Amazon’s Premium Shipping program has always driven better conversion rates, improved Buy Box share, and happier customers. But come June 29, 2025, Amazon is rolling out sweeping changes to Premium Shipping performance requirements, and they’re not kidding around. If you’re an ecommerce pro, brand operator, logistics expert, or retail strategist, buckle up. Here’s everything you need to know, served in a conversational style, with a dash of candor, and a sprinkle of “keep-your-cool” honesty.

From Monthly Roll-Ups to Weekly Check-Ins

Let’s cut to the chase: under the old system, you needed a 97% on-time delivery rate (OTDR) over a rolling 30-day window to keep that Premium Shipping eligibility. Amazon looked at your performance once a month, sent one warning if OTDR dipped below 97%, and gave you until the next month to fix it. Easy enough—if you had a random bad week, you could smooth it out with stellar performance the rest of the month.

Starting June 29, though, those monthly buffers disappear. Amazon will track OTDR on a weekly basis, from Sunday through Saturday, and drop any Seller Fulfilled Prime (SFP) orders from that calculation. If your OTDR for Premium Shipping falls below the new minimum, 93.5%, you’ll get your first email warning. Do it again next week, and you’ll receive a second warning. Miss the same threshold three times within four consecutive weeks, and you’re out of Premium Shipping until you earn it back.

Why 93.5%? Amazon’s rationale is that they want customers to experience the same reliability they’ve come to expect from the Prime program. Dropping the requirement from 97% to 93.5% might seem like a concession, but trust me, hitting 93.5% every single week is not easy when you’re dealing with carriers that are out of your direct control.

Why This Matters (and Why It’s Tougher Than It Sounds)

No More “Average” Weeks

Under the old model, you could have one sloppy week at, say, 94%, and then three spectacular weeks at 99%, and your overall 30-day OTDR would still be above 97%. Now, if that first week is below 93.5%, you’ll get dinged immediately. A single underperforming week can trigger a warning, and you can’t “erase” it with future weeks once that four-week window closes.

Carriers Need to Be in Your Back Pocket

Amazon explicitly calls out approved carriers like UPS, FedEx, USPS, and OnTrac. If a carrier misses scans, delays pickups, or delivers late, you’re on the hook. The OTDR calculation counts the percentage of orders that arrived on or before the promised “Deliver by” date. If your package is scanned late, or not scanned at all, Amazon assumes it’s going to be late unless an on-time delivery scan is received later. That’s why it’s more important than ever to monitor each carrier’s performance, review their “Last-Mile Delivery” scorecards, and swap out underperformers.

Shipping Settings Automation & OTDR-Protected Labels

Good news: Amazon is offering tools to help you hit your weekly targets. Shipping Settings Automation (SSA) will calculate transit times automatically so your “Deliver by” promises match real-world carrier performance. You still need to set accurate handling times, but SSA can help avoid accidentally over-promising.

Then there’s OTDR protection: if you enable SSA and purchase an OTDR-Protected label through Amazon Buy Shipping, Amazon won’t penalize you for late deliveries as long as the delay is due to factors outside your control. It’s essentially a safety net—except it only applies if you do everything else right (set your handling time properly, buy the right label, and ship on time).

What Sellers Must Do Right Now

1. Audit Your Carriers

• Pull up your Carrier Scorecard in Seller Central each Monday morning.
• Look for patterns: Who’s got the slowest last-mile scans?
• Drop carriers that regularly clock in under 95% weekly on-time scans, because once you hit 93.5%, there’s zero wiggle room.

2. Enable SSA on Every Shipping Template

• Navigate to Shipping Settings → Edit Template → Toggle on Shipping Settings Automation.
• Let Amazon calculate transit times based on carrier data. If you don’t do this, you’re basically flying blind and promising delivery dates you can’t reliably meet.

3. Purchase OTDR-Protected Labels

• Go to Manage Orders → Buy Shipping and look for the shield icon indicating “OTDR Protected.”
• If you use an external tool like Cahoot, make sure it’s integrated and configured to buy the correct labels.

4. Track Your OTDR Like a Hawk

• Check your Account Health → Shipping Performance → On-Time Delivery Rate view, filtered to the “Last 7 Days.”
• Log it in a simple spreadsheet or dashboard; if you’re at 95% on Thursday but have a big FedEx hiccup on Friday, you might dip under 93.5% by Saturday.

5. Prepare an Appeal Template

• If you get that dreaded second warning email, you have two weeks to appeal.
• Your appeal should include:
  • Specific orders that caused the miss (order IDs, promised vs. actual dates).
  • Evidence that you used SSA and OTDR-Protected labels (screenshots help).
  • Steps you’re taking to prevent a repeat (e.g., switching carriers, adjusting handling times).

The Ripple Effects on Your Business

Margin Compression vs. Service Reliability

Yes, spending more on premium carriers or buying OTDR-protected labels adds cost. But losing Premium Shipping can crater your conversion rate, tank your Buy Box percentage, and even affect organic search ranking. You have to run the numbers: maybe offering fewer SKUs with Premium Shipping is cheaper in the long run than risking weekly OTDR failures that affect your sales on your highest-performing SKUs (by being kicked out of the program).

Operations & Inventory Juggling Acts

Keeping enough stock in the “right” warehouses, so carriers aren’t shipping from the opposite coast, matters more than ever. If you sell nationally, you may need multiple fulfillment locations (a 3PL or micro-fulfillment center network). Staggering your replenishment orders (especially around holidays) can prevent stockouts that force you to oversell and then ship late.

Small Sellers vs. Big Sellers

Large brands with multi-warehouse setups and teams dedicated to carrier management can adjust more fluidly. If you’re a one-person operation fulfilling out of your garage, you’ll need to be extra strategic—maybe select just two to three proven carriers and ship as many orders as possible the same day you pick them. The bar is higher now, and patience for shipping errors is slim.

A Few FAQs to Keep You Sane

Q: What happens if a hurricane or blizzard slows down my carrier?
A: If Amazon deems it a “major disruption event,” late deliveries in that region won’t count against your OTDR. But you still need SSA + OTDR-protected labels before the delay. Don’t wait for your messages to start flooding; enable those tools now.

Q: Will this affect Seller Fulfilled Prime?
A: Sort of. SFP has its own stricter OTDR requirements, also on a weekly cadence, but it’s evaluated separately. Just remember, your SFP and Premium Shipping OTDRs are on parallel tracks; a slip in one doesn’t automatically tank the other, but it’s best to nail both.

Q: Can I regain Premium Shipping status after removal?
A: Yes, but you must meet all OTDR requirements for four consecutive weeks after your third infraction (without another miss). It’s basically a “clean slate” window: stay above 93.5% each week for four weeks, and Amazon resets your eligibility for that specific requirement.

Final Thoughts: Embrace the Change (or Get Left Behind)

Amazon’s shift from a 30-day OTDR roll-up to a 7-day weekly check is a clear message: if you want to hang with Prime-level sellers, you need rock-solid operational consistency and carrier partnerships. There’s no “coasting” on the back of a stellar month anymore; you have to nail every single week.

Yes, the change feels daunting. Your margins may squeeze, and your team (even if it’s a team of one) will need to revamp processes. But savvy ecommerce pros know adversity breeds opportunity. Rethink your shipping playbook:

• Lean into SSA and OTDR-protected labels.
• Cultivate trusted carrier relationships (and ditch underperformers ASAP).
• Monitor your weekly OTDR like your P&L depends on it (spoiler: it does).
• Build redundancy, FBA hybrid, multi-warehouse, or strategic 3PL partnerships.

Master these moves, and you won’t merely survive—you’ll thrive. Happy selling, and may your weekly OTDR always stay north of 93.5%.

Citations

• Amazon Seller Central – Upcoming changes to Premium Shipping
• Amazon Seller Central – Frequently asked questions about on-time delivery rate (OTDR)

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

Amazon used to feel like a never-ending battlefield: millions of sellers duking it out for every eyeball. Fast-forward to 2025, and things have quietly shifted. Yes, a ton of new sellers keep signing up—roughly a million a year—but the number of active sellers (those getting at least one review in the past year) has actually fallen from about 2.4 million in 2021 to under 1.9 million in 2025. That’s a 20% drop, and it means there’s more traffic up for grabs per seller. In plain English, the average Amazon seller now gets nearly 31% more visits than four years ago. Cue the confetti for anyone still standing, and some serious sticker shock for those just starting out.

Why the Dip in Active Sellers Matters

Let’s unpack that number: Amazon’s overall traffic has stayed roughly level since 2021, clocking in at around 5 billion visits per month across its global network. But active sellers declined from 2.4 million to 1.9 million between 2021 and 2025. Divide the same or slightly higher traffic by fewer storefronts, and voilà, monthly visits per seller climbed from 2,162 to 2,837. In other words, if you’re still in the game, you’ve got about 31% more potential buyer eyeballs on your listings than your counterparts did a few years back.

That traffic bump isn’t just academic. With Amazon’s revenue surging 36% (from $470 billion in 2021 to $638 billion in 2024), it’s clear the pie is growing even as some sellers fall out. Third‐party sellers, who already sold 56% of units in Q4 2021, pushed their share up to 62% by Q4 2024. Translation: More of a bigger pie is yours for the taking if you can navigate the challenges.

Why Sellers Are Fading Out

Okay, so why are fewer “active sellers” sticking around? A few big reasons: rising fees, logistical headaches, and cutthroat price wars.

• Amazon’s Fees Have Ballooned
  • In some categories, referral, FBA pick‐and‐pack, and storage fees now gobble up over 50% of a product’s list price.
  • Monthly or seasonal storage surcharges and random “reclassification fees” can make it feel like Amazon’s charging you just for breathing.
  • The result? Margin erosion that many newcomers can’t stomach.
• Inventory & Case-Management Headaches
  • FBA is a blessing until your inventory gets stranded, buried under storage‐fee surcharges, or stuck in removal limbo. Solving these requires hours of back-and-forth with Seller Support.
  • Switching to FBM (Fulfilled by Merchant) isn’t a slam dunk either; sourcing reliable carriers, managing returns, and weathering holiday shipping bottlenecks add a new layer of complexity.
• Regulatory & Tariff Unknowns
  • Tariff rates have been fluctuating unpredictably, particularly for goods from China or certain apparel categories. A 10% hike overnight can wreck your COGS (cost of goods sold) if you’re unprepared.
  • Sales tax laws and cross-border customs rules shift every few quarters. Small sellers risk penalties if they slip up.
• Chinese Seller Dominance
  • Chinese merchants make up over half of the top-performing Amazon accounts, often undercutting U.S. sellers with razor-thin margins. It’s tough to compete on price when factory-direct sellers list at rock-bottom rates.

Put those together, and it explains why many hopeful sellers register, list a few products… and then disappear. In fact, more than 60% of the top 10,000 Amazon sellers launched before 2019, proving that experience and staying power are huge advantages.

Why the U.S. Marketplace Still Reigns Supreme

If you’re deciding where to list, the U.S. marketplace is still the gold standard. Sure, places like Saudi Arabia boast 8,228 visits per seller, and South Africa is close behind at 8,065. But those markets simply don’t have the total volume or category breadth of Amazon.com. In the U.S., a niche term like “sourdough starter jar” gets roughly 26,766 monthly searches, compared to 179 in Australia or zero in Saudi Arabia. In other words, niches thrive stateside in a way they can’t elsewhere.

Even better: 73% of U.S. sellers who joined in the past year hit their first sale within 12 months. That’s substantially higher than Germany (38%), the U.K. (32%), or Canada (16%). For new sellers looking for quick validation, the U.S. simply offers the best odds.

Challenges to Confront Head-On

More traffic is great, but it doesn’t magically overcome the hurdles. Here’s what you’ll face if you jump into Amazon today:

• Margin Erosion: Even with extra visits, if your fees and COGS leave you with negligible profit per unit, those extra eyeballs won’t matter. Carve out a robust pricing model, know your true landed cost—including tariffs, shipping, Amazon fees, and PPC.
• Inventory Planning: Sell-through rates matter. Overstocking triggers costly storage fees; understocking loses you the Buy Box and lets competitors swoop in. Sophisticated 3PL integrations or tools like Forecastly can help you thread the needle.
• Competitive Pricing & Buy Box Battles: Repricers can help, but they’re not magic. When Chinese sellers aggressively undercut, you risk starting a race to the bottom. Focus on unique value propositions, bundling, subscription offers, or enhanced branding to stand out.
• Regulatory Compliance: Keep up with tariff updates. For instance, electronics gear imported from Asia might incur new duties under a 2025 trade ruling—know it before it blindsides your margin.
• Account Health Vigilance: A single A-to-Z claim or policy violation can drop your seller rating. If you rely on Amazon for 80% of your sales, a suspension can be devastating. Build redundancies: own a Shopify store or diversify into Walmart Marketplace.

How to Capture Your Piece of the (Growing) Pie

1. Lean Into Niche Categories: If you’re selling something ultra-specialized—think artisan beard balm, eco-friendly pet toys, or limited-edition kitchen gadgets—your “competition” pool is smaller. Use tools like Helium 10 to spot emerging micro-niches before they catch fire.

2. Optimize Listings with SEO & Enhanced Content: Keywords matter, but so does conversion. High-res images, 360-degree product videos, and A+ content can take your listing from meh to must-buy. When you’ve got 30% more visits, conversion-rate improvement is pure gold.

3. Strategic PPC & DSP Budgets: With that extra traffic cushion, you might discover that CPCs (cost per click) in your niche are actually lower now due to lighter competition. Run a lean Sponsored Products campaign; if your listing’s solid, you can turn that paid traffic into organic momentum.

4. Leverage Prime & Subscription Models: Products eligible for Prime enjoy a higher click-through rate. If the margin allows, consider bundling or small subscription programs to lock in recurring revenue rather than one-off purchases.

5. Diversify Fulfillment Options: FBA is convenient, but a 3PL (third-party logistics company) hybrid or FBM can be more cost-effective once you hit a certain volume. Free two-day shipping is table stakes; just make sure your margins survive the shipping fees.

6. Plan for International Growth, But Don’t Rush: The data shows 69% of sellers stay confined to one marketplace. If you nail the U.S., expanding later to Canada or Mexico can be a logical next step. But don’t spread inventory too thin across 22+ marketplaces when your U.S. business still has growth levers to pull.

The Road Ahead

As Amazon’s marketplace matures, the landscape will keep shifting—new fees might pop up, algorithm tweaks could rearrange SERP rankings, and global trade winds will bring fresh tariff puzzles. But right now, a rare alignment exists: fewer active sellers, steady or growing buyer traffic, and a rising slice of third-party volume. For brands with grit, this means more opportunity if you’re willing to do the heavy lifting.

The parting advice? Amazon’s game has always been about endurance. Weather the headwinds, optimize your listings, master your costs, and don’t be afraid to lean into niche categories—and you might just ride this 30% traffic bump into the kind of scale that felt impossible a few years ago.

Is it crowded? Sure. Is it still worth it? For those who can adapt, absolutely.

Citations

• Marketplace Pulse: Amazon Is Less Competitive Than Four Years Ago
• Marketplace Pulse: U.S. Is Amazon’s Most Beginner-Friendly Marketplace
• Marketplace Pulse: 69% of Amazon Sellers Sell in Just One Marketplace

Written By:

Manish Chowdhary

Manish Chowdhary is the founder and CEO of Cahoot, the most comprehensive post-purchase suite for ecommerce brands. A serial entrepreneur and industry thought leader, Manish has decades of experience building technologies that simplify ecommerce logistics—from order fulfillment to returns. His insights help brands stay ahead of market shifts and operational challenges.

Starting June 29, 2025, Amazon is rolling out tighter performance guardrails for two of its marquee shipping programs: Seller Fulfilled Prime (SFP) and Premium Shipping. Seller Fulfilled Prime work refers to the process by which eligible third-party Sellers can fulfill Prime orders directly from their own warehouses, provided they meet Amazon’s strict performance requirements. For Sellers, these changes aren’t mere tweaks; they reshape how you qualify, stay in, and recover from hiccups in these programs. Below, we’ll walk through each key requirement as it stands today versus what you’ll need to hit after the effective date, with real-world examples to illustrate exactly what’s at stake. For a rundown of all program requirements, see the full Seller Fulfilled Prime Program and Premium Shipping policies.

Trial Enrollment & Graduation Windows for Seller Fulfilled Prime

Today:

• You can request a 30-day SFP trial any time.
• The SFP trial period lasts for 30 days and includes specific performance metrics that must be achieved to qualify for official enrollment in the program.
• Graduation from trial depends solely on meeting performance metrics during those 30 days.

After June 29:

• Three Trials Max per Year: You’ll be capped at 3 trial attempts in each calendar year. Any trial that begins before June 29, 2025 doesn’t count toward this limit.
• Quiet Periods Around Major Events: If your 30-day trial spans the 30 days leading up to Prime Days, Black Friday through Christmas, etc., you cannot graduate. This ensures Sellers are battle-tested before the busiest season.

Sellers must successfully complete the trial period by meeting specific performance requirements to gain access to Prime branding.

Why This Matters: Imagine you enroll in an SFP trial mid-October, aiming to graduate in time for Black Friday. Under the new rule, even flawless performance won’t earn you Prime status, you’ll have to re-enroll after the holidays. Plan your trials for quieter times (e.g., late January) to avoid losing a precious attempt.

Monthly Volume & Enrollment Requirements

Today:

• There’s no fixed minimum monthly SFP volume.
• If you miss on-time metrics, Amazon sends warning emails, but your enrollment status remains until metrics severely degrade.

After June 29:

• Minimum 100 SFP Shipments/Month: You must deliver at least 100 Prime-eligible packages each calendar month, spread reasonably across weeks, to maintain the Prime badge.
• Dynamic Order Limits: Fall below 100 (or cluster all shipments in one week), and Amazon will impose a reduced daily Prime order limit until you return to consistent volume.
• Exemption for Fix-Ups: If you get a second warning for missing any metric, you can pause Prime (no shipments) for a week to get your house in order, and that period won’t count against your enrollment.

Practical Example: You shipped 15 Prime packages in the first 3 weeks of May, then scrambled to ship 90+ in the final week. In June, you’ll wake up to find your Prime orders capped at a fraction of normal volume. Better to target 25–30 SFP orders per week and build in some slack.

Size-Tier Misclassification & Network Disruptions

Today:

• Listing ASINs in the wrong size tier might trigger warning emails, but rarely leads to immediate suspension. Misclassification can also result in higher storage fees, impacting overall profitability.
• Late deliveries during huge storms or carrier outages may or may not be excluded automatically.

After June 29:

• Strict Misclassification Guardrails: Repeatedly offering a product under the wrong size-tier can lead to blocking of SFP offers or Prime status suspension/revocation for those ASINs.
• Automatic OTDR Exclusions for Major Disruptions: Clearer language confirms that any late deliveries from Amazon-identified large-scale carrier or weather events are excluded from your OTDR automatically.

Scenario: You classify a product as having larger dimensions to qualify for the less strict performance requirements that apply to a larger size tier. After three such mistakes, Amazon silently blocks Prime on that ASIN. You’ll need to correct the tier and appeal to restore it—costly downtime.

Appeals Process Overhaul

Today:

• You have a sliding window to dispute removals, but timelines and submission limits are vague.

After June 29:

• 14-Day Filing Window: From the date you receive a notice (e.g., “Your SFP status is paused due to low OTDR”), you have 14 calendar days to open an appeal.
• 4-Day Response to Requests: If Amazon asks for more details, you have 4 days to reply, or your appeal is closed.
• Limit of 3 Appeals/Quarter: You can file up to 3 appeals per quarter (overturned appeals don’t count). Appeals require supporting data (order IDs, tracking numbers, ZIP codes, proof of carrier delays).

Why It’s Tougher: Say your OTDR dips because a regional carrier hub froze over two days. You’ll need to create a case including tracking scans, carrier advisories, and order logs quickly, or forfeit that appeal.

OTDR Protection via Amazon-Managed Shipping Tools

Today:

• If you use Amazon Buy Shipping and meet delivery cut-offs, late deliveries often still count against you unless you separately request exclusions.

After June 29:

• “OTDR Protected” Labels: If you enable Shipping Settings Automation in your Prime templates and purchase “OTDR Protected” labels through Amazon Buy Shipping, any late deliveries on Standard (for SFP) or Premium shipping won’t hurt your OTDR.
• Continued Exclusion of Major Disruptions: Same carve-out for large-scale network events.

Bottom Line: Automate shipping profiles and purchase labels using Buy Shipping API, and you effectively get “insurance” against minor late-delivery slips.

Premium Shipping Changes

Amazon’s Premium Shipping program (items promised in 1–3 business days) gets its own tightening:

Key Impact: Under the new cadence, a single bad week can put you on notice, and three such weeks in a month spells immediate removal from Premium Shipping. You’ll need more consistent performance throughout each month, not just a healthy 30-day aggregate. Sellers must successfully complete the new performance metrics to maintain their status in the Premium Shipping program.

Putting It All Together: A Seller’s Checklist

• Schedule Your SFP Trial Smartly: Avoid major sale seasons; plan for Q1.
• Lock Down 100+ Prime Shipments/Month: Automate your SFP orders to spread volume evenly across weeks.
• Clean Up Your ASIN Tiering: Audit listings for correct size tiers and package profiles.
• Enable Shipping Automation + Protected Labels: In Seller Central > Fulfillment Settings, turn on SFP/Premium templates and default to OTDR-protected labels.
• Monitor Weekly OTDR: Invest in an operations dashboard that can track your OTDR by week for both SFP and Premium orders.
• Prepare an Appeals Kit: Create a template for submitting an appeal with sections for order logs, tracking scans, and carrier advisories so you can file within 14 days. Cases created after 14 calendar days will not be considered.
• Build in Buffer for Disruptions: If a regional snowstorm hits, pre-notify Amazon to be considered for exemption from performance defects proactively. Consider outsourcing your SFP fulfillment to a distributed fulfillment network that organically solves for carrier network disruptions and ensures the highest performance metrics for continued program eligibility and enrollment.
• Understand SFP Program Requirements: Familiarize yourself with the stringent requirements of the SFP program and adapt to changing Amazon policies to maintain your SFP status.

Final Thoughts

These new Seller Fulfilled Prime (SFP) and Premium Shipping requirements underscore Amazon’s push for ultra-reliable, ultra-consistent delivery, a win for customers, and a heavier lift for Sellers. But by meeting these new standards, (whether independently or with the help of a distributed fulfillment network), Sellers can maintain access to Prime branding and the substantial customer base of Amazon Prime members, mitigating the risk to the sales opportunities afforded by the Amazon Seller Fulfilled Prime Program.

By understanding the before-and-after, planning trial timing, automating wherever possible (especially Prime shipping options), and building a rapid-response appeals process, you can not only stay enrolled in SFP and Premium Shipping programs but thrive in them.

Watch the Video

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.