Selling on Amazon is considered by some online entrepreneurs as one of the best ways to make money online. Once you have created an account and obtained your Amazon Seller Central login, earning possibilities are almost boundless.
Having an Amazon Seller Central account is not the only avenue through which you can make money on Amazon. Apart from Amazon FBA or FBM, you can also make money by selling directly to the eCommerce giant, through Vendor Central Amazon.com.
And yes, you’ve read it right. You can sell directly to Amazon via Amazon Vendor Central, making the leading eCommerce website your customer.
Deep Dive into Vendor Central vs Seller Central
In this article, we will take a deep dive into Amazon Vendor Central. We will also be discussing some of the commonly asked questions about Vendor Central.
What is Amazon Vendor Central?
Vendor Central is a platform reserved for facilitating business between a private vendor and Amazon. When a business owner signs up for this platform, they will not be selling directly to online shoppers but rather to Amazon as a supplier.
Normally, Vendor Central sellers start as third-party merchants. When their items generate more demand, Amazon invites these sellers to register on Vendor Central to become a supplier. You can see if a company or business is selling through Vendor Central by viewing the Buy Box area of the product detail page.
Amazon.com: Screenshot of Amazon Product Page; Retrieved Jan. 11, 2022 From https://amzn.to/3q81HyO
This type of business model is ideal for businesses that are not built or accustomed to selling directly to consumers. Vendor Central is a route often maximized by distributors or direct manufacturers.
Selling items directly to Amazon via Vendor Central means that you are a first-party or 1P seller. Like Amazon Seller Central, the Vendor Central platform has its own rules and challenges that vendors navigate.
What Is Amazon Seller Central?
Amazon Seller Central is another web interface or platform where brands and merchants sell their products directly to Amazon shoppers. Businesses and entrepreneurs with an Amazon Central Seller login account are considered marketplace sellers or third-party merchants.
As third-party merchants, sellers have the option to fulfill orders on their own. This approach is popularly known as Fulfillment By Merchant or Amazon FBM, where sellers handle the packing, shipping, customer service, and returns for each ordered item.
As an alternative to FBM, sellers may fulfill received orders directly through Amazon FBA. Sellers simply send their inventory items to Amazon fulfillment centers, and Amazon will do the rest, including shipping and customer service.
Whether the order fulfillment is FBA or FBM, competition remains tough on Seller Central. To win more Amazon Buy Box and maximize profits, sellers will look into additional seller tools and numerous methods and techniques, including the use of Amazon repricers.
Vendor Central vs Seller Central – Key Differences
The difference between the two Amazon platforms lies within whom the products are directly sold to and who is selling the product. In Vendor Central, you sell the products directly to Amazon-employed buyers, who will then resell the products to Amazon customers.
On the other hand, in Amazon Seller Central, sellers directly sell items to consumers as Amazon third-party merchants. Amazon FBA or FBM sellers list their products on Amazon’s website and compete among other sellers for sales.
Knowing these fundamental differences between the two platforms can help you identify opportunities and drawbacks. To better understand the advantages and disadvantages of Vendor Central vs Seller Central, below are some of the pros and cons of the two platforms.
Pros and Cons of Vendor Central vs. Seller Central
Advantages of Vendor Central
Since your items will show up on Amazon as being “sold by Amazon,” they have a higher chance of being bought by customers. Amazon shoppers see these items as an ‘ideal buy’ as they are associated with Amazon itself.
You can enjoy an efficient advertising tool when you are enrolled in Vendor Central. With an improved targeted campaign, you can increase sales and revenue in the process.
Although Amazon Marketing Services (AMS) is likewise accessible for any seller with an Amazon Seller Central login, it only offers basic features. With Vendor Central, vendors have access to the premium features of AMS, providing an advantage to sellers.
Disadvantages of Vendor Central
Strict Logistic Guidelines
New members of Vendor Central should be cautious with their inventory and deliverables. Since Amazon is the ‘customer’ and orders are in bulk, fulfilling the order on time is essential. Failure to provide the product demands by Amazon after the deadline could lead to penalties, including chargebacks.
Once you have an Amazon Seller Central login and start listing items, you are assured that you directly have supervision over the pricing of your items.
In contrast, Vendor Central members have a different experience. Although they can set wholesale prices, Amazon still has the final consent of the listing price.
Ultimately, it is still up to Amazon to make the decision to place an order with you. In effect, you are practically handing pricing decisions to Amazon.
Invite Platform Only
To avoid upsetting the Seller Central environment and to ensure that protocols are strictly observed, Amazon Vendor Central is not made available for all interested sellers. This is a limited and invite-only platform that has its own criteria.
New Product Difficulty
Even if you are enrolled in Amazon Vendor Central, there is no guarantee that you can expand your product line by introducing new products. Amazon restricts vendors from selling new products, making it difficult to launch new items.
Advantages of Seller Central
Direct control over inventory items is one of the reasons why Amazon Seller Central is a thriving platform. For efficiency, you can either become an Amazon FBA seller or fulfill orders on your own terms via Amazon FBM.
With Seller Central, you can choose to sell any products or introduce new items provided they are in line with the general selling and legal guidelines of Amazon.
Like having control over products, sellers using Seller Central can perform price adjustments. To enhance their pricing strategy, sellers can use Amazon repricers, including algorithmic AI repricers.
With the freedom to adjust prices as they see fit, sellers can compete against leading sellers, including Amazon itself. They can manipulate listing prices to attract shoppers and potentially win the Amazon Buy Box.
Another advantage of Amazon Seller Central over Amazon Vendor Central is the availability of free seller analytics. With the help of consumer and product data, you can easily adjust your strategy in favor of the demands and trends shown by the analytics.
Apart from the on-site data analytics of Amazon, advanced Amazon repricers, like Seller Snap, also have their own Seller Analytics to help sellers make informed decisions based on real-time data.
Disadvantages of Seller Central
Having an Amazon Seller Central login means further costs that could sometimes limit sellers from selling low-priced items. Amazon fees and the so-called Amazon hidden costs will consume your profit margin if you are not cautious with handling fees within Amazon.
Amazon sellers will also have to deal with returns and customer service following the purchase. This will take time and would require an additional workforce on the seller’s part.
Unsurprisingly, products sold through Vendor Central are highly favored by consumers than those sold by third-party merchants. The main reason is shoppers’ bias over items indicated as ‘Shipped from and sold by Amazon.com.’
Frequently Asked Questions | Vendor Central vs Seller Central
To improve your understanding of Vendor Central, we have gathered some frequently asked questions about the platform. Knowing the answers to these frequently asked questions can provide you with a deeper understanding of the platform, allowing you to make an informed decision between Vendor Central vs Seller Central.
How Can You Join Amazon Vendor Central?
In order to become an Amazon Vendor, one cannot simply register or create an account similar to that of a third-party Amazon seller. As mentioned, Vendor Central is an invite-only platform.
To become a first-party seller, you will have to be recruited by Amazon. Amazon has a recruitment team that checks for new brands and products to sell online. If you pass their standard, you will be invited to join the platform.
In general, Amazon recruiters have the following criteria:
- Amazon sellers must have a high sales record on the Seller Central platform.
- The seller must have popular items on the Amazon marketplace.
- There must be a relatively good conversion rate and a low bounce rate for the product.
- Sellers must have interesting products shown at trade shows, fairs, or exhibits.
In order to increase the chances of being invited to Vendor Central, it is advised that vendors first start their selling activities on Amazon Seller Central, as they are more friendly to newbie sellers.
The goal is to establish yourself as a seller on Amazon Seller Central in order for Amazon to notice you and potentially invite you to become an Amazon vendor.
How Do You Begin With Vendor Central?
The best-known way to start with Vendor Central is to become an Amazon seller. Develop an attractive Seller Central record so that Vendor Central recruiters will notice you.
Vendor Central vs Seller Central – Which Will Generate More Profit?
In terms of profit margin, Amazon Seller Central provides a higher margin rate than that of Vendor Central. Amazon performs most of the workload, and the profit margin is likewise reduced. However, you do not have to deal with the stress that 3P-sellers deal with.
How Long Does It Take For Vendors to Receive Money?
Payment-wise, third-party sellers receive money faster than first-party sellers or Amazon vendors. Amazon vendors get their money from a sale only after two to three months.
Which Platform Has More Following?
Amazon Seller Central is more popular than Vendor Central. One of the reasons behind the growing popularity of Seller Central is its easy setup. In contrast, in Vendor Central, vendors will have to be pre-vetted and invited before becoming an Amazon Vendor.
How Can Amazon Help Me Sell My Items?
There are various ways Amazon can help you sell your product, whether you are an Amazon seller or an Amazon vendor. Here are some ways Amazon helps their 1P and 3P sellers benefit from the Amazon platform.
Amazon has improved its advertising options to help market your products. What separates Seller Central from Vendor Central in terms of advertising is that the latter has access to premium advertising features.
Amazon offers information to sellers and vendors through their analytics dashboard. This can help entrepreneurs monitor data to study customers and competitors, leading to informed decision-making.
Amazon Product Shipping
Both sellers and Amazon Vendors have the opportunity to make use of Amazon fulfillment power. For vendors, it is already given that Amazon will take care of the shipping, while sellers will have to choose Amazon FBA to let Amazon handle shipping for them.
Who Sets Product Prices on Amazon?
Vendors can set their wholesale product price when creating a listing. However, if Amazon disagrees with your pricing, they will email you regarding cost improvements. The price Amazon suggests is likewise available on Vendor Central. In response, vendors can choose from the following:
- Match Amazon’s requested price
- Lower price but not as far as Amazon requested
- Mark the stock as permanently unavailable
On the other hand, Amazon third-party merchants have complete autonomy regarding product pricing, provided it is within the acceptable range. Hence, most Amazon sellers use Amazon repricers to obtain a competitive edge over other Amazon Seller Central users.
What Would Be My Role as an Amazon Vendor or Amazon Seller?
As an Amazon vendor, your main role is to check purchasing orders and billing. You will be responsible for fulfilling orders within Amazon’s logistical requirements. There is no need for you to handle customer service, Amazon will be the one to deal with customers and Amazon returns.
Amazon will take care of the remaining sales-related tasks once an agreement has been made between parties. By contrast, Amazon sellers will be responsible for their products, including taxation, liabilities, inventory, and sales reconciliation.
Vendor Central vs Seller Central | Which Should You Choose?
In choosing between Amazon Seller Central and Vendor Central, the decision should be based on your preference and capacity.
When making your decision, you should consider the profit and workload involved in each platform. Additionally, you should also be capable of handling orders and maintaining your inventory, especially in Vendor Central, where orders are in bulk.
At the very onset of it, you will still have to prove yourself as a seller before Amazon can consider you as their potential vendor.