Some argue that Amazon is moving away from Vendor Central, however until this comes to pass it’s a program well worth exploring!
In this article, we’ll cover:
- How is Vendor Central different to Seller Central?
- How is Vendor Central different to FBA?
- Benefits of being on Vendor Central
- Drawbacks of being on Vendor Central
- How to make your Seller Central + Vendor Central work together?
- Can you get your private label brand onto Vendor Central?
How is Vendor Central different to Seller central?
With Vendor Central you are selling directly to Amazon. It’s sometimes called first-party or 1P because when a sale is made to a consumer it’s sold by Amazon themselves (Amazon Retail), not by you, a 3P merchant.
On Vendor Central, you submit your product listings and wholesale prices, then Amazon sends you a purchase order. They might order just a few units or maybe hundreds at a time. You don’t have to worry about selling to consumers, fulfilling orders or dealing with aftercare. Amazon is the retailer, so all that is down to them.
This means that you aren’t responsible for the whole retail process, and won’t sell single units directly to consumers. You also don’t have to deal with any customer support issues.
Take a look at the table below
How is Vendor Central different to FBA?
Sellers can often confuse Vendor Central and FBA.
There are practical similarities but fundamentally they are completely different programs.
Vendor Central is for sellers who want to sell their products to Amazon, who then sell those products to consumers. Amazon buys inventory from you and is then solely responsible for selling the products to shoppers.
On the other hand, FBA is a fulfilment option for third-party marketplace sellers. First, you send your inventory to an Amazon Fulfillment Center. When an order comes in, Amazon picks, packs and ships it for you. The big difference here is that you are still responsible for selling the products, you are simply paying Amazon to handle the fulfilment process for you. So far so good?
There are interesting similarities between VC and SC that are worth listing.
- Your inventory is stored in an Amazon warehouse
- Your products qualify for Amazon Prime
- Amazon handles shipping and fulfilment
- Amazon handles customer service relating to shipping and fulfilment (e.g., you can request removal of negative feedback)
What’s great about Vendor Central
Amazon orders from you
Amazon purchasing inventory directly from you takes the guesswork out of how much to send in. They’ll tell you!
If you have an EDI (electronic data interchange), you can also connect it directly with Amazon. This can make the process even easier for you. Once you have an account, you can get the Amazon Vendor Central EDI integration documentation.
If Amazon believes that your inventory will move, they may offer you pallet ordering. This of course enables you to move a massive amount of product in a single order and rake in the revenue.
Control over content
Since Amazon recognises you as the manufacturer of the products that you are selling to Amazon, they recognise your content as an authoritative source.
This control is not guaranteed, however - but you do gain the advantage of having an edge if you appeal changes to the content.
This brings us to one of the best aspects of Vendor Central...
A+ Enhanced Brand Content comes standard!
Amazon already recognises you as the manufacturer and authority on your product, so you’ll automatically have the ability to add A+ Enhanced Brand Content pages and a brand store right away.
This is an incredibly useful tool in helping customers understand your product and for the purposes of marketing - including connecting ads directly to products that are frequently purchased with your product.
Good to know: If you are already enrolled in Brand Registry on Seller Central, you already have access to these features.
We have often observed that products shipping from and sold by Amazon (read: Amazon Vendor Central) tend to capture the coveted buy box.
We must stress that this is not a guarantee!
That said, we would be remiss to not bring this up as a very likely possibility for vendors picked up by Vendor Central: you may have a better chance of your product capturing the buy box.
What’s not so great about Vendor Central
In spite of all these great things that Vendor Central offers, there are definite drawbacks that are worth considering if you are debating whether or not to join the platform.
Analytics can be sparse - unless you pay
Not only are the analytics laid out very differently from Seller Central, but also many analytics on Vendor Central are gated behind a paywall.
The Vendor Central analytics platform is known as ARA, or Amazon Retail Analytics. Basic is the information automatically included in membership; Premium is the upgraded package that costs extra.
You can expect to find the following in ARA Basic:
- Customer reviews
- Lead times
- Operational metrics
- Demand forecast
- Sales and inventory dashboard
- Sales and inventory product details
Here’s some of what you can expect to find in ARA Premium:
- Sales performance trends
- Sales diagnostic
- Traffic diagnostic
- Real-time sales
- Forecast and inventory planning
- Amazon search terms
- Repeat purchase behavior
- Market basket analysis
- Item comparison/alternative purchase behavior
- And more
If you have a huge volume of sales, investing in ARA Premium can easily be well worth the cost for the information provided. Especially actionable information is the repeat purchase behavior, the market basket analysis, and item comparisons.
You don’t control the price - Amazon does
You may think you’re covered with your MAP (minimum advertised price), however time and time again Amazon has been observed to invalidate previously agreed to MAPs. Unfortunately, there is nothing you can do about this.
Of course you can agree whether or not to sell the product to Amazon at the price they’re offering, but it isn’t safe to expect that Amazon will ever agree to a higher price than what they initially offer to pay.
We already know the fees that Seller Central charges, but it’s time to get familiar with what Vendor Central will charge you.
Vendor Central will charge you co-op fees for marketing, freight, and damage allowance. These fees combined could range anywhere from 8% to upwards of 20% of the purchase price from you!
The FBA fees on Seller Central may be high, but they are predictable. You can count on the margins for Seller Central.
In order to run coupons or Lightning Deals on Amazon Vendor Central, you must cut into your own margins to cover the cost of whatever discount you would like to run.
You have a product that you sell to Vendor Central for $10.00. You would like to offer a $5 off coupon to entice more customers to purchase the product. In order to make this happen, you will need to pay Amazon $5 per product, which effectively means that Amazon will have purchased your product from you for $5.
How to make Seller Central account and Vendor Central work together for you
Let’s dispel a myth right now: you can absolutely maintain both a Seller Central and a Vendor Central account.
The trick is to make the strengths of both platforms work together.
A good rule of thumb for pricing is this: consider setting prices higher on Seller Central than on Vendor Central.
When Amazon purchases from you on Vendor Central, their pricing will often come within cents of your selling price on Seller Central. If you would like to encourage Amazon to place POs on Vendor Central, make it worth their time and do not undercut their bottom line.
Once upon a time, there was an edge to pursuing Vendor Central advertising over Seller Central (if you were so lucky as to have the option). Nowadays, both offer equally good advertising platforms.
However, you should make sure that neither platform’s campaigns are cannibalising the other. One way to do this is to decide which platform you want to focus on in terms of advertising and place your dollars there.
For example, if you have paid for ARA Premium, it would likely make more sense to put your advertising dollars on Vendor Central. But if you have many years of data on Seller Central advertising, then it may make more sense to keep investing there and retain the longevity of those campaigns.
As of publishing date, both Seller Central and Vendor Central offer Sponsored Products, Brand Display, and Product Display ads. These three types of ads are critical to success on Amazon.
Can I start selling my private label brand using Vendor Central?
Private label can be more difficult to get on Amazon than a unique product that’s in high demand, but it is not impossible!
If your product specifically is popular and Amazon’s algorithm picks up on it, it is entirely possible for a Vendor Central invite to be extended to you.
Over to you
Vendor Central is a great platform for manufacturers who want to sell wholesale.
Sometimes it simply doesn’t make sense for a manufacturer, large or small, to be dealing with small orders to individual customers.
Vendor Central is the ideal platform for manufacturers who want to move large quantities of inventory and have someone else handle the logistics of getting the items to the customer.
Amazon’s model covers marketing fees, damage allowance, and freight allowance.
So how do I get on Vendor Central?
Vendor Central is still invite-only. There is no guaranteed way to acquire an invite (no matter what agencies may say!) and there is no Amazon vendors list available to the public.
Many think that a person has to decide to pick up your product, much like buyers for large department stores. Often, Amazon simply analyses sales data and decides to offer you an invite to become a wholesaler on Vendor Central. Nowadays this is automated, though there are still dedicated (real people) category managers who can manually make decisions about brands.