What is Amazon Prime?

Amazon launched Amazon Prime back in 2005, initially offering 2-day delivery for all Prime members. Two-day delivery might not sound incredibly fast today, but remember, this was 2005! Becoming a Prime member cost $79 per year at the time. Today, the price is about $99 per year, but the current membership offers significantly more than the original.

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Understanding Prime is crucial for you as a seller. I'll first go through the benefits Amazon Prime offers customers so you can understand their perspective on the shopping experience. Then, I'll cover what you as an Amazon seller need to consider.

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Amazon Prime - Shipping Times

For groceries, Amazon offers free 2-hour shipping and an incredible 1-hour shipping for a small fee. For other products, they provide numerous shipping options, often free for Prime members. For example, they offer free "Same Day Delivery" for all Prime members on purchases over $35 in the US. They also provide free 1-day delivery, 2-day delivery, and more.

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Amazon is also working intensively on its drone program, Prime Air, to offer even faster shipping!

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Streaming with Amazon Prime

In addition to incredible shipping times, Amazon also offers free streaming of music, movies, and TV series to all Prime members. This comes at no extra cost. Just Spotify costs as much per year as a Prime membership, but with Prime, music streaming is included. It's no wonder customers want this deal.

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Other Benefits

As if 1-hour shipping and streaming services weren't enough, there are even more benefits. These include access to e-books, product discounts, Prime Day deals, free photo storage, and more.

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How Many Prime Members Are There?

Given all the benefits mentioned above, it's easy to understand why customers want to be Prime members. In total, there are 150 million Prime members! This is a group that actively pays to take advantage of Amazon's offers and is familiar and comfortable with the shopping experience on Amazon.

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These 150 million members likely have several people in their vicinity who also use their family member's privileges to shop on Amazon. The number of members continues to rise rapidly. The number of members was 100 million in 2018, a growth of 50% over 2 years. Amazing!

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What Do You Need to Know as a Seller?

Considering the number of Prime members and their purchasing power, this is not a group you want to miss out on. By selling on Amazon using their logistics program, Fulfillment by Amazon (FBA), you can automatically offer all Prime benefits to your Amazon customers. If you choose to handle shipping yourself (Fulfillment by Merchant, FBM), you must first show Amazon that you can manage the fast shipping times they require. This is called "Seller Fulfilled Prime." Even with this solution, Amazon can offer better shipping times and conditions if you can't.

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So, in the end, it is essential to consider Prime when choosing between Fulfillment by Amazon and Fulfillment by Merchant.

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Summary

I hope you now know more about Amazon Prime, what it means, and what you need to consider. The important thing as a seller is to be aware of it and understand what it entails, but you won't need to do much differently. It's mainly if you choose to ship the products yourself to the end customer that you need to handle Seller Fulfilled Prime. If you use FBA, Amazon takes care of everything for you.

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If someone you know should also read this, be sure to share! And if you and your company need help with Amazon, you are warmly welcome to contact us at SellWave. All the best and good luck!