The goal of this post is to help third-party sellers understand how to create an Amazon Merchant Shipping Template. The past year has not only disrupted the way customers shop and purchase their goods but also has changed the way that manufacturers and brand owners deliver goods to their customers. The most successful merchants on Amazon are leveraging a combination of Amazon’s Fulfillment By Amazon Program (FBA) and Seller/Merchant Fulfillment to deliver their orders. Whether you have historically used FBA and are creating your first Merchant Shipping Template, or you are an experienced Seller Central merchant shipper, the purpose of this blog post is to help you understand the basic requirements and best practices used when creating Merchant Shipping Templates. Creating a customized shipping template allows you to configure different shipping rates (and transit times) for different regions. This blog post will also help you understand the many ways that you can tailor a merchant shipping Template to meet the expectations of your customers.
Minimum Requirements of Merchant Shipping Templates:
Before you start creating your merchant shipping template, it is important to understand the Minimum Requirements that all (domestic) shipping templates must meet in order to avoid error messages during setup up.
Each shipping template must offer at least standard shipping, and regions that have two-day delivery must also have standard shipping. Amazon describes the Minimum Requirements in three distinct ways: Reach, Rates, and Address Requirements.
Reach: Shipping to all states in the continental United States is required (excluding Hawaii, Alaska, and U.S. protectorates). If you choose to offer free economy, shipping to all continental US Street Addresses is required.
Rates: For the Standard Shipping Options, the shipping rates charged to customers must be the same for all regions in the continental United States, even if the cost to ship varies significantly by region.
Address: You may opt out of shipping to P.O. Boxes, but shipping to street addresses is required. You cannot change the rate based on the address type.
Per-Item/Weight Based shipping vs. Price Banded Shipping:
Amazon offers two methods for calculating shipping rates that you charge to your customers.
Per-Item/Weight Based Shipping:
If you offer per-item/weight-based shipping, set a charge for each shipment and either a per-pound charge or a per-item charge for handling. When a customer buys your products, Amazon applies your per-shipment charge and then calculates the appropriate per-pound or per-item charge for each item in the order.
Price-Banded Shipping:
If you offer price-banded shipping, create rates that vary by the product price range, such as $0 to $25, $25.01 to $50, $50, and up. Each price band has its own shipping rates. When a customer buys your products, Amazon reviews the total order amount (excluding tax), identifies the band for the total price, and applies your shipping charge for the price band.
Should I Offer Free Shipping?
In today’s evolving marketplace, customers shopping online have become accustomed to fast, and reliable shipping, thanks to Amazon Prime Membership. Free, 2-day shipping was considered a luxury only a few years ago but is now considered a requirement for many e-commerce shoppers. For this reason, it is important to consider the negative impact on your sales if you choose to charge customers to ship their items.
For most standard-size options, Amazon offers a variety of shipping options through Amazon Buy Shipping option. Leveraging Amazon’s purchasing power with small parcel carriers allows sellers to reliably forecast the cost of Standard-Shipping throughout the continental United States. This allows sellers to include the cost of shipping into each product's “Item Price” and make an offer for their item that includes “Free Shipping” in the Buy Box.
For oversize products, the cost of shipping can vary dramatically, depending on the size and weight dimensions of the product, but also depending on the ship-from and delivery locations on the order. For these types of products, some sellers choose a strategy that excludes the cost of shipping from their product’s “item price” and instead build a custom shipping template that accurately provides the cost of shipping to each customer’s doorstep. This strategy provides a competitive item price to the customer, as well as full transparency into the true cost of shipping an oversized item to the customer’s doorstep.
Considerations when Creating a Custom Shipping Template:
In addition to pricing considerations, it is also very important to consider the transit times required to reach your customers in different locations.
For Standard Size options, it is common for sellers to offer free, standard shipping items, with a forecasted transit time of 7-14 days. This method allows sellers to leverage the low-cost network of Small-Parcel Delivery couriers but neglects the current transit time expectation of today’s e-commerce shoppers.
Sellers can choose to offer more competitive transit times within the Expedited Shipping section of their Merchant Shipping Templates. With Expedited Shipping, you can create distinct regions within your template, and offer faster, price-competitive shipping options for orders that will deliver to a region with close proximity to your fulfillment warehouse.
Premium Shipping Options (1-Day and Two Day Shipping):
Sellers with extremely efficient operations may qualify for the Seller Fulfilled Prime program, which allows you to deliver directly to domestic Prime customers from their own warehouse. Products that qualify for Seller Fulfilled Prime will display the Prime badge. Sellers commit to fulfilling orders within the Two-Day Delivery window, at no additional charge for Prime Customers.
To qualify for Seller Fulfilled Prime, Sellers first must go through a Trial Period in order to demonstrate that they can consistently meet the strict requirements of the program. The Prime Badge will not display during the trial periods, but sellers are still required to process orders with zero handling time. After completing the Trial Period, Sellers must continue to maintain a strong shipping performance to maintain their status within the program. Below are the requirements for Seller Fulfilled Prime, found on this Help Page:
Ship over 99% of your orders on time
Have an order cancellation rate of less than 0.5%
Use Amazon Buy Shipping SErvices for at least 99% of orders
Have nationwide delivery coverage for all standard-size products
Use Ship Methods that support weekend delivery and pick up (Saturday or Sunday)
Meet Targets for 1-day and 2-day delivery promises
Seller Must agree to the Amazon Returns Policy
Allow for all customer service inquiries to be dealt with by Amazon
Amazon now offers Shipping Region Automation for One-Day and Two-Day Delivery, based on the delivery speeds of your preferred shipping services and warehouse location(s). Amazon will update these regions periodically to reflect the latest speeds of your shipping services. With shipping region automation enabled, you will not need to manually configure your delivery regions for Premium Shipping Options.
Apply your Shipping Template to Relevant ASINs:
When your merchant shipping templates are completed, the final step is to apply the shipping template to the relevant SKUs in your Catalog. Amazon allows you to assign SKUs to shipping templates in a few different ways.:
Manually, using Manage Inventory:
In Manage Inventory, the shipping template name displays in the Price Column for each SKU, underneath the price.
To Change the Template, select one or more of the SKUs you want to update. Then, click Actions in the Top-Left Corner. Select Change Shipping Template.
Use a Feed for more than 50 changes:
The Inventory Loader excel file has a column called merchant_shipping_group_name. Use this feed to assign SKUs to shipping templates.
Use the Manage SFP Page
If you participate in the Seller Fulfilled Prime (SFP) program, visit the Manage SFP page found under Inventory in the main Seller Central navigation.
Click on Enroll Items to Seller Fulfilled Prime tab
On this page, you can select one of the following options:
Change the shipping template to a Prime template at the SKU level.
Select the SKUs you want to assign to the Prime template, and then select Prime template from the Change shipping template on the # of the selected drop-down menu.
Conclusion
Trying to figure out how to create a merchant shipping template can seem like a daunting task, but it is worth it to the end Amazon customers as they will have clear expectations of the cost of shipping and how long it will take to receive the products. Fast and reliable shipping is a minimum expectation that customers hold. As a seller, there is no better time to dive into your operations to ensure that you are offering the fastest, most cost-effective shipping options to your customers.
If you need help understanding the options that you have or want to learn how to create a merchant shipping template, I encourage you to reach out to Goat Consulting to have a conversation about this and the other services that we offer.