, so you can still offer fast two-day shipping. Heavy and bulky products are best suited for this program since you can control the quality of your products and how they’re packed. You can also save on the costs of transporting items to the Amazon Warehouse.
When you join Amazon Seller Flex, you can access Amazon’s Warehouse Management System (WMS). You also access Amazon’s transportation network so you can schedule deliveries to your customers.
Amazon Seller Flex is an invite-only program. Sellers can’t join any time they want. Rather, they’d have to wait for an invitation.
In other marketplaces, like in Europe, you can apply for the program but they’ll still evaluate your eligibility and have a representative get in touch in case you’re accepted.
Here are the basic criteria to be invited:
Aside from the basic criteria, sellers are also expected to meet the following requirements to be accepted to the program.
Sellers must present a well-drafted and solid business plan that showcases how well they understand the opportunity. Becoming part of Seller Flex means managing your own warehousing operations. You’re not just storing inventory and forwarding them to an Amazon warehouse.
You’ll be in charge of the daily pick and pack of your store’s orders. This entails hiring manpower and enforcing an efficient system that guarantees fast deliveries. Amazon must be convinced that you’re capable of handling the additional responsibility.
Amazon checks that you have the required hardware to operate a fulfillment warehouse. These include:
This hardware requires extra investment on your end. You must also have a dedicated space to place these items and ensure they’re functioning as intended.
Aside from a business plan and the right hardware, you’ll also need the following:
When you get your invite to join the Seller Flex program, you can proceed with the registration.
If you don’t receive an invitation but believe that you deserve to get one, you can contact Amazon support and tell them about your situation. Here are their contact details:
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Becoming part of the Amazon Flex program has several advantages. If you’re invited to participate, seriously consider accepting the invitation and taking part in the program. Through Amazon Flex, you can efficiently ship your products worldwide with the help of Amazon’s logistic capabilities.
You’ll also enjoy the following benefits:
With Seller Flex, you’re taking some of the control away from Amazon. You’re now handling the warehousing and order packing, while Amazon takes care of shipping the products to your customers. You can control how you pack the products and place special care in ensuring customers receive them in the expected quality.
Unlike Amazon FBA where you give Amazon control over your entire order fulfillment process, with Seller Flex, you’re only tapping Amazon’s capable delivery fleet. By handling warehousing on your own, you can handle inventory better and avoid inventory discrepancies. You can also quickly refill low inventory and avoid out-of-stock scenarios.
Amazon Flex lets you take care of customer service and product returns. Any undelivered, damaged, or returned product goes straight to your warehouse. You don’t have to spend on removal orders or disposal of damaged goods from the Amazon warehouse.
Since you’re talking to customers directly, you can control the situation better and process returns faster. You can even avoid any negative feedback by giving customers exceptional after-sales service.
Amazon Seller Flex offers a quicker and more profitable method of delivering products to your customers. Since you’re handling the pick and pack, you can readily assure the quality of the merchandise to be delivered. With Amazon handling the delivery, they can ensure a quick two-day delivery window.
It’s a win-win for customers who want to receive accurate orders quickly. If your buyers are within the location of your warehouse, they can even get next-day delivery. These operational improvements lead to happier customers who will be willing to re-purchase from your store.
Since you’re no longer sending products to Amazon warehouses, you’re significantly saving on transportation costs. You also don’t have to recall slow-moving inventory from the FBA warehouse. All of the fast-moving and slow-moving inventory is kept in your warehouse.
Seller Flex is also different from FBM since Amazon picks up orders from your warehouse and handles delivery to customers. You can leverage Amazon’s shipping volume and negotiated rates with carriers, plus their delivery fleet so you don’t have to work with delivery carriers on your own. This significantly reduces shipping costs compared to handling deliveries independently.
Even though you’re handling order fulfillment on your own, you’d still get an FBA tag when you’re accepted to the Seller Flex program. The FBA tag is a unique product identifier attached to a product to help Amazon quickly identify it across the many warehouses in the country.
An FBA tag gives your product the credibility that it will be delivered within the timeframe promised. Shoppers know that your store can be trusted even if they haven’t heard of your brand before. You also get Amazon Prime benefits, which attract customers to your goods.
You don’t have to worry if you lack warehousing knowledge. Amazon gives extensive training so you can effectively manage your warehouse inventory and use their system. They are invested in helping you comply with their standards and become a successful Flex seller.
Although it’s a great program, there are still several limitations that you should consider before joining. It’s also not ideal for all sellers since the program makes sense if you already have thousands of SKUs or if you sell a particular kind of product.
Here are the drawbacks of the Seller Flex program:
Since you're taking a huge chunk of work away from Amazon, you’re also expected to invest in the infrastructure to support it. Handling your warehousing and fulfillment means having the warehouse space and manpower to continually meet Amazon’s standards.
As a Seller Flex merchant, Amazon expects that you can constantly fulfill orders within the timeframe required to give customers speedy delivery. That involves hiring at least six staff, maybe more, depending on the order volume and frequency.
You also need to spend on a larger storage space for all of your inventory, plus a packing area. Equipment like computers and printers are another consideration, especially since these items require upgrades over time. Without sufficient capital, these investments can be expensive.
The Amazon Seller Flex program isn’t for everyone. Amazon imposes strict requirements and makes the program invite-only to limit who can become part of it.
Merchants who sell expensive, bulky, or fragile products are priority candidates for the program. If you’re selling affordable and small items, the program won’t be beneficial for you.
In Europe, Amazon Seller Flex is limited to bulky products that meet specific weight & dimensions. Items must have a girth over 360cm or a length over 175cm. It should either be a multi-box item or weigh over 23kg. Furthermore, merchants need to sell a minimum of 16 units before Amazon collects the products.
These strict requirements make the program prohibitive for the majority of sellers. If you don’t meet the program qualifications, you can explore other Amazon seller programs like Seller Fulfilled Prime. This program lets you fulfill your orders and gives you the Prime badge in exchange for meeting certain criteria.
Seller Flex is only available for certain regions. Not all locations are covered so sellers outside these locations won’t qualify for the program. To learn if your location is covered, reach out to Amazon support and inquire about Seller Flex availability.
Amazon requires that you consistently meet high performance standards to continue as a Seller Flex merchant. Failure to meet these standards can revoke your membership in the program. These standards include proper loading and packing processes, minimum collection units, and timely order preparations.
Before signing up for the program, ensure that you have an efficient warehousing and fulfillment system in place. Amazon will also assess your preparedness to become a Seller Flex merchant and getting an invitation is a good indicator of your ability to meet their standards.
The majority of Amazon sellers enroll in the FBA program since it’s accessible and full of perks to help their business grow. However, growing concerns over increasing Amazon fees are driving merchants to explore other fulfillment methods.
Here’s how Amazon Seller Flex compares with Amazon FBA.
If you’re deciding between Amazon FBA and Amazon Seller Flex, you must consider the kind of products you sell and your business’s capacity to dedicate extra resources for warehousing and order fulfillment. Being an Amazon Seller Flex merchant is a serious responsibility since getting it wrong can spell disaster for your business.
If you decide that Amazon Seller Flex isn’t for you but you’d like to explore other fulfillment methods aside from FBA, then you should check out alternatives like Amazon FBM and Seller Fulfilled Prime.
A third of Amazon sellers opt for the self-fulfillment method dubbed Amazon FBM (Fulfilment by Merchant). These are merchants with established logistical capabilities and can confidently fulfill orders within Amazon’s standard timelines.
They either have their own internal warehousing and fulfillment operations or outsource these operations to third-party logistics services. Amazon Seller Flex is similar to these third-party providers by helping merchants streamline their fulfillment processes. However, there are some differences when it comes to cost and extra perks.
Here’s how working with third-party logistics services compares with Amazon Seller Flex.
For FBM sellers, joining Amazon Seller Flex is a great way to diversify their fulfillment options. You can either opt for a hybrid model or fully rely on Amazon’s delivery fleet. As FBA becomes more expensive and as you diversify sales channels like signing up for Walmart Marketplace, having your own fulfillment operations is an advantage.
As mentioned above, Amazon Seller Flex isn’t for everybody. It’s ideal to invest in this program if you offer certain types of products, such as:
Whether you opt for FBA, Seller Flex, FBM, or other fulfillment methods, you should carefully study the costs involved and how they impact your profitability. If it makes financial sense to fulfill the above items with FBA, then do it. Seller Flex requires an expensive investment and ongoing costs so you should ensure you can remain profitable while using this fulfillment option.
Running an Amazon store involves many moving parts and becoming a successful Amazon seller requires staying on top of these activities. That includes finding the most ideal fulfillment method, whether it’s FBA, FBM, or Seller Flex.
It’s also advisable to diversify your methods and explore hybrid fulfillment options. It’s even better if you can diversify sales channels and sell via other marketplaces or your own website. Whatever path you choose, having a reliable partner like Threecolts will ensure you optimize your eCommerce operations.
As an Amazon seller, you can take advantage of SmartRepricer, an automated repricing tool to ensure your products are competitively priced and can win the Buy Box. You can also use SellerBench to discover reimbursement opportunities and reclaim lost profits.
If you expand your marketplaces, using a tool like OnSite Support will centralize customer inquiries and feedback in a unified dashboard. This allows you to better support customers regardless of their buying channel.
Becoming a successful eCommerce entrepreneur may be challenging, but you don’t have to do it alone. Let Threecolts help you on your journey to success.
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