Amazon has two different platforms for businesses looking to sell their products on the platform—Amazon Vendor Central and Amazon Seller Central. It’s important to understand the pros and cons of Amazon Vendor Central vs. Seller Central so you can make an informed decision about which one is right for your business.
What is Amazon Vendor Central?
Amazon Vendor Central is more of a typical reseller structure. Amazon buys the products, sells them at a price that they deem to be appropriate, and then they will pay the vendor back. Vendor central is invite-only and it’s generally reserved for larger manufacturers and well-known brands. This platform provides a great opportunity for larger companies to increase visibility and grow their customer base.
Pros of Amazon Vendor Central:
- Bulk orders make it easier to manage inventory
- Receive payments directly from Amazon
- Increased visibility as a result of Amazon advertising opportunities
Cons of Amazon Vendor Central:
- Inflexible when it comes to the pricing of your product
- Can take more effort to set up due to brand registration process
- No direct access to customers feedback or reviews
- More difficult to track sales data since there is no seller account associated with the product listing
- Less control over their customer relationships when using Vendor as opposed to Seller Central (Amazon offers no customer service for sellers on Vendor Central).
What is Amazon Seller Central?
Amazon Seller Central allows third-party sellers to list products on Amazon’s marketplace. With Seller Central, you have a couple of options for how you can choose to get your product to the customer. Most sellers use Fulfilled by Amazon or FBA, in order to leverage Amazon’s Prime shipping. The most notable difference with Seller Central is that anyone can use it, yes, even the people currently using Vendor Central (hybrid account).
Sellers are able to list their products at any price they choose, have access to customer feedback via ratings and reviews, and have full control over inventory management. Brand registered sellers can also set up their own storefronts to create a branded shopping experience for customers.
Vendor Central is very restrictive in the data it gives away within ARA (Amazon Retail Analytics), while Seller Central provides businesses with a lot of extremely valuable data. Seller Central Business Reports allow you to see how many times your listings are being viewed, conversion rates, and much more, allowing brands to make data-informed decisions on things such as listing optimizations and advertising campaigns. However, seller central reporting is a beast of its own that can be difficult to sift through, which is why there are software solutions such as myHorizons which make seller central reporting easy.
Pros of Seller Central:
- Ability to control your own product pricing, listings, and inventory management
- Direct access customer reviews & feedback
- Easier tracking & monitoring of sales performance through analytics
- Easier setup process than vendor central for smaller sellers, since there is no brand registration required
Cons of Seller Central:
- Seller central fees per item sold (includes monthly subscription fee)
- For smaller sellers, it can be difficult compete against larger organizations with deeper pockets & greater resources when it comes to advertising & promotions
Hybrid Accounts: Using Seller and Vendor Central
Anyone can use Seller Central, even brands currently using Vendor Central. This is referred to as a hybrid account. This type of account is not allowed by Amazon, and Envision Horizons does not encourage brands to utilize this strategy.
A business following the “gray hat” hybrid model will use Seller Central to sell directly to Amazon customers, and use Vendor Central to sell wholesale to Amazon.
The reason some sellers opt for the unauthorized hybrid model is that it allows for coverage of any vendor stockouts and solves the problem of launching new products which wouldn’t generate orders on the vendor side initially. However, it is also important to note that it is not recommended sellers compete with offers that they have active on Vendor Central as this can jeopardize your relationship with Amazon.
Preparing to Move to Seller Central – Distribution Leakage
If you plan to migrate from vendor to seller central, controlling your distribution will be vital to your success and profitability. When you move to Seller Central, unauthorized (or even too many authorized) third party sellers can hurt your ability to advertise and undercut your prices on Amazon. Using an Amazon brand protection service can help you protect your intellectual property, preserve the integrity of their products, and prevent lost sales.
Envision Horizons’ Stance on Amazon Vendor Central vs Amazon Seller Central
At face value, Vendor Central might seem like less work for the seller and therefore the better option, but in many cases the opposite is true. For one, payouts to the seller are slow compared to Seller Central. Vendor Central contracts are paid with invoices on net 60 terms. However, if Amazon pays you in 30 days or less, then they give themselves a 2% discount. Sellers who opt for Seller Central have the advantage of retaining full control over their product listings and pricing.
That may not be a big deal to some companies but having control over your pricing is definitely a pain point for most businesses. Vendor central is completely inflexible when it comes to the pricing of your product. Many businesses have a hard time trying to get Amazon to follow their Minimum Advertised Price (MAP) policy. This, in turn, makes MAP pricing difficult to enforce with other resellers. In addition to maintaining a fair price for your products, you have to make sure that you are monitoring Amazon’s charges vigilantly. It’s not uncommon for charges to be mistaken, and recouping your money can be a long and arduous process.
Additionally, Amazon offers no customer service for sellers on Vendor Central.This means you’re missing out on valuable information like how the order process went, customer demographics or even feedback on your products. If there is a problem with shipping or quality control, you don’t have the ability to contact the customer to make it right. Seller Central gives you more control over the way your company interacts with customers, both the happy and unhappy ones. With reviews being a key to success on Amazon, this is very valuable.
For some larger retailers, Vendor Central is a smart choice for their business model, however many other retailers are making the switch to Seller Central with great results. When playing on such a big marketplace by Amazon’s rules, it is to your advantage to make sure that you have the ability to control and manage as much of your business as possible. Seller Central allows you to do just that, making it a better choice for many businesses.
How Moving from Vendor to Seller Central Could Improve Your Margins
In many cases, moving from Vendor Central to Seller Central can improve a brand’s overall profitability and revenue.
You can use the FBA Revenue Calculator to see potential profitability of an ASIN when utilizing Seller Central and the FBA program.
Additionally, with seller central, any ad dollars you invest are going directly toward your sales. There is no intermediary between you and your return on investment.
Conclusion – Amazon Vendor Central vs. Seller Central
Ultimately, it will depend on your specific goals and preferences when deciding whether you should use Amazon Vendor Central or Seller Central for your business needs. No matter which route you choose it’s important that you understand all aspects of each platform before making a final decision so that you can maximize success!
Hiring an Amazon Agency to Migrate from Vendor to Seller Central
A full service Amazon agency such as Envision Horizons can provide the time, personnel, expertise, and software tools needed to efficiently assist with your transition from vendor to seller central and manage daily seller central operations.
Learn how Envision Horizons can take your Amazon business to the next level- reach out to us at sales@envisionhorizons.com for a free strategy session, or apply for a free Amazon account audit.
