When e-commerce first started, people were hesitant to buy online because the digital world still felt like a realm separated from reality.
Good shipping practices have put those doubts to rest. Today, shipping is the one phenomenon that ties the intangible digital space to our own dimension, and, like with any part of the purchase process that can cause uncertainty or anxiety, Amazon is working hard to make the experience smoother and safer.
In this article, we’ll take a deep dive into the nitty-gritties of Amazon Premium Shipping, so you can provide your customers with the best shipping service that they certainly deserve.
What Are Premium Shipping Options in 2021?
Staying competitive means you have to offer your customers what they already expect, plus benefits that not everyone can offer. When it comes to shipping and e-commerce, people already expect timely delivery, along with an undamaged package and relatively fast service.
In recent months, and due to the pandemic, Amazon launched several Premium Shipping options to meet the needs of its customers:
- FREE Same-Day Delivery
- FREE One-Day Delivery
- Two-Day Delivery
- FREE 2-Hour Grocery Delivery
- Amazon Day
- Key by Amazon In-Garage Delivery
- Key by Amazon In-Home Delivery
- Amazon One Time Password Secure Delivery
- Amazon No-Rush Shipping
- Amazon Hub Delivery and returns
It should be noted that most of these options are available to customers within the United States. However, FREE Same Delivery, FREE One-Day Delivery, and Two-Day Shipping are also available in Mexico and Canada.
It is clear that Two-Day Shipping is making customers happy in Europe, India, and Canada. Australia, on the other hand, has different shipping options, rates, and specifications.
As a rule of thumb, in the US, sellers must be able to meet the following criteria to enjoy the benefits of Amazon Premium Shipping options:
- Selling for over 90 days, at least, you will also need to have the following metrics for the last 30 days:
- An on-time delivery score of 97% or higher
- Valid tracking rate of 99%
- A cancelation rate of less than 0.5% when it comes to cancelations initiated by the seller
Since these options are not available in all parts of the world, we will focus on the advantages that Same-Day Delivery, One-Day Delivery, and Two-Day Delivery offer.
1. Same-Day Delivery (United States)
There are some products that you won’t even consider buying online because it’s more convenient to get them locally.
Same-day delivery aims to cater to your local customers in as fast as 5 hours! So, instead of going to a brick-and-mortar store, they can receive their products in the comfort of their home.
This speedy shipping service is available in thousands of cities in the United States, such as Philadelphia, Phoenix, Orlando, and Dallas.
Since Amazon is constantly expanding its services, it is recommended that you stay on top of the shipping availability updates on Seller Central.
If you’d like to know if your ASIN is eligible for this shipping option, check out the following list of requirements:
- You need to be enrolled in Fulfilled by Amazon (FBA)
- Products must be new, small, light, and affordable
- They must not fall into the “dangerous goods” category
Check your inventory’s health in the Restock Inventory tool.
Customers can check if their zip code is eligible for Same-Day deliveries by visiting the Amazon Same-Day Store.
Image: Amazon, Same-Day Store
With this option, Prime Members can receive their deliveries by 9 p.m., as long as they order before noon, and with orders over $35 in products marked “Prime Free Same-Day”.
If their orders are under $35, customers can pay a delivery fee of $ 2.99.
2. One-Day Delivery (United States)
To compete with physical stores Amazon has invested substantial amounts of money into logistics and delivery.
One-Day Delivery is available to sellers who have proven to meet very high delivery standards.
In order to be eligible for One-Day Delivery, you must take into account the following requirements:
- Be selling on Amazon for at least 90 days
- Have a delivery and shipment rate of at least 95% on eligible orders
You should check the following items, on a trailing 30-day basis:
- On-time Deliveries: A 92% score for Premium Shipping orders
- Valid Tracking Rate: At 94%, using IDs from UPS, USPS, FedEx, or OnTrac
- Cancellation Rate: Less than 1.5% for Premium Shipping orders
- Order Threshold: At least 10 orders across all shipping options
Note: In the US, Amazon sellers that meet high delivery performance standards can enable One-Day/Two-Day Delivery in their Shipping Settings on Seller Central.
3. One-Day & Two-Day Delivery (Europe)
In Europe, the only Premium shipping options available are One-Day Delivery and Two-Day Delivery.
If we think about it, getting a package in one or two days is still an amazing accomplishment of human ingenuity.
One-Day & Two-day Shipping are free premium options for those sellers who meet high-performance delivery standards.
But beware! Being enrolled does not automatically make your products available for these timeframes, you still have to meet the following metrics:
- Sell on the platform for at least 90 days
- More than 10 orders in the last 30 days
- Have a valid tracking rate of 100%. (In the UK, this includes tracking IDs of Royal Mail, Hermes, Yodel, DPD, UK Mail, Parcelforce, among others)
- An on-time delivery rate greater than or equal to 97%
- A Seller-initiated cancellation rate of less than 0.5%
Want to know more about Amazon Shipping in Europe? Read all about Amazon Shipping, Changing Ecommerce Delivery In The UK
European FBA (Fulfillment by Amazon) vs MFN (Merchant Fulfilled Network)
If you have been successful with your Amazon business in your home country and you would be interested in selling on Amazon Europe, we suggest you take the following into account:
- There are sellers who use a combination of both FBA and MFN, especially if their products fall into the category of those in which fast delivery is not necessary or essential.
- Currently, the import VAT rate is 20%, therefore, if you decide to self-fulfill into Europe, you will not have to hold inventory in the country, and that will prevent you from paying import VAT. Note: Verify this information with your tax specialist.
- If you use MFN, you must be as straightforward as possible about the shipping times so that your customers do not create wrong expectations about when they will receive their package. This way, your reviews will not be affected by this issue.
- Seek professional help so that you are informed about the EOIR (Economic Operator Registration and Identification), your VAT registration, IOR (Importer of record) which is required to sell in Europe, and the DDP (Delivery Duty Paid) as these factors are closely linked to import duties and taxes. Specially, because neither Amazon nor FBA will be responsible for these issues. This will also prevent your clients from paying extra charges.
- Keep in mind that the fact that you can list your products in Amazon European marketplaces, does not guarantee that you can send your products into the region. Verify that your product is eligible to enter the European territory and that it complies with their regulations.
- If you sell in the United States, and you want to introduce your products in Europe, bear in mind that the labels you use in the U.S. will not be allowed in European fulfillment centers.
Visit Amazon’s Service Provider Network to learn more about price discounts and FBA international shipping issues.
Premium Shipping Options vs Seller-Fulfilled Prime
Premium Shipping & FBA
By enrolling in Amazon Prime, shoppers have automatic access to the following benefits:
- Fast, Free Delivery
- Exclusive Deals
- Prime Entertainment (free games, award-winning movies and TV shows, free songs, etc.)
It is important to emphasize that your customers will be charged a fee to cover the shipping costs unless you’re eligible for the Premium Shipping options.
Premium Shipping is available to FBA sellers with strong performance metrics.
If you are selling through Seller-Fulfilled Prime (SFP), this means that you are a high-volume seller who is allowed to sell under the Prime label and that you keep your inventory in your own warehouse or 3PL.
Amazon is very strict when it comes to allowing sellers to fulfill orders under the Prime system, so be prepared to meet your delivery estimates, and to provide exceptional customer service. You will also have to manage and develop strong relationships with your shipping partners to ensure that your orders are picked up and delivered on time. Additionally, you will need to maintain a feedback rating of 4.5 or higher for 30 consecutive days.
Seller-Fulfilled Prime gives you more control over your inventory and the overall logistics of your operation, which is great.
However, you will be held to the standards of Amazon-Fulfilled Prime, which is a tall order to fulfill.
Setting Your Delivery Rates
Amazon recommends that you keep your shipping rates as competitive as possible so that you have a better chance of winning the Buy Box.
We know that one of the factors that Amazon takes into account to determine who will be the winner of the buy box is order fulfillment, and therefore customer service. Satisfied customers will increase your chances of landing the coveted prize.
Other aspects to consider are:
- Performance metrics
- Length of time selling on Amazon
- Order defect rate
- Product pricing = fair rates
They also provide the following 3 suggestions so that you can choose fair rates:
- Weight-based shipping: Amazon suggests that you determine a per-delivery rate, in this way, they will calculate the total delivery depending on the weight per kilo of each product ($ 0.50 / Kg).
- Item-based shipping: Set up a per-delivery rate, let’s say $ 4.00, and a per-item rate of $ 1.00. So, if a buyer buys two items from you, Amazon will determine the cost of delivery as follows: $ 4.00 + $ 1.00 x 2 items = $ 6.00.
- Price-Branded shipping: Through this option, you can create different price ranges for your orders. This way, Amazon will be able to check how much it needs to charge each time someone buys one of your items.
Visit the Shipping Settings section in Seller Central to learn how you can create, edit or delete shipping templates. Also, go check the International Delivery Rates and Times page to have a clearer idea of how much each seller is charging per country.
Premium Shipping Options | Eligibility
Amazon is a company that will put customer satisfaction above all. They pride themselves in knowing that every purchase represents a good experience and as few problems as possible.
This is the reason why, for most of Amazon’s programs, you are going to find some sort of screening process to ensure your ability to perform and meet the company’s high standards.
Once you become eligible for Premium Shipping, your numbers will be constantly monitored to ensure you can keep these benefits. This applies to the performance of all your Premium Shipping deliveries, with the exception of Seller-Fulfilled orders with a Prime Badge.
→ You can keep track of the specific numbers that will play into this on your Premium Shipping Eligibility dashboard.
Some sellers may have a business model that does not allow them to meet the eligibility requirements, Amazon does not make any exceptions and will not grant access to the benefits of Premium Shipping.
How Do I Stay Eligible for Premium Shipping?
Anyone can feel like keeping up with Amazon standards might be too much work, or a task too great to achieve.
Before you are put off by the idea of the upkeep, rest assured there is nothing otherworldly to it. If you are a good seller you already have what it takes.
Restoring Your Status for Premium Shipping Eligibility
With all the requirements, it might seem like losing eligibility is the end of the world, you can relax, it’s not a punishment and it doesn’t mean you can’t bring your numbers up again.
If your status was revoked, you can appeal at any time by submitting a Plan of Action. With this, you can request the restoration of your Premium Shipping options, as long as you show a status of ‘restricted’ on the eligibility tool.
→ We also recommend you constantly review your performance metrics on your Account Health dashboard for more detailed information.
If you are interested in knowing what options you have, in case you are not eligible for Amazon Premium Shipping options, we recommend visiting amazon.com/spn to find your EU shipping partner.
Some Things to Keep in Mind…
One of the biggest disadvantages of online shopping is the waiting time. Inherently, there will be a pause between the moment of purchase and actually enjoying your product.
So, the more you can shorten that time your customers have to wait, the better the experience becomes. This is why Amazon Premium Shipping options create an incredible advantage for sellers, but it doesn’t come without a couple of aspects to consider:
Conditions can change at any moment
The 2020 pandemic is a good example, when Amazon decided to stop shipping and fulfillment for non-essential items, many sellers found themselves in a difficult situation.
Those who relied solely on FBA (Fulfillment By Amazon), suddenly had to switch to the FBM program (Fulfillment By Merchant), meaning they had to take care of their own logistics or find another company that could.
While this is an extreme case (meaning it’s unusual and not the norm), it presents a good portrayal of risks you need to consider.
Mistakes are a luxury
We mentioned before how Amazon will monitor your performance to ensure your ongoing eligibility for the Amazon Premium Shipping options. In case your numbers drop, you will be at risk of having your eligibility revoked.
These options will be disabled for your listings and on your Premium Shipping dashboard, your status will be set to ‘not eligible’.
This all sounds scary enough. The real consideration here is that you will need to have systems and processes in place to ensure you are on point with your cutoff times.
A lack of personal branding
While there are some ways to get your brand involved, most of these will fall into a secondary role. Having Amazon fulfill your orders is magnificent, efficient, and time-saving, there is no doubt, but keep in mind that all of these products arrive in an Amazon box, with the Amazon tape, and the “Amazon smirk”.
This might not seem important to some, depending on the goals they set off to achieve with their business. If one of your goals is to position yourself in your respective market and make your brand known, this is something to consider. Most of us will associate what we bought with that first product we see on the Buy Box.
You might remember which items you have bought through Amazon but you might not remember the actual seller.
So, make sure that your product and its features are eye-catching, original, and of good quality so that your customers feel the need to buy them again, or simply become fans of your brand.
Order Cutoff Times
For all your Amazon Premium Shipping options, you will need to set all your order submissions to 2:00 p.m. or after. It’s very important to remember this is not necessarily in your time zone but rather the time zone for your warehouse located farthest east.
Other Premium Shipping Options for Amazon Sellers
Want to take shipping to a next level and make it a competitive advantage?
Then you might want to think about software that can help you scale by automating your shipping process in the back, while offering the best services to your customers.
Sendcloud is an all-in-one shipping platform that you can easily connect to any of your online stores or marketplaces like Amazon.
Your orders stores get instantly connected to 80+ carriers such as DHL, DPD, UPS, and GLS.
This makes it possible to increase conversion by offering flexible shipping options in your checkout, save time by automatically printing picking lists, packing slips, and shipping labels, automatically send track and trace notifications in your own branding and handle returns in a customer-friendly and hassle-free way. Find out more about Sendcloud or sign-up for free to check it out.
Amazon Premium Shipping options create a colossal advantage for sellers, not to mention the way they have shaped our shopping habits and the possibilities of selling online.
Shipping is a big part of the e-commerce process. It plays such an important role in the customer’s experience and perception of all the brands involved.
For this reason, Amazon sellers must pay close attention to the way they handle their fulfillment in order to meet the needs of its customers, and maintain a loyal and happy customer base.
We hope this post gives you a broader idea about the Premium Shipping options that Amazon has to offer in 2021 and we wish you the best of luck on your selling journey.
About the author
AMZ Advisers is a full-service eCommerce consultancy focused on creating growth opportunities for brands, manufacturers, and private labels across the US, Europe, Canada, and Asia.
The AMZ Advisers team has been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.