Are you waiting for an invitation to join Amazon Vendor Central? Well, this article is just what you need to make an informed choice. It will help you in finding whether it’s worth making the switch from seller to vendor program.
The ways in which a seller interacts on central platforms with customers and Amazon are quite different. Switching from seller to vendor portal will turn your merchant status into a distributor. You will become a wholesale partner and start doing wholesale to Amazon.
Moreover, there will be a shift in your ability to control brand presence and content. Before we go further let's have a look at what these platforms offer. This article is about the USA. However, most of the things go same for Europe as well. Here you can learn more about Seller Central Europe.
What is Seller Central?
It's a web interface for merchants and brands. It's used to promote and sell items directly to Amazon customers. You become a third party seller by using this type of account. Third party sellers have different options with which they can manage their virtual storefront.
Amazon offers a pay-as-you-go scheme for individual sellers. For sellers with high volume, PRO merchant option is available. A pro merchant seller can also opt for Fulfillment By Amazon (FBA). In FBA, Amazon takes care of shipping, returns, and customer care.
What is Vendor Central?
It is a web portal on Amazon used by manufacturers and distributors. It makes you the first-party seller. You basically are a supplier distributing in bulk to Amazon. You can become a vendor only by invitation. It's easy to identify a company selling through this system by the phrase “ships from and sold by Amazon.com”. That can attract thousands of customers to your products.
Amazon Vendor Express vs Seller Central: What’s the Difference between Both?
Here's a comparison of the differences between a seller and vendor account. Pros and cons of both options are also mentioned below.
Seller Accounts Features
- Anyone can sell
- Control over listings and inventory shipments
- Quick payment
- More control over inventory and prices
- Doesn’t allow A+ content
- Potential for higher margins
Vendor Accounts Features
- Invite only
- Standard payment terms
- Less control over prices
- Allows A+ content
- Warehouse should be in the USA
- Potential for larger volume
- Access to AMS, AMG, and other promotions
- Amazon Vine Program, Subscribe & Save, and other marketing services.
Vendor Account Pros
There's so much benefit in ensuring that consumers have confidence in your product. That's something that you effortlessly get when you sell as a first-party through this program. It gives you the stamp of approval. Buyers start believing that these products are sold by Amazon and not you.
The vendorcentral account offers various promotional programs like Subscribe & Save. You can participate in all of them when you sell through this account. You also become eligible for Amazon Vine. There your product is used and judged by the best reviewers. All of this happens way before your product hits the shelves.
It goes without saying that buyers always value feedback from other buyers. What reviews say about your product has a huge impact on customers. User-generated content now has much more impact than traditional advertisements.
When you use this program you will get enhanced content known as A+ content. This content is more than you would usually get in the ordinary product description. With superb content, you also get scannable texts and detailed product pages. They define the products further in addition to product images. You can also utilize comparison charts. It's highly likely that Vendor Central Amazon increases your profit margin.
Simplified Model of Business
It's much simpler to do business via vendor account as compared to the seller one. The primary focus of vendors is to fill bills, orders and steer clear of chargebacks. On contrary, sellers will have all the responsibility of taxation liabilities, lost inventory and sales reconciliation.
Vendor Account Cons
Seller Portal has very robust analytics capabilities. The analytics helps third-party sellers to forecast demand. You've to purchase a premium package for analytics reports for a similar experience on vendor account. You also need to verify with your Amazon buyer before you can make the transition. The reason's that option to buy the premium analytics reports isn't a guarantee.
Joining this vendor program is an exclusive matter. You can only be a part of it if Amazon invites you. If you're not invited to become a supplier then you simply can't use it. You can request Amazon to send you an invitation. However, there's no guarantee you will ever receive it.
The use of vendorcentral amazon com means that you are a supplier. This puts a huge responsibility on your shoulder. The reason's that you have to supply products to all Amazon warehouses throughout the United States. It demands you to be well coordinated. Amazon will also apply storage fees if your products occupy their shelves for too long.
No Control over Pricing
Amazon will not always follow Minimum Advertised Price (MAP) guidelines defined by the manufacturers. It's probably one of the biggest downsides of Vendor Central account. Amazon always has the right to make changes in the retail pricing. They can do it whenever they want based on internal data.
Amazon has established strict and specific guidelines for filling purchase orders. Those vendors who could not efficiently fill orders might end up paying huge chargebacks.
Lack of Customer Service Control
You're dependent upon customer service of Amazon when it comes to vendor accounts. If there's an issue with quality control or shipping, you can't contact the customer to clarify things. Similarly, it can hurt your business if a buyer's not satisfied with customer service of Amazon.
Seller Account Pros
Detailed Business Reports
The Seller Central users have an extremely rich and interactive dashboard. It allows its users to track numerous metrics like conversion rates, traffic, and sales. Currently, conversion and traffic rates are currently not accessible by vendors. These business reports and data could assist you in multiple ways.
These reports can help you identify new opportunities and sales trends. Plus you can also analyze negative feedback and refunds. You can study all these metrics in different time ranges. These helpful tools can assist you in attracting millions of new customers. You can significantly grow your business through them.
It's an amazing service offered by Amazon. You can use it to maximize Amazon's customer service and fulfillment capabilities. FBA lets Amazon send products to the Fulfillment Centers of Amazon to be stocked up and later fulfilled to buyers.
Amazon offers returns and customer services for the FBA products as well. FBA program also makes the products Prime Eligible. As result, your products become eligible for free shipping to the Amazon Prime buyers.
The fact that makes this particular point so crucial is that generally Prime buyers spend significantly more as compared to non-Prime buyers. It makes it a crucial point to consider. Plus, so many buyers select “prime only products” filter while exploring different items. The non-FBA users have to take care of their fulfillment, storage, customer service and returns.
Subscribe and Save
This feature of FBA lets buyers purchase eligible items at a discounted rate via subscription programs. Multiple categories support Subscribe Save feature. It's a fantastic option for those products which people purchase often. It eventually lets brands develop a greater level of loyalty with their customers.
Control over Unauthorized Lists
Oftenly, the manufacturers somehow find out the lists of their retail partners. As result, they start selling older versions of their items without permission. These listings have typically limited images and content. The only method to control such unauthorized lists is through Amazon sellers central account.
If you have a seller account then you will receive your payments biweekly. It provides a considerable amount of cash on hand to conduct business. Additionally, you will always know exactly when your payments will arrive.
Prices Can Be Controlled
You have the control over the retail pricing. It means that you can maintain retail prices for other channel members too. It is also possible to sustain prices with your competitors to stay in the game.
Seller Account Cons
Fulfillment and shipping costs hurt the individual or pro seller's business. These costs limit their capability to trade low-priced products on Amazon. Fulfillment and shipping charges might look insignificant to some people. However, that is not true. Those seemingly small costs start making a huge difference. This is true especially when you deal with products in bulk offering low margin.
Anyone who has inventory could be a 3rd party seller. This makes Amazon an extremely competitive platform. Price wars for the Buy Box can begin anytime which significantly decreases the profits. In fact, you can be Amazon's direct competitor by selling same items as they do.
Considerable Investment of Energy and Time
Amazon vendor portal relatively offers a little relief. Whereas marketplace seller account demands more hard work, attention and time to be successful. Selling on Amazon and making reasonable money isn't child’s play. From order fulfillment to pricing strategy and all other elements that come in between require effort. You must be energetic, capable and persistent to handle all aspects of the business.
Amazon FBA vs Vendor Central: What is the best option for you
As we can see, Seller Central users have a wider choice of features. So if you start selling on Amazon or running a small company, then this option is much better for you.
In turn, if you manage a manufacturing or distributing company, it is better to become a Vendor Central partner. This will provide you with much more marketing opportunities, but you will have to face logistical challenges and poor customer service. Also, you’ll have to wait until you get your money from Amazon. The choice is yours.