Is Amazon Seller Central, Vendor Central, or Both, Right for Your Business?
With over 50% of product searches now starting on Amazon, and over 62% percent of ecommerce dollars spent on Amazon, it is imperative that all businesses make Amazon a key component of your brand strategy.
However, selling on Amazon isn’t as easy as simply listing your products for sale. There are two paths to sell your products on Amazon’s marketplace, and depending on your business both can be great options. Understanding the benefits and challenges of these two options will go a long way towards determining the health and sustainability of your business.
What is Vendor Central?
Amazon Vendor Central is a program for selling your product to Amazon. Amazon determines the brands and products they will allow to sell via Vendor Central. When using Vendor Central the brand acts as a supplier to Amazon selling to them in bulk, and Amazon then owns and sells those products directly.
What is Seller Central?
Amazon Seller Central is the portal to Amazon Marketplace, used by brands, manufacturers and third-party sellers to market and sell their products to customers on Amazon’s marketplace. . Once sold, there are several ways to ship to the customer. You can ship the order, you can pay Amazon’s FBA (Fulfillment by Amazon) team to store your goods ship your orders for you, or work with a fulfillment partner.
|Vendor ||Seller |
|Sell your product on Amazon||Yes||Yes|
|Open to anyone||No||Yes|
|Brand controls pricing||Minimal||Yes|
|Amazon controls pricing||Yes||No|
|MAP policy adherence||No||Yes|
|Control of inventory levels||No||Yes|
|Access to Brand Registry||Yes||Yes|
|Payment terms||Net 30, 60, 90||Paid every 7-14 days, on goods sold|
|Customer service||Amazon handles returns and customer complaints||Brand is responsible for returns and customer complaints|
|Regulatory & Tax Compliance||Yes||No|
Benefits of Vendor Central
- Consumer Trust: Consumers seeing the “Ships From and Sold by Amazon” tag sometimes have more confidence and trust than a “Sold by Seller” tag on a product listing.
- Simplified Process: Vendor Central allows you to focus on fulfilling the purchase orders (POs) generated by Amazon. Typically, Amazon will send you PO’s twice a week on the same days depending on your arranged schedule with them. All customer service returns and questions are handled by Amazon
- Unique Product Review tool: For an additional cost, the Amazon Vine program is available to Vendor Central sellers and invites the most trusted reviewers on Amazon to post opinions about new and pre-release items to help customers make informed purchase decisions.
- Simplified Regulatory and Tax Compliance Process: Amazon is responsible for most import/export tax and compliance complexities. For brands selling internationally, this makes selling outside of the US much easier.
- Additional Amazon Sales Opportunities: For new programs like Prime Now and Prime Pantry, Amazon pulls from Vendor Central inventory. Currently, Prime Pantry and Prime Now only offer products supplied via Vendor Central accounts.
Challenges of Vendor Central
- Price Erosion: Since Amazon is buying the product from you, they control how it is priced and sold. They are not obligated to adhere to your brand’s Minimum Advertised Price Price (MAP) policy, and they’ll match the lowest price found.
- Complex and Unforeseen Chargebacks: There are multiple reasons for Amazon chargebacks—prepayment credits, marketing fees, transportation fees, and preparation violations on Amazon inbound items. Many of these chargebacks are not easily tracked, and it is extremely challenging to identify what caused the chargeback for dispute or process improvement purposes.
- Minimal Customer Data: You will have access to general geographic and demographic data, but you won’t have access to insightful granular data to help make future marketing and product decisions.
- Loss of Inventory Control: By only being allowed to send to Amazon what they have requested via PO, it minimizes your ability to plan for future sales booms. Additionally, Amazon may recondition and sell returns of varying quality that may not be in the best interest of your brand.
Benefits of Seller Central
- Granular Customer Insights: Seller Central gives you access to customer data such as hashed customer email addresses and geographic insights. While Amazon does not allow the use of this data for remarketing, you will gain a better understanding of where your customer is located and their buying habits.
- Product Pricing Control: Since you still own the product, you can maximize your profit margins by retaining full control of the price at which your product will sell.
- Access to Brand Registry: Amazon allows brands with registered trademarks to enroll in their Brand Registry program. This allows brands to protect their intellectual property and increases trust by providing customers with validation they are buying direct from the brand. Once in the program, Amazon works to help identify any content that is infringing on brands and products.
- Amazon Customer Support: Amazon Seller Support is a program available to all Amazon Seller Central customers; there is no comparable service for the Vendor Central program.
- Quick Payment: Seller Central sellers can expect payments on goods sold in 7-14 days. Vendor Central payments follow a more traditional payment model of net 30, 60, 90 days.
- Additional Branding Opportunities: If you are shipping your products, or working with an ecommerce logistics partner, there are additional branding opportunities (branded packages, informational inserts, samples, promos, etc.)
Challenges of Seller Central
- Fulfillment is Your Responsibility: With Seller Central you are responsible for storage, inventory planning, packing, and shipping. This is in addition to your Amazon inbound fee and commission. There are many fulfillment options from using FBA (Fulfillment by Amazon), working with a logistics partner, or a combination of both.
- Tax and Compliance Management: Unless you work with an additional partner, tax and regulatory compliance is something you will be responsible for.
- Minimal Support: While both platforms are self service, there is minimal customer support for users to navigate Amazon’s policies or complex systems.
With Whitebox’s experienced team of ecommerce sales and logistics experts, we’ll help determine which Amazon service is right for your business.
Reach out for your complimentary business analysis today.