Understanding Amazon’s Vendor and Seller Central Platforms Will Make You a Better Amazon Seller, Period!
What would you do if you were asked to choose between Amazon’s vendor central and seller central platforms?
In some ways, that’s not the right question to be asking.
Because very few Amazon sellers will ever find themselves in the position to have to choose one or the other.
As an Amazon seller, you don’t get to choose how you’ll sell on the Amazon marketplace. To sell with Vendor Central, you need to be specifically invited by Amazon.
In researching for this article, I found that most of the posts had written at length about how Amazon sellers in search of the Buy Box could move back and forth between the two.
My goal instead with this post is to help Amazon sellers understand that they can use a better appreciation of the differences between the two platforms to make better decisions wherever they’re selling.
Understanding the Truth About Amazon’s Selling Portals
That’s why, after an overview of the vendor and seller central platforms, the second part of this article will focus on a round table discussion between Amazon sellers, e-commerce experts and Helium 10 pros to help us understand how to take advantage of the two selling portal’s differences.
To get the discussion going, I asked each of our experts these five questions.
- What type of Amazon seller is most likely to benefit from a move to Vendor Central?
- What do you think the future is for the Vendor Central / Seller Central model?
- If you were offered an opportunity to sell through Vendor Central, would you accept? And in two sentences, why or why not?
- What’s the ONE benefit of Vendor central that you’d like to have on Seller Central?
- If you left Seller Central for Vendor Central, what’s the one benefit that you’d miss most?
Contributing to the discussion will be:
- Carlos Alvarez, a nine figure Amazon seller and CEO of Blue Bird Marketing Solutions, where his unique Amazon marketing strategies have given him the nickname, the Wizard of Amazon
- Vince Montero, a veteran e-commerce consultant and an Amazon advertising pro who was recently hand-picked to be the Product Manager of Helium 10’s new PPC tool, ADS
- Barcus Patty, a passionate advocate for Amazon sellers and Product Manager for our new landing page builder. Portals.
- Karyn Thomas, an Amazon listing optimization expert, co-founder of two 7-figure businesses and Helium 10’s Customer Advocate and Brand Evangelist
There’s a very good chance that you’ll never sell on Amazon’s Vendor Central platform.
Still, I think that you’ll find that looking over the shoulders of these experienced e-commerce pros and understanding the differences between the two platforms will help you to be better Amazon sellers, period.
In researching this post, I found a number of articles that did a very awkward balancing act that proposed an imaginary world where the benefits of Amazon’s two different selling portals were more or less equal.
That’s not really the case.
Why this Question Reminds Me a Little Bit About Exit Polling After the 2016 Election
Let’s talk about Amazon and e-commerce. Regardless of the topic of discussion, you can always find opposing viewpoints.
It’s a little bit like politics; Amazon sellers often have a significant amount of emotional investment in their opinions.
That’s putting it lightly.
That all changes when it comes down to the question of Amazon’s two different selling portals. On that subject, Amazon sellers are in agreement.
It really just came down to one question.
Why Would Anyone Want to Give Amazon More Control?
When I browsed through the questions posed by sellers on Amazon’s Seller Central message board, there was an avalanche of opinions that centered around sellers with an Amazon business, wondering (sometimes with colorful language), why would anyone want to give Amazon more power over your business than they already have.
But, like exit polling after the 2016 presidential election, people are not always honest about how they really feel. Certainly not as much as the people paying for the polling information would like.
Ultimately, it’s up to Amazon to decide that they want what you’re offering.
Here’s why some very smart Amazon sellers would take Amazon’s call.
First, What’s the Difference Between the Two?
Amazon’s customers probably won’t have any idea, what type of seller account has started the process. They’re just shopping for a product. Still, the biggest difference between Vendor Central and Seller Central is the simple question of who will be selling those products.
With Seller Central, you (probably using the Amazon Fulfillment Center) are selling directly to Amazon shoppers. As a brand owner or smaller vendor, it offers flexibility to manage the selling yourself. That includes everything from the inventory level, to the final retail price.
When an individual seller uses Vendor Central to sell on the marketplace, it’s Amazon that buys (often in larger “bulk” quantities) and resells your products to their customers.
Now, Amazon’s Vendor and Seller Central are Getting Closer
In the last few years, Amazon’s two platforms are moving towards each other both in terms of form and function.
After finding a solid product, step one for Amazon sellers is making sure that buyers are aware of what you have to offer. In the last year, the marketing tools that Amazon provides to vendors and sellers are becoming more like each other although they are given different names.
Amazon seems to be making an effort to eliminate the obvious benefits of one or the other selling platforms.
There are many experienced e-commerce sellers that have for some time now predicted that Amazon might merge the two selling platforms.
But for now, let’s talk about the differences so you can see which Amazon strategy is right for you.
Amazon’s Seller Central – This is What You Already Know
More than half of everything sold on Amazon originates from independent sellers using this platform.
Referred to as the third party seller model, if you’re a 3p seller (after paying a fee) you’re responsible for creating a product listing, setting up your own Amazon storefront and effectively becoming the retailer. Your business is managed through a portal called Seller Central.
Amazon’s Seller Central:
- Is open to anyone
- Sell directly to Amazon’s customers
- Control your own pricing structure
- Ship products yourself or use Fulfillment by Amazon (FBA)
- You’re responsible for advertising (design and cost)
- It’s up to you to decide what will sell (you have full control)
- Inventory management is up to you
If you’re a brand owner or vendor selling on Amazon now, Seller Central is almost certainly the platform that you’re using. It’s employed by everyone from popular brands like Apple and LEGO to market and sell their products directly to Amazon’s customers. Most are taking advantage of Fulfillment by Amazon (FBA) and goods are redistributed from Amazon’s warehouse network.
Keep in mind that if you choose to go this route and use an Amazon warehouse, you will have to pay Amazon FBA fees for these extra services.
Amazon’s Vendor Central – It’s Invite Only
Amazon Vendor Central is a portal created to allow manufacturers and customers to connect. In this platform, Amazon is functioning as the distributor or middleman. Brands sell their products to Amazon (often in very large quantities) at a lower profit margin. Amazon then resells the inventory under their own brand.
If you’re using the Amazon Vendor Central program to sell on the Amazon platform, you’re referred to as a first-party seller. When it comes time to fulfillment, you’re acting as a supplier, selling to Amazon.
Typically, selling on Vendor Central model follows a traditional distribution model where you first negotiate pricing and terms with your Amazon buyer. Then, after signing a Vendor Agreement, a purchase order is created, and you’ll ship your product to Amazon and receive replenishment PO’s or through Direct Fulfillment.
Amazon’s Vendor Central:
- Is by invitation only
- Sell directly to Amazon (not end users)
- Amazon controls retail pricing
- Once your bulk items are shipped to Amazon, you’re done
- You’re responsible for advertising (design and cost)
- Amazon makes the decisions regarding what they think will sell
- Amazon controls the inventory management
Let’s Imagine That You Had a Magic (E-Commerce) Wand
Pretend for a moment that Amazon was simply a (very) large independent retailer interested in selling your products. How would you react if they said, “Never mind all those small orders and selling your products one at a time, we’ll take it all.”
I’m guessing that you might show a little less reluctance to something that in a different context would feel like a huge personal success and opportunity to pivot.
That’s why I was curious what our collection of e-commerce veterans, Helium 10 pros and Amazon sellers would have to say about Amazon’s Vendor Central.
Here are my questions for our esteemed group:
Question 1) What type of Amazon seller is most likely to benefit from a move to Vendor Central?
Carlos, being much more clever than I, decided to slightly adjust my question.
Carlos Alvarez: The Amazon seller most likely to benefit is a tricky one, the better question I feel is what sort of ASIN is most likely to benefit from a move to Vendor. The ASIN most likely to benefit is one that is past successful launch, is PPC ready, fully optimized, has plenty of reviews and is in the early stages of mid product lifecycle. The reason is that you give up a lot of control in (Vendor Central) VC that would be devastating during a launch.
Karyn Thomas: I think that Vendor Central really benefits a seller that wants to move large volume, but doesn’t know how to do that on their own.
Vince Montero: Vendor Central is principally for large Brands that want Amazon to do the work of managing most of the functions to sell the product on Amazon by just selling Amazon the product. It is not necessarily for an average Helium 10 seller.
Barcus Patty: Vince nailed it. I can’t provide anything better.
Question 2) What do you think the future is for the Vendor Central / Seller Central model?
Carlos Alvarez: This future is already happening. One of my brands has already begun making the transition from VC to OV (One-Vendor), which will be a single dashboard for SC and VC with features enabled depending on the relationship. The first major move currently happening is the blending of “perks” and Ad types between the two platforms. Ads and programs previously the exclusive domain of VC are now available in SC with Brand Registry.
Karyn Thomas: I wouldn’t be surprised if Amazon eventually gets rid of Vendor Central. I think it is more cost effective to only work with Third-Party sellers. I think that’s why they are offering more support and tools on Seller Central all the time.
Vince Montero: I believe they will stay separate since they serve 2 totally different types of customer. However, many ad units that were once available only for Vendors are now available for Sellers and that trend will continue.
Barcus Patty: They shuttered Vendor Express a few years ago and I can see them doing the same with VC one day if it continues to be stagnant. And Vince is right, several tools that used to only be available for VC are now available for SC.
Question 3) If you were offered an opportunity to sell through Vendor Central, would you accept? And in two sentences, why or why not?
Carlos Alvarez: Yes, because it is invite only, I can access features without actually fulfilling PO’s, it is a huge piece of leverage to use with other Big Box retailers to get in stores. There is no downside to having a VC account, a downside can be created by a seller that is ignorant to the impact their actions in VC can have on the success or lack thereof of their brand.
Karyn Thomas: No. I have heard horror stories of people that thought using Vendor Central would be cool, but ended up really hurting their business. I don’t like that Amazon controls the price and has intense fees if you don’t keep your inventory in stock.
Vince Montero: No, because I am not a large brand
Barcus Patty: No, only because I see more profit and opportunity by staying a 3P (third party seller). And you have more control over your brand as a 3P as well.
Question 4) What’s the ONE benefit of Vendor central that you’d like to have on Seller Central?
Carlos Alvarez: #1. Early Vine Access. On VC, I can enroll and get product reviews on my listings PRIOR to launch. This is a POWERFUL advantage as you begin the “honeymoon” period fully loaded with reviews/social validation. #2. Vendor Direct Ship program. Nearly identical to the Seller Fulfilled Prime program in SC except Amazon pays for the shipping and provides the labels while I still pay only close to half of what my Amazon fees would be on SC without even considering the shipping.
Karyn Thomas: The credibility and social proof to buyers. They trust Amazon.
Vince Montero: Less time managing my Amazon account.
Barcus Patty: Again Vince is right on. It’s less to manage.
Question 5) If you left Seller Central for Vendor Central, what’s the one benefit that you’d miss most?
Carlos Alvarez: I operate on a hybrid (SC & VC) model between the two, so I would never do this. For the sake of the question though, I would miss the detailed reporting, the full control during launches and greater control of inventory levels in most circumstances.
Karyn Thomas: Being in control of my product pricing.
Vince Montero: Control over my seller central account.
Barcus Patty: Same here again. You do lose some control as Amazon can change your listing copy without notice in VC, among other things.
As I said to open the article, you probably won’t turn into a seller that uses Amazon’s Vendor Central. Or, the two portals might evolve into something else altogether. For now, what’s sure is that this closer look helps bring into focus the ways that you can make sure and take full advantage of the freedom and control that Amazon allows sellers in this amazing e-commerce marketplace.
In these challenging times, Amazon, as well as every other online marketplace is just going to continue to grow. Conventional ways of doing business might be enough to keep your business going, but it takes the ability to adapt, and change with the times to really crush it!
Helium 10 is here to help you every step of the way.
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- Amazon’s Buy Box: Why It Matters and How to Get It - December 30, 2020