Guide to Amazon Prime: What Sellers Need to Know

With 51% of American households participating in the Amazon Prime program and Prime Day sales beating Amazon’s Cyber Monday and Black Friday sales combined, many Amazon sellers want to better accommodate Amazon’s extra-long VIP table. The question is, how? How can Amazon sellers take advantage of Prime’s popularity to sell more and grow bigger?

In this guide, we break down everything Amazon sellers need to know about the Prime program — what it is, how it works and how to incorporate it into your sales strategy.

What is Amazon Prime?

Let’s start with the basics: Amazon Prime is a special kind of membership to the Amazon marketplace that gives online shoppers extra perks. Think of it like a paid premium account to shopping on Amazon, with more bonuses than a free account.

What bonuses? Amazon Prime members enjoy…

Free same-day, one-day, or two-day delivery, depending on location
30-minute early access to Lightning Deals
Free access to Prime Video, Prime Music, and Prime Photos (US only)
$10 credit on pre-orders of select video games
One free download per month on Kindle First
Special $2.99 per month fee on FreeTime Unlimited (non-members pay $4.99)
Discounts at Whole Foods, including in-store shopping
Free games and in-game loot at Twitch Prime
Access to Amazon Prime Visa Card with money-back deals
Access to Kindle Owners’ Lending Library
Access to Amazon Elements products
Access to Prime Day sales (see below)

So what do all these perks cost? As of this writing, Amazon Prime costs $119 paid annually or $12.99 paid monthly. Membership is by household, so up to two adults (and four children) can enjoy the same Prime membership.

What is Amazon Prime Day?

Amazon Prime Day is a shopping holiday held during the month of July. Prime members have access to exclusive deals that normal members don’t, making it a shopping frenzy for eligible customers. (As mentioned above, in 2019 Prime Day sales beat out Amazon’s Cyber Monday and Black Friday sales combined.)

Note: Due to COVID-19, the 2020 Prime Day event has been moved to later in the year.

Prime Day has been so successful, in fact, that competitors are now offering deals and promotions around the same time to join in on the profit. Prime Day alone is a good enough reason for Amazon sellers to understand and target Prime members.

How to Sell Amazon Prime Products

Want to enroll your products in the Amazon Prime program? There are two factors that determine whether a product is eligible to sell on Amazon Prime:

Seller must be using Fulfillment by Amazon (FBA) for that product.
Seller’s reputation must be excellent.

So right away, in order to market yourself to Amazon Prime members, you need to participate in the FBA program. Using FBA comes with its own fees, regulations, and, of course, advantages.

The other factor is your reputation. Although Amazon keeps secret the criteria they use to accept or reject Prime sellers, you can bank on some general guidelines to improve your chances:

Get your product return rate down as low as you can.
Use PPC campaigns to boost both visibility and sales.
Offer excellent customer support.
Manage your inventory vigilantly — always restock on time, or else your Amazon ranking suffers.
Make sure your feedback and customer review ratings are strong.

That said, new sellers are going to have to prove themselves before selling products on Amazon Prime. You have to put in your time to build your reputation first, and only then target the bigger fish.

Prime Exclusive Discounts

In summer 2019, Amazon introduced Prime Exclusive Discounts. As the name suggests, these are discounts exclusively for Prime members — a big help if you’re targeting Prime shoppers.

The Prime Exclusive Discount displays the regular price crossed out with the discounted price highlighted, plus a savings summary in both the search results and product detail page. Spelling out shopper savings like this is a great way to make the customer feel special with savings normal shoppers can’t access.

During Prime Day, these products also display a Prime Day Deal badge.

However, as with other campaigns targeting Prime members, only FBA members can use it. If you’re already an FBA member, you can create a Prime Exclusive Discount in Seller Central, under the Advertising tab.

What is Amazon Seller Fulfilled Prime?

Last, we’ll discuss Amazon Seller Fulfilled Prime. This is a specialty service to select sellers that allows them to sell products on Amazon Prime but ship them from their own warehouse (bypassing the above rule about FBA).

Before you get excited though, this is an exclusive club — so exclusive, they’re not accepting registrations at the moment. You can, however, join the waitlist for notification when enrollment reopens.

The big advantage of Amazon Seller Fulfilled Prime is control over storage and shipping; it’s your only option for handling shipping yourself on Prime products. The program is intended for sellers who already have a perfect shipping model set up, but you’ll need to prove you’re a successful seller with your reputation and shipment records.

In addition to shipping benefits, you also get two advantages typically reserved for FBA members. First, you can display the Prime badge on your products to add incentive Prime members to buy them. Second, you have an increased chance of winning Buy Boxes, just like FBA sellers.

If Amazon is your primary marketplace, but you don’t want to rescind shipping your own goods, Seller Fulfilled Prime is the best way to compete with FBA sellers without actually joining them.

Conclusion

Like a shepherd to the flock, Amazon is very protective of their Prime members. Because Prime members are a steady source of income regardless of how much they buy, Amazon takes extra measures to ensure their happiness. That’s why they have such strict criteria for which products qualify for Prime.

No matter what, you need your seller reputation in tip-top shape just to be considered. You’ll need to optimize your sales performance and get rid of any blemishes on your record before even applying. If you want some extra assistance, the eComEngine suite can streamline your Amazon success: better feedback, better product research, better inventory forecasting and better pricing.