In this article we tell you about Sellerflex which is a very popular programme. We will tell you all the proxess, it’s pros and cons as well.
- What is Seller flex?
- How to Apply for Seller Flex?
- Requirements to Start a seller flex site
- Benefits of Seller flex
- Issues in Seller flex
- Cost of Setting up a Seller Flex site
- Deciding if Seller Flex is good for you
- Order Processing in Seller flex
- Processing Returns in Seller flex
- How to Apply for Reimbursement in Seller flex
What is Seller flex
Seller flex is a program launched by Amazon for all seller on Amazon. It allows you to keep your inventory in your warehouse while making your inventory prime eligible.
How to Apply for Seller Flex?
As per Amazon you can not apply for seller flex. It is an invite only program. Amazon have some hidden criteria, based on that they will send an invitation email to eligible sellers.
Though there are no official guideline for applying to Seller flex. Below are the criteria that we have found can get you Seller flex.
Note: Below criteria are based on our experience with Amazon India sellers
Criteria 1: Your monthly sales should be > 6 Lakh ( 0.6 Million ) per month
Criteria 2: Your Seller Rating Should be 90% or above
Criteria 3: Your monthly units should be close to 1000.
Please note that we are not 100% sure even if you satisfy all above criteria you may not get invited.
One more way you can get seller flex is by getting in touch with flex managers of existing Seller flex sellers. Since this seller have contact with their flex managers, they can ask them to check if you are eligible and if found eligible your get an email from them.
Requirements to Start a Sellerflex Site
As per Amazon guidelines, below are the requirements to start a fully functional site.
Below are the materials that you would need to start a sellerflex site.
- A Barcode Scanner (1 or more) to scan barcode labels
- An A4 laser printer ( this normally you already have if you are selling on Amazon) for printing invoices
- A Shipping Label printer (Model : TSC DA 310)
- A Gift Label printer ( Model: TSC TE 244)
- An UPS Inverter for power backup
- Amazon prime packing material. This you need to buy from amazon recommended sellers only
- Racks or bins as per your product range and order volumes
Benefits of Seller flex
There are many benefits for enrolling in Seller flex. Below are the benefits of seller flex
- Increased Sales: Amazon prime tag is given to all the products who are either in FBA or enrolled under Easy Ship Prime program or Self Ship Prime program. As per our observation prime products can increase your sales tremendously as compared to Easy Ship or Self Ship. All your products will get Prime tag in seller flex, customer will be able to see exact delivery times and will be able to pay for prime one day or two day shipping. This can increase your sales as your products are now getting the same benefits as FBA products.
- In-house Inventory will be Prime Eligible: Unlike FBA, you don’t have to send your inventory to Amazon warehouse to be eligible for prime tag or Amazon Fulfilled tag.
- Zero monthly Storage Fees: Since you won’t be sending your inventory to Amazon warehouse, you will have to pay Zero storage cost. You can use your existing warehouse for storage. If you sell products with weight more then 1-5 KG, you will see tremendous cost saving on monthly storage fees.
- Zero Removal Fees: In FBA, if you wanted to remove your unfulfilled inventory, you have to pay the removal fees as well. In seller flex you will be getting your return orders on daily basis so there will be zero additional removal fees you meed to pay
- Zero Pick Fees: Since the product is with you and you are responsible for picking and packing your products, you do not need to pay the picking fees to Amazon. Amazon charges ₹5 per order, if you receive 1,000 order per month then it’s straight ₹5,000 saving per month.
- Less Packing Fees: For FBA, amazon used to charge ₹5 per order as packing fees. And most of the time amazon did not use any packing material on your product. This fees will also be saved you. For 1000 orders, straight ₹5,000 saving per month
- Zero Warehouse Shipping Fees: In FBA, seller send the product to FBA warehouse which can charge from ₹5 per KG to ₹15 per KG. If your products are heavy then the cost associated with this was very high. You will save this cost in Seller flex.
- Same staff as Easy Ship: Seller flex is very similar to Easy Ship kn terms of daily operations. You get an order, pack the order and dispatch. Though the steps are different, same staff can do the daily work.
- Zero warehouse storage limits: In FBA, every warehouse have some storage limits assigned to it for every seller. You can not exceed those limits. This becomes a bottleneck in holiday season when sales are all time high. Since there is limit to the storage you will not be able to store more then your limits.
- No FBA Appointments: In FBA, you need to take appointments to before you can send your inventory to an FC. In sellerflex since the inventory is in your warehouse, you don’t need any appointments.
Issues in Seller Flex
Seller flex is a really great initiative by Amazon. It make sense to use seller flex for every seller. But with great power come great responsibility.
Below are some of the issues with seller flex.
- Additional Manpower: If you are someone with just one staff then you will find seller flex as too much manpower demanding. Since there are multiple activities that you need to do from in-bounding inventory into flex to checking returns and filing claims on daily basis to removing inventory from flex. This needs manpower. Depending on your order count you would need manpower.
- Daily Claims Follow-up: Since you will be getting returns on daily basis and will be filing claims for damages. You would need daily follow-up with seller support.
- Warehouse Space: In seller flex the inventory is available in your warehouse. If you are buying additional warehouse space then it will not be much beneficial.
- Additional Fees: In seller flex, a new fees is introduced called “Technology Fee”. Technology fees is currently charged at ₹10 per order. So if you get 1000 order per month then it comes to ₹10,000 per month.
- Increased IT Cost: You need to purchase 2 additional shipping label printers, 1 UPS Inverter, More packing materials for all your orders. Two internet connections, one primary and other backup.
Cost of setting up a Seller flex Site
There are many benefits to start a seller flex when compared to FBA or Easy ship program. In this section we will see the cost to start and operate a seller flex site.
One time cost of Seller Flex:
- Shipping Label Printer: TSC DA 310 printer cost: ₹ 16000
- Gift Printer: TSC TE 244, cost: ₹9000
- Gift Ribbon: ₹ 500
- Laser Printer: Every seller have this, if you don’t have then add cost of ₹10,000
- UPS: Any UPS for power backup, cost: ₹2000
- Racks or Bins: Average cost of this would be ₹5,000
So, total one time cost of running a seller flex comes to around ₹42,500
Recurring Cost of Seller Flex:
- E-commerce Executive: E-commerce executive can rake salary from ₹15000 to ₹30000.Consider ₹20,000 average salary.
- Packing Staff: You will need minimum one packing staff, but depending upon your daily orders, you may need more packing staff. The average salary of packing staff is ₹10,000 per person
- Working/Office Space: Depending upon the products you sale you will need an area for office and packing. The cost of space depends on the location of your office. In metro cities to cost are pretty high as compared to non metro cities. Average cost of space would be ₹25,000
- Packing Material: Depending on number of order that you get per month your coat of packing material will vary. An average that we think would be ₹10,000 per month considering you receive 1000 order per month and cost of packing per order is ₹10
The Average Recurring cost per month would be around ₹65,000
So from above we can see that running Seller Flex will be a costly job and if you are not making more than ₹1 Lakh per month on Amazon, starting Seller flex could be a very bad idea.
Take above points in consideration before enrolling into Seller flex.
Deciding if Seller Flex is Good For You
Above we looked at different costs associated with seller flex, it’s issues and benefits too.
In this section we will try to understand from product category perspective. As there are some product categories for which flex is a better option.
If you are selling products which weights more then 1 KG then seller flex may not be a good option. Since you will be paying more to send your goods to Amazon, and the monthly storage fees could eat your profits if your products are not selling for long.
Sellers who are selling branded products need to keep eye on their monthly storage fees if the product volumetric weight is greater than 1 KG. It can eat your profits pretty fast.
In case of seller with branded product, they normally maps thousands of listing and put inventory in FBA. Now due to price fluctuations in branded products they map not get the buy box, in turn will have low sales.
If low sales continue for longer period for a product with heavy weight then it will affect your profits tremendously.
Warehouse Space Cost
If you are having your business in a location where rent costs are high then saving on monthly storage fees might not give you any advantage as compared to FBA. So compare your warehouse cost vs FBA monthly storage cost and take decision.
Automated FBA Business
If you are a nomad, and don’t like having an office and managing people then Seller flex might not be a good idea.
Of course you can higher people to manage operations, but employees don’t perform well in absence of their boss.
Think, how you want to run your business and make decision.
Fast Selling Products
If you have products which are fast selling then keep them in FBA.
To explain this better let us consider an example.
Suppose you are receiving 100 orders per day. Out of those 100 orders, 50 order are coming for a single product only. In that case it is better to keep this product in FBA.
For this 50 orders you can save so much on manpower, warehouse space and packing material cost.
So based on this data take your decision.
Order Processing in Seller flex
We are working on this section
Processing Returns in Seller flex
We are working on this section
How to Apply for Reimbursement in Seller flex
We are working on this section