Guide to Amazon Prime: What Sellers Need to Know

With over half 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)

In 2022, Amazon made big waves by adding another bonus of free Grubhub+ for a year.

So what do all these perks cost? Historically, Amazon Prime has cost consumers $119 annually or $12.99 monthly. Prices went up in 2022, with people now paying $139 per year or $14.99 per month.

Editor’s note: Buy with Prime was introduced in early 2022 and gives other retailers outside of Amazon the opportunity to offer Prime shipping on their products. Learn more about the program here.

Membership is by household, so up to two adults (and four children) can enjoy the same Prime membership. There are more than 200 million Prime members in the US.

What is Amazon Prime Day?

Amazon Prime Day is a shopping holiday typically 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. Prime Day sales now regularly surpass Amazon’s Cyber Monday and Black Friday sales combined.

Prime Day for sellers 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 decide which products qualify for Prime:

• The seller must be using Fulfillment by Amazon (FBA) for that product.
• The 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). It's basically like an Amazon FBM Prime offering.

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 for 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.

Becoming an Amazon Prime Seller

Like a shepherd to the flock, Amazon is very protective of its 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, more reviews, fast product research, and better inventory forecasting.