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What is Amazon Fresh?

by: Power Digital May 10, 2021

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For many years, grocery delivery was a luxury that only a small portion of people enjoyed. The COVID-19 pandemic normalized this once-niche service, along with Zoom happy hours, Tiger King, and baking sourdough bread at home.

In 2020 alone, 21% of Americans shifted to shopping for groceries online.¹ Even as the need for social distance wanes, many people have become accustomed to the convenience of ordering their groceries online.

To that end, one of the leading grocery delivery services is Amazon Fresh. Launched in 2007, this service is available to Amazon Prime members in a growing number of locations. Companies that offer Amazon marketing services are also looking to include this in their marketing strategies.

If you sell grocery items, you may be wondering how to get your products on Amazon Fresh. Understanding what Amazon Pay is and joining Amazon Launchpad may help you.

But, if you want to know more, read on below. We’ll answer all of your Amazon Fresh questions and explain exactly how this service works.

How Does Amazon Fresh Work?

Amazon’s rapidly-growing grocery delivery service is simple and easy to use. An Amazon Prime member can:

Shop – Amazon Fresh customers enjoy unparalleled convenience throughout their grocery shopping experience. They can search for their desired products on the Amazon app, their computer, mobile device, or even their voice-activated Alexa. Knowing how to use Amazon coupons to entice more customers will help you know what products to put out.
Checkout – Once an Amazon Fresh customer has filled their online shopping cart, it’s time to check out. At checkout, they’ll be prompted to provide their delivery address, desired delivery date, and 2-hour delivery window. They can also select any preferred substitutions for items that may be out of stock.

Amazon Prime members enjoy free shipping on all orders over $35. For orders under $35, shipping is usually just $4.99. However, if a shopper requires expedited delivery, the delivery fee may cost up to $9.99.

Depending on the time that the order is placed, same-day delivery may or may not be available. If it isn’t, next-day delivery typically features several different 2-hour window options throughout the day.

Delivery – Once an order is placed, a trained Amazon shopper will look for the items in-store, make any necessary substitutions, and deliver the groceries within the selected delivery window.

Do you know what Amazon Logistics is? It is Amazon’s own delivery service and this is why Amazon Fresh customers can track their delivery by GPS. They’ll also receive a notification when it’s close by.

To preserve perishable items, Amazon Fresh packages come in temperature-controlled packaging. This way, shoppers can receive a delivery on their doorstep while they’re away from home. Once the groceries have been delivered, customers can also rate their shopper and Amazon delivery experience.

Grocery delivery services, like Amazon Fresh, have made the chore of grocery shopping more convenient and time-efficient than ever before. Thus, it’s no surprise that Amazon Fresh has become one of Amazon’s fastest-growing services.

Amazon Fresh Product Offerings

Unlike Amazon’s general marketplace, Amazon Fresh allows perishable items to be sold. In fact, you can find just about everything you would find at a regular grocery store, including over 500,000 items from the following categories:²

Fresh produce
Dairy
Meat
Seafood
Bread
Snacks
Pre-prepared food
Beverages
Alcohol
Locally-grown items
Cosmetics and skincare
Hygiene products
Baby products
Toiletries

Ever since Amazon’s partnership with Whole Foods, shoppers can also find the specialty brands they love from Whole Foods directly on Amazon Fresh.

Where is Amazon Fresh Delivery Available?

Amazon Fresh currently services the following metro areas:

Atlanta
Baltimore
Boston
Chicago
Dallas
Denver
Houston
Indianapolis
Las Vegas
Los Angeles
Miami
Minneapolis
New York
Philadelphia
Phoenix
San Diego
San Francisco
Seattle
Washington, D.C.

As time goes on, this list is expected to expand even further.

Amazon has also announced the opening of their first Amazon Fresh grocery store.³ Located in California’s Woodland Hills, this grocery store is open to both in-person and online shoppers. It carries a wide range of national brands, local brands, Amazon-exclusive items, and even Whole Foods’ 365 product line.

How to Sell on Amazon Fresh

Unfortunately, Amazon stopped allowing third-party vendors to sell on Amazon Fresh back in 2018.⁴ Many people speculate that this change occurred in response to Amazon’s partnership with Whole Foods.

Despite this change, Amazon occasionally invites third-party sellers to sell on the platform. If you’re eager to sell on Amazon Fresh as a third-party seller, you can apply for consideration. However, the odds of being accepted are generally quite slim.

A roundabout way to get your products listed on this coveted online marketplace is to get Whole Foods to carry them. All Whole Foods products are automatically eligible for Amazon Fresh, due to their partnership.

Amazon Fresh Sponsored Products

If you get lucky enough to sell on Amazon Fresh, either by invite or by carrying a Whole Foods brand, you can now promote your products using Sponsored Product ads. These ads can boost your visibility with Amazon Fresh customers and help your products stand out.

How to Sell Groceries on Amazon’s General Marketplace

Even if you can’t sell your grocery products on Amazon Fresh, you may still be able to sell them on Amazon’s regular marketplace.

Selling groceries on Amazon can open you up to a vast online customer base, enabling you to sell far beyond the limited shelf space of a physical grocery store. Additionally, Amazon’s general marketplace lets you sell your grocery products to all Amazon shoppers—not just Prime members.

Before you pursue this endeavor, it’s important to understand that Amazon has very strict restrictions for its grocery vendors.

Amazon Marketplace Grocery Vendor Approval

Before you can sell groceries on Amazon, you need to qualify for a professional selling account.

To get a professional selling account, you must submit valid invoices for your grocery products. You’ll also need to create a professional selling plan. Finally, you must meet the following Amazon account health metrics:

Order defect rate — Less than 1%
Pre-fulfillment cancel rate or cancellation rate — Less than 2.5%
Late shipment rate — Less than 4%

Once you’re a professional seller, you’ll get to pay a flat monthly Amazon fee of $39.99, rather than $0.99 per sale. You will also unlock a plethora of selling privileges that make it easier to sell in bulk.

Amazon Grocery Vendor Rules

Obtaining a professional selling account is just the first step to becoming an Amazon grocery vendor. Next, you’ll need to get familiar with all of Amazon’s rules for grocery vendors.

Here’s a brief rundown of some of Amazon’s grocery selling requirements.⁵ You must:

Properly prepare, seal, and package your products
Clearly state the weight, expiration date, allergens, ingredients, and dietary information for each product
List your manufacturer’s UPC
Ship items in dry ice to maintain their freshness
Ship with expedited shipping
Only sell items that are in new condition
Only sell items that have a shelf life of 90 days or longer
Remove items from your inventory 50 days before their expiration date
Adhere to all state and federal health requirements

These strict rules exist to protect the health and safety of Amazon’s customers. Amazon takes these rules seriously, especially because they can be held liable for harm caused by third-party seller grocery products.

Shipping and Labeling Requirements for Amazon Groceries

Grocery sellers on Amazon must also adhere to many shipping rules. For example, every shipment must clearly indicate:

The name and address of the shipper
The name of the person receiving the shipment
The name of the location where the product was grown
A statement describing the shipping contents

These rules are especially important if you ship your grocery items internationally, since U.S. Customs closely monitors all agricultural products that are shipped into the country. They’re tasked with the job of preventing invasive species from entering the country and enforcing all relevant tariffs and taxes.

Fulfillment Options For Amazon Groceries

As with all Amazon products, you can choose to use Fulfillment by Amazon (FBA) or Fulfilment by Merchant (FBM), also known as self-fulfillment.

If you use FBA for your grocery products, you must ensure that your items stay cold enough while they’re transported to an FBA center. Amazon will take care of the rest once your packages arrive at their facility.

If you use self-fulfillment instead, you’ll need to find a long-term cold storage facility network on your own. It must be licensed in your state and meet all of your state health department’s standards.

Fees for Amazon Groceries

The fee structure for products in the grocery category is slightly different than other Amazon categories. In the past, Amazon charged a flat rate of 15% for all grocery sales. However, Amazon changed its fee structure to incentivize more grocery sellers to stay on the platform.⁶

These days, the grocery fee structure is as follows:

Products that cost less than $15 — 8% fee
Products that cost $15 or more — 15% fee

Maximize Your Grocery Sales on Amazon

Now you know the ins and outs of Amazon Fresh, as well as an alternative way to sell groceries on the world’s largest e-commerce platform. While qualifying for Amazon grocery selling privileges is an involved process, it’s well worth it, especially as their grocery delivery services continue to grow in popularity.

For more helpful Amazon marketing tips and tricks, as well as data-driven Amazon marketing services, reach out to Power Digital today.

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