Are your products selling like hotcakes on Amazon? Has an Amazon buyer contacted you about selling via Vendor Central? Are you a frustrated vendor looking to make the switch to Seller Central?
We put together this article to outline the strengths and weaknesses of both seller and vendor central and to help you decide if you should have one, the other, or even both.
Which “Central” Should You Use?
The fundamental difference between Vendor Central and Seller Central is who will be selling your products. With Vendor Central, Amazon’s retail team buys and resells your products to their customers.
With Seller Central, you are selling directly to Amazon’s customers. There are significant differences between the two, so it’s important to fully understand the potential opportunities and drawbacks with each.
Before getting into the nitty-gritty, let’s define Amazon Vendor Central and Amazon Seller Central and give an overview of what each offers.
What Is Seller Central?
Amazon Seller Central is the web interface used by brands and merchants to market and sells their products directly to Amazon’s customers. If you have a Seller Central account, you’re considered a marketplace or third-party seller.
As a marketplace seller, you have two options for fulfilling orders you receive from Amazon’s customers. You can handle the shipping, customer service, and returns for each individual order yourself or you can allow Amazon to handle this for you by enrolling your products in the Fulfilled by Amazon or “FBA” program.
Some brands also use Seller Central as a tool to control the messaging of products not being sold via Vendor Central.
“Unless brands have absolute control over their supply chain, oftentimes they will discover their products being listed and sold on Amazon by unknown sellers. Having a Seller Central account is a great way to control the messaging of those products,” says Wes Grudzien, founder of Ezonomy.
What Is Vendor Central?
Amazon Vendor Central is the web interface used by manufacturers and distributors. If you sell via Vendor Central, you’re called a first-party seller. You’re acting as a supplier, selling in bulk to Amazon. Registration on Vendor Central is by invitation only.
A tell-tale sign that a company is selling through Vendor Central is the phrase “ships from and sold by Amazon.com.”
The Short List
Here’s a side-by-side comparison of the differences between having a Vendor Central and a Seller Central account:
- Open to anyone
- Sell directly to Amazon’s customers
- Flexible logistical options
- Quick payment terms
- Brand controls retail pricing
- Limited advertising options
- Complex sales process
- Enhanced Brand Content
- Invite only
- Sell to Amazon
- Fixed logistical options
- Traditional payment terms
- Amazon controls retail pricing
- Multiple advertising options
- Traditional sales process
- A+ content
Amazon Vendor Central Pros
Having your products sold as a first-party seller through Vendor Central means that, as far as shoppers are concerned, your product is being “sold by Amazon.” That seal of approval can provide a boost in consumer confidence that you don’t have as a third-party merchant.
Expanded Advertising Opportunities
Amazon Marketing Services (AMS) gives brands a powerful tool with multiple options for getting their products in front of shoppers. AMS allows vendors to drive demand with keyword-targeted ad campaigns designed to increase traffic to Amazon product pages. While both sellers and vendors have access to AMS, Vendor Central users have more robust options when it comes to running AMS ad campaigns.
Strategically managing campaigns and tying keywords into product page content is crucial for success. Across all content26 Amazon advertising campaigns, we’ve decreased our clients’ average cost per click by 19%. In addition, we’ve seen a more than 2x increase in return on ad spend. You can read more about Amazon’s pay-per-click service in our Definitive Guide to Amazon Marketing Services.
Simplified Business Model
The process of “doing business” with Amazon is simpler through Vendor Central than through Seller Central. As a vendor, your primary focus is on filling purchase orders, billing, and avoiding chargebacks. As a seller, especially utilizing FBA, you will be responsible for sales reconciliation, lost inventory, and taxation liabilities.
A+ Content and Other Marketing Tools
If you’re selling through Vendor Central Amazon offers vendor the option to create enhanced content via Amazon A+ Detail Pages. You also have the ability to participate in promotional programs such as Subscribe & Save (Amazon’s subscription service) and Amazon Vine, in which your product is sent to top reviewers before it ever hits the shelves. Consumers value what other consumers have to say far more than they do advertisements, so user-generated content can translate into a sales boost.
Amazon Vendor Central Cons
Amazon does not strictly follow the Minimum Advertised Pricing (MAP) guidelines from manufacturers. Amazon can and will adjust retail pricing at any time based on internal data.
Amazon has very specific and rigid guidelines for filling their purchase orders. Vendors that struggle with maintaining stock and/or quickly fulfilling orders open themselves up to significant chargebacks.
Amazon Seller Central Pros
Seller Central provides you with significant amounts of consumer data at no charge. As a seller, you have access to Amazon customer data that can be used for a multiple of purposes. While it is strictly prohibited to remarket to Amazon’s customers, that data can be used to better understand who is buying which products and where.
As the seller, you have the ability to control retail pricing so you are able to maintain established retail pricing for other channel partners. Also, you are able to automatically match your competitor’s pricing to stay competitive.
Often, manufacturers discover that their retail partners and/or unknown 3rd Party sellers list and sell bundles or older versions of their products without consent. Typically these listings have limited content and images. The only way to control these unauthorized listings is through a Seller Central account that has been enrolled in Amazon’s brand registry program.
Amazon Seller Central Cons
Often times the shipping and/or fulfillment costs limit your ability to sell low-priced items on Amazon. At the time of this article being written, the minimum fulfillment charge for non-media FBA items is $2.41, not including Amazon’s commission.
Studies have shown that items “Ships from and sold by Amazon.com” consistently outsell products offered via FBA or “Shipped and Sold by 3P Seller” Also if other 3P sellers were to list and sell against you via FBA, a significant percentage of total sales would be lost to those sellers. This is especially critical if you are attempting to use Amazon’s Sponsored Product Ad Tool. Your ads will only appear if you are the seller in the buy box.
Why Your Decision Matters
“It may be hard to fathom, but over 50% of all online shoppers now use Amazon as the first website they visit when making buying decisions. If brands haven’t created a strategy to reach these shoppers, they’re missing out on a major piece of the ecommerce market. In many ways, Amazon is more important than Google,” notes Ezonomy founder Wes Grudzien.
It’s critical that you create a marketing strategy specific to Amazon. At content26, we are biased towards Vendor Central as it allows our clients to take full advantage of Amazon’s powerful marketing tools such as Amazon Marketing Services and A+ content. Read more about our work with Amazon vendors.
Have you dealt with other pros or cons while selling via Vendor Central? Share your thoughts in a comment or send us a tweet.
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Editor’s note: This post was originally published on 5/25/2014. For this update, we made major updates and added a link or two. Content26 wants to thank Ezonomy founder Wes Grudzien for his extensive contributions to this post.