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IO Scout - 10+ tools for Amazon sellers at a special price.
Chances are, if you are a seller on Amazon or even have your own business on Amazon, you are familiar with Amazon Vendor Central. If not, you should know that the biggest difference between Amazon Seller Central, which you no doubt use as a seller, and Amazon Vendor Central, is just the difference of who is selling the products.
If you use Vendor Central, you are not in charge of selling the products. Instead, Amazon’s retail team buys products from you and turns around and resells them. This takes away a lot of the pressure from you, and lets you focus on the quality of your product.
That said, the biggest caveat with Vendor Central, is that you must wait for Amazon to send you an invitation before you can join up. And, while you will have more guaranteed sales, they will likely be at a cheaper price than if you sold less items in Seller Central.
With Seller Central, you are in charge of all product marketing and sales, as well as shipping and customer service. With Vendor Central, you can offload some of those tasks and let Amazon do the heavy lifting for you.
Both are viable options to you as a seller – IO Scout prepare more information about Vendor Central and the pros and cons of selling your products as a vendor versus as a seller.
Acting as an Amazon Vendor is not too different than any other type of brick and mortar vendor, you are just doing it from behind the internet, and in this case you are using the brand name of Amazon as a middleman to help with sales.
Amazon Vendor Central is a great way to sell your products while Amazon does most of the work for you. They will purchase in bulk from you, you send them the materials, and then you are mostly done as a seller.
Distributors and manufacturers that work with Amazon use Amazon Vendor Central, as that is the web interface that they use. You can only sell on Vendor Central if you receive an invitation; it is not something you can volunteer for or sign up for. In Vendor Central, you would be referred to as a first-party seller, which means you are selling directly in bulk to Amazon without worrying about who the end customer will be.
If you are buyer and trying to determine if the seller is a vendor or a seller, look on the webpage for the phrase “ships from and sold by Amazon.com ,” as that phrase indicates the seller is a part of Amazon Vendor Central.
From a buyer’s point of view, it should not matter if they are purchasing goods from a seller or a vendor. An individual person likely does not care who the actual vendor is on Amazon. However, some Fortune 500 companies will not allow their procurement teams to purchase items from Amazon unless they are “shipped to and sold by Amazon.” This helps them verify the materials are good. So, if you have hopes of selling products to large companies, you might be better as a Vendor than as a Seller.
How does pricing work for Amazon Vendor Central and is it worth it for you as a seller? You are going to be selling your products in bulk as part of Vendor Central. Amazon will negotiate a wholesale price with you, and then they will raise the price and sell it to consumers, netting the profits. The most important part of the pricing process for you as a seller is when you negotiate the price up front with Amazon.
Amazon will try to pay you as little as possible, in order to raise their profits. The pros for you are that you are getting a reliable bulk sale and you do not have to worry about chasing individual sales. The cons are that you might be able to profit more on each item if you do not use Vendor Central. Consider whether you would have a lot of guaranteed sales at a lower price or fewer, unreliable sales at a higher price. In most cases, Vendor Central makes sense even though the price per sale will be lower.
There are no fees per item with Vendor Central, but Amazon will charge some other smaller fees to vendor accounts. Just remember, any fees charged also mean you are selling your products in bulk. So, the tradeoff is likely worth it as you do not have to spend time chasing down sales.
You do not have to pay an item or monthly fee in Vendor Central, but it is still considered more expensive than Seller Central. This is because Amazon will charge a marketing fee, remittance fee, pre-payment fee, and packaging fee, and they will also likely be paying you less per item than if you sold individually on Seller Central.
In general, since you are selling in bulk, you will find the fees with Vendor Central to be minimal, and the payments of your products selling in bulk will more than make up for the nominal fees charged to be a part of Vendor Central.
Vendor Express is basically like a smaller, streamlined version of Vendor Central. Your payment schedule might be affected, as you are going to be paid slower – every 90 days versus 60 days for Vendor Central or two weeks for Seller Central, and you do give complete control to Amazon for deciding on how much your product sells for.
Another difference with Vendor Express is that it is essentially a trial period that you can use to start your business. You can post an item for sale on Amazon, and then after it sells, Amazon might take a chance and buy it from you in bulk. So, it’s a way to get your foot in the door with Amazon then being on the hook to make most of the upfront investment in your product.
Vendor Express also limits the number of products you can sell at 85, whereas Vendor Central does not place any limits on how many products you can offer.
If you are choosing between Vendor Central and Vendor Express, Vendor Central is the way to go. However, if you only have the option of joining Vendor Express, it still can be very good and profitable for your business. Think of it has a stepping stone to one day being a part of the larger umbrella that is Vendor Central.
There are a lot of differences between the two options for you as a seller, and of course there are many pros and cons. We will break down everything for you in detail below.
The biggest different is if you are a first party seller or a third party seller. Vendor Central allows you to market your goods as “ships from and sold by Amazon.” Amazon is buying your products in wholesale from you, and then selling them directly. In Seller Central, you are in charge of your products from sales to shipping.
How much control over your product do you want? With more control, you can charge the consumers more. But, by paying Amazon a fee to be in Vendor Central, you will have more guaranteed sales at a cheaper price.
Whether you are selling golf clubs or Band-Aids, there is room for you on Amazon to be a successful seller. Seller Central is most likely where you are doing all of your selling on Amazon, unless you received a special invite to be a part of Amazon’s Vendor Central, and it’s also almost a guarantee that you will start your selling in Seller Central.
As a third-party seller on Amazon Seller Central, you will be selling your goods directly to the end customer. You still have a couple choices and can have Amazon assist you with shipping and customer service. If you want to manage these facets yourself, that’s ok, but if you want Amazon to help you, you will need to enroll your products in “Fulfilled by Amazon,” and this means you will pay Amazon to ship and manage the products you sell.
Don’t worry about rushing and chasing the illustrious invitation to be a part of Vendor Central, if you build up your Seller profile and gain success, that invitation will come. And, you can be very profitable in Seller Central. Take advantage of the independence, price your products how you want to, and enjoy the direct interaction with your customers. Build up your positive feedback
Like anything else in life, even if you get an invitation for Amazon Vendor Central, you should still consider the pros and cons.
If you are still deciding between using Amazon Vendor Central or Amazon Seller Central, consider the pros and cons of Amazon Seller Central as well.
You’ve got questions, we’ve got answers. Take a look below at some of the most frequently asked questions about navigating Amazon Vendor and Seller Centrals.
Assuming you receive an invitation to join Vendor Central, you will have a decision to make between Vendor and Seller Centrals. Which is harder to use, and which is going to make your life easier? While there are pros and cons to both, let’s look at how easy they are to use.
In Vendor Central, you are going to be working as the distributor, which means you will focus more of your efforts on distributing goods in bulk than on advertising and trying to attract customers. In reality, Amazon does most of the advertising and work for you in Vendor Central.
Seller Central requires you to do more of the work. You will be in charge of shipping and customer service, unless you pay to upgrade to Fulfillment by Amazon (FBA) and outsource some of that work to Amazon.
With Seller Central, you need to maintain your own inventory levels. This might sound challenging, but you will be more hands on, so you will know when inventory is getting low. Sometimes in Vendor Central, Amazon can run out of your product without even notifying you of low inventory.
If you want a lot of control over your products, choose Seller Central, as you do things like set up minimum pricing for your products. In Vendor Central, you are susceptible to Amazon’s price matching, which means if the customer finds your product for cheaper elsewhere, Amazon will honor that price and only charge that mount to the consumer. If you are in Seller Central, you do not have to honor that price, and you will still get your full profit.
Keep in mind that Amazon is also going to negotiate wholesale prices with you in Vendor Central. They want to buy your products as cheap as possible so they can make as much profit as possible when they turn around and sell your product to the customer. Your profit margins are likely to be lower with Vendor Central, but you will have more reliable sales since you are selling in bulk, so it’s almost a wash. The real question to ask yourself: do you want reliable sales at a lower price, or unreliable sales but a higher profit margin?
Yes, you can have both accounts just make sure you negotiate in your vendor contract that you still retain the rights to also sell third party on seller central. Many famous companies, Steve Madden for example, maintain accounts on booth Vendor and Seller Central because they like the flexibility. It will be more work to have multiple accounts, but you can reap benefit if you do so.
Anyone can be a seller on Amazon’s Seller Central. The Seller Central is designed to help new sellers get established and start their businesses. If you are just starting a business, there really is no better place to get started than Amazon Seller Central. You get the brand name of Amazon behind your product. One you build up sales and build your business, you can one day move over to Vendor Central.
On the other hand, you cannot join Amazon Vendor Central without an invitation from Amazon. Work on your Seller’s business first, and eventually you might get this invitation from Amazon to become a full-fledged vendor.
There is not an exact science to get an invite. There is no formula of “perform xyz task and you will automatically receive an invitation to Vendor Central.” That said, the goal is to attract the attention of the retail team, and there are a few ways you can do that.
The team needs to like your brand, and they will reach out to you via email if they are interested. Build your brand on social media and the internet and create as big of an online presence as you can. Promote Promote Promote – you cannot advertise your business enough! The more page views your business gets, the more sales you make, that will all translate to exposure and hopefully earning an invitation.
While the odds are not in your favor, you can consider reaching out to Amazon through their link for Contact us on Vendor Central, and you can make a pitch to them in an email. Think along the lines of Shark Tank. Tell Amazon why you would make a great vendor, but be prepared to support your pitch with facts, and the numbers and revenues of prior sales years.
Social media is a good way to garner attention, build up all your pages, and don’t forget about LinkedIn. The more followers you have, and the bigger your brand, the more likely you will receive an invite to Vendor Central.
Getting paid in Vendor Central can be cumbersome. It is easier to get paid in Seller Central, as the buyer just pays you at the time he buys your product. Amazon Retail is known for giving headaches to people using Vendor Central, and you might have to hire a third-party to help you get paid.
Vendor Central is a large enterprise dealing with a high volume of goods and money, and all of that can add to headaches of timely payments. If you are looking to be paid reliably and quickly, Seller Central is the better option.
While you should get reliable payments from Vendor Central, they might not come for 60-90 days after your sales go through. If you need quicker payments, you are going to want to stick with Seller Central where you can interact directly with the buyers of your products.
In Seller Central, you handle all shipping and customer service unless you outsource and pay Amazon to fulfill your orders and have an FBA account. Under Vendor Central, you act as a distributor and ship your products one time in bulk to Amazon, and they handle the distribution of the products to the end customers.