Amazon Seller Central vs Vendor Central A Guide for 2019
Whether you are an Amazon Seller or Vendor, one thing is for sure – Amazon is always changing and expanding to improve its processes for those who choose to list their products on its wide-reaching marketplace. These processes, selling tools and capabilities differ depending on what kind of account you have – Seller or Vendor.
The Basics – What is the difference between an Amazon Seller and an Amazon Vendor?
Amazon Sellers control their products, listings and sales processes, selling their products directly to consumers and handling all pricing, storage, shipping and returns themselves.
On the other hand, Amazon Vendors sell their products in bulk to Amazon, who then prices and sells the products to customers. As of right now, and into 2019, brands can become Amazon Vendors through invitation only (while there once was the option of choosing to become a Vendor through Vendor Express, that option no longer exists).
Amazon Seller Central and Vendor Central have different interfaces and controls, and the brands within each have different abilities in terms of what tools they can use to market their products. Some of the key differences include:
If you’re a smaller shop, able to handle your own logistics or want more control over how your products are priced and presented, then a Seller Central account is likely the right option for you. Most brands selling on Amazon will at least start off as a Seller, given the fact that Vendor Central is open only to those personally invited.
Seller Central Pros
Pricing, Payments and Margins: When it comes to money, Sellers have much more control over how their products are priced on Amazon. This leads to potentially higher margins than their Vendor Central counterparts who have to leave pricing up to Amazon. Amazon tries to stay within minimum pricing requirements and often chooses low prices to stay competitive, which can hurt the margins of Vendors. Another great component of Seller Central is the method and frequency in which you get paid. Once sales start to come in, Sellers are paid via deposit into their Amazon account every 14 days.
Seller Support: One common complaint between Amazon Vendor Central users is lack of support. Since Amazon does most of the heavy lifting after a wholesale purchase is made from a brand, they do not offer the same level of support as they do to Sellers who handle their sales processes themselves. Seller Central users gain access to priority email support as well as responsive phone line support.
Seller Central Cons
Responsibility and Costs of Handling Sales: With Seller Central, the onus is on the brand to ensure their items are stocked and ready to be shipped as quickly as possible when an order comes in. This is the case 24 hours a day, 7 days a week, 365 days a year (or at least until your inventory sells out). Sellers may sometimes find the cost of fulfillment high, and coordinating returns challenging. That being said, Sellers do have the option of enrolling in the Fulfillment by Amazon (FBA) program in which Amazon stores and ships a Seller’s products, for a fee.
Fewer Advertising and Enhanced Marketing Options: While both Sellers and Vendors now have access to Amazon Advertising (formerly AMS for Vendors and Seller Central Advertising for Sellers), Sellers are slightly limited in terms of how they can use the service. Product Display ads are not currently available to Sellers, while they are to Vendors. In terms of Enhanced Marketing Content (EMC), Sellers who have completed Brand Registry can create EBC (Enhanced Brand Content) Pages, which have fewer functionalities than the Vendor Central version, called A+.
Even though brands must be invited to become Vendors by Amazon’s team of buyers, it is good to know the ins and outs of this account type should your brand ever receive an invitation. If the idea of selling your products wholesale to Amazon and letting them take the reins is attractive to your business model, then accepting this invitation may be valuable to you.
Vendor Central Pros
Higher Levels of Customer Trust (and Sales): Vendor Central products have different messaging on their listings than those sold through Seller Central – “Ships from and Sold by Amazon.” This one line, while short, offers a level of confidence to consumers who might prefer to buy from Amazon directly, rather than through a third-party seller. Traditionally, this has led to higher sales for Vendors compared to Sellers.
More Advertising and Marketing Options: Amazon Vendors, through Amazon Advertising, have the option to create not only Sponsored and Headline Search Ads, but Product Display Ads as well. While Sponsored Ads and Headline Ads target shoppers based on their search terms, Product Display Ads utilize more specific targeting, reaching customers at the interest and product level. These ads are displayed on a competitor’s product listing for ultimate visibility at a key point in the buying journey.
No Need to Handle Shipping or Returns: By selling wholesale to Amazon, Vendors do not need to worry about handling customer shipping or returns. That being said, there are logistics like inventory requirements to stay on top of as an Amazon Vendor.
Vendor Central Cons
No Control Over Pricing, Therefore Lower Margins: Once Vendors send their products to Amazon in bulk, Amazon then controls how the items are priced and sold – something to be mindful of when selling through multiple channels. In order to stay competitive and offer the best prices to shoppers, Amazon often lowers the cost of Vendor products. While this might lead to better sales, it can often hurt a Vendor’s profit margins.
Slower Payment: Unlike Sellers who get paid regularly for sales made (the standard is every 14 days), Vendors are often locked into 30, 60 or 90-day payment terms based on purchase orders fulfilled. Waiting three months to receive payment for a bulk shipment can be frustrating for an Amazon Vendor, and opting for the 30-day term comes with additional fees.
Strict Logistical Guidelines: Though Vendor Central users do not need to handle the storage and shipping associated with selling directly to consumers, there are strict guidelines put in place by Amazon when it comes to fulfilling purchase orders and keeping up with stock requirements. Struggling to keep up with these guidelines often results in chargebacks.
Both Seller Central and Vendor Central have their pros and cons, as does any eCommerce selling platform. The weight of those pros and cons depends entirely on your own business objectives. It is important to understand the differences between the two account types so that you can grasp the full context of Amazon’s merchant base and be informed of your options should an Amazon buyer ever invite your brand to join the Vendor side.