Selling your products on Amazon comes with many Amazon fulfillment options, including picking between Vendor Central and Seller Central.
The point of contact who sells your products is the most significant distinction between Amazon Vendor Central and Amazon Seller Central. If you select Vendor Central, Amazon will purchase your products from you and resale them to their customers. Seller Central allows you to sell your products directly to customers via the Amazon marketplace.
This essay is meant to explain the full breadth, benefits, and drawbacks of each so that you can make an informed decision about which option best meets the needs of your firm.
What exactly is Amazon Seller Central?
Amazon Seller Central is the interface that merchants use to market and sell their products directly to customers on Amazon. A marketplace or third-party Amazon seller has an Amazon Seller Central account (3P). The Amazon seller is in charge of creating and maintaining their seller account.
Amazon provides both personal and professional seller accounts. While professional seller accounts need a monthly subscription, most businesses will choose them since they offer analytics tools, preferential marketing treatment, and a boatload of additional capabilities that a professional Amazon seller will require to develop their business.
As a third-party Amazon seller, you have two options for fulfilling orders on the Amazon marketplace. You can handle all aspects of shipping, customer service, and refunds for your orders or outsource them to a third-party logistics provider (3PL).
Amazon Fulfilled by Merchant is the name of this program (FBM). You can also outsource this procedure to Amazon by joining the Fulfilled by Amazon (FBA) program. If you use FBA, you can add your company name on the order page; when your customers buy your products, they will read “sold by BRAND X and Fulfilled by Amazon.”
The number of successful FBA sellers is increasing, and there is a growing interest in purchasing FBA firms.
Choosing the Best Amazon Fulfillment Option
This article goes over the various Amazon fulfillment choices in detail.
A summary of Amazon Seller Central advantages:
- Anyone is welcome.
- Command of the seller’s account
- Sell to Amazon customers directly.
- Logistical choices that are adaptable
- Quick payment terms
- The brand determines retail pricing.
- Advertising possibilities are limited.
- Enhanced Brand Content Complex Sales Process
What exactly is Amazon Vendor Central?
Direct manufacturers and distributors are the most common users of Amazon Vendor Central. You are a first-party seller if you sell through Vendor Central. If you are the provider, sell your products in bulk directly to Amazon.
Vendor Central registration is strictly by invitation only. Sellers frequently begin with Seller Central and develop demand for their products to encourage Amazon to buy in quantity through the Vendor Central program, similar to other eCommerce or brick-and-mortar retail channels (i.e., Walmart, Target, Bestbuy).
The line “shipped from and sold by Amazon” appears on the order page if a company sells through Vendor Central.
A summary of Amazon Vendor Central advantages:
- Only invitees
- Bulk sales to Amazon
- Fixed logistical alternatives
- Standard payment terms
- Amazon has complete retail pricing control.
- Several advertising options
- The traditional sales procedure
- Excellent content
The Distinctions Between Seller Central and Vendor Central
Amazon Vendor Central Advantages
Selling your products as a first-party seller through Vendor Central ensures client trust due to Amazon’s brand reputation. Customers would likely feel more secure and confident if they place their buy through the Amazon platform instead of a third-party site with less brand recognition.
More advertising possibilities
Amazon Marketing Services (AMS) can give businesses a powerful tool that includes a variety of choices for bringing products in front of customers.
It enables vendors to build demand with keyword-targeted ad campaigns designed to increase traffic to certain Amazon product pages. Sellers and vendors can access AMS, but Vendor Central offers more robust options for conducting ad campaigns using AMS.
It is critical for success to manage advertising campaigns and strategically type keywords into your product page.
Business model simplification
Working with Amazon is more accessible through Vendor Central than with Seller Central. The vendor’s primary focus is filling Amazon orders, billing, and preventing chargebacks. As a seller, you are accountable for sales reconciliation, lost inventory, tax liabilities, and other expenditures.
A significant buyer on Amazon is significantly more straightforward than dealing with hundreds, if not thousands, of individual buyers that an Amazon seller may face through Seller Central.
Content and marketing tools have been improved.
If you sell through Amazon Vendor Central, you can participate in promotional programs such as Subscribe & Save (an Amazon-based subscription service) and Amazon Vine, which sends your products to top reviewers before they appear on the Amazon storefront.
User-created content can significantly increase brand trust and generate more sales with a growing emphasis on consumer feedback’s importance in product quality.
Amazon Vendor Central Drawbacks
Amazon does not closely follow to manufacturer’s Minimum Advertised Pricing (MAP) requirements. This indicates that Amazon can change its retail prices based on internal algorithms at any time. This could cost a seller extra income if it reduces their margins.
Amazon has very particular and stringent rules for filling purchase orders. Vendors who have difficulty keeping stock or swiftly fulfilling orders may face considerable chargebacks, which can affect Amazon merchants’ profits.
Sales channel diversification is lacking.
Amazon is frequently the most significant single buyer for numerous brands/sellers. While this can be advantageous for business, it is also hazardous for sellers to rely on a single buyer. Experienced merchants prefer numerous sales channels, with most of their purchases coming from their eCommerce storefront.
Amazon abruptly stopped buying from several merchants in early 2019 without notice or explanation. Many retailers were left rushing to make up for missed sales revenue.
Brand control loss
When used and handled effectively, product or company branding can be a big difference and benefit for sellers. However, once they sell to Amazon through the Vendor Central program, Amazon vendors lose a lot of control over their brand messaging.
Sellers lose control over how their product is represented on Amazon, products are supplied in a brown Amazon box, and sellers’ ability to customize the consumer experience is limited.
Amazon Seller Central Advantages
Seller Central offers a large amount of consumer data at no cost to the seller. You have access to Amazon customer data that can help you better understand consumer and product trends, such as who is buying products and where they are located.
This can be extremely useful when selecting a third-party logistics (3PL) provider, evaluating where it is best to ship from, and determining whether dividing inventory across numerous fulfillment centers could assist save money and minimizing travel time.
As the seller, you have the freedom to control the price you set, so you can retain consistency if you use other selling channels besides Amazon. Additionally, if you need to adjust your price to match a rival, that can be enabled immediately.
Sometimes sellers realize that their retail partners or illegitimate third-party sellers are selling outdated versions of their products without their permission. These listings often offer a minimal amount of material and photographs.
The only way to control and prevent these illicit listings is to have a Seller Central account registered with Amazon’s brand registry program.
Adapting to your client’s wants can make or destroy your small to medium-sized business. This is especially true if you only sell a small quantity of your product. Physical control over your inventory allows you to respond to market demands (consumer or vendor).
Amazon Seller Central Drawbacks
Costs of fulfillment
Fulfillment and delivery costs might often make it difficult to sell lower-priced items on Amazon. The current minimum charge for non-media FBA items weighing one pound or less is $2.41, not including the commission that Amazon charges.
These can easily add up depending on the size and weight of your products. You’ll need to comprehend the Amazon FBA fees and factor them into your decision-making process.
Marketing and sales
While being in charge of your own sales and marketing is essential for many Amazon sellers, some may lack the resources or knowledge to do so. The Amazon seller, like any other solo storefront in the Amazon marketplace, will need to regularly manage the store by updating the product description, selling their products through multiple channels, and responding to consumer behavior.
Fees for referrals
All products sold through the central seller program are subject to a referral fee paid to Amazon for each item sold. The referral fee is calculated as a percentage of the product’s sale price, excluding taxes. These fees vary by product type and range from 5% to 20% of the product’s selling price.
Fees can range from 30% to 45% but are usually related to Amazon products or services, including Amazon device accessories. These costs, which can be significant depending on the category, eat into the merchant’s profits.
Fulfilled by Amazon (FBA), Seller Fulfilled Prime (SFP), or Merchant Fulfilled Network are all examples of Amazon Seller Central (MFN)
You have three options for order fulfillment as a third-party seller in the Amazon Seller Central program. Fulfilled by Amazon (FBA) is a service that allows Amazon to store and fulfill your orders from its warehouses. This service handles millions of orders per month on behalf of third-party retailers.
Seller Fulfilled Prime (SFP) and Merchant Fulfilled Network (MFN) are programs in which a third-party seller chooses to store and fulfill Amazon orders either directly or through a third-party logistics company (3PL) that they hire and manage.
All three Amazon Seller Central programs have advantages and disadvantages, which we discussed in depth in our article Choosing the Best Amazon Fulfillment. You might also be interested in The Amazon 3PL Trap, and 6 Advantages of Using Amazon Seller Fulfilled Prime.
Bottom Line: Why Does Your Choice Matter?
Amazon is gradually becoming the first website that customers consult when making purchasing selections. If a company does not develop a strategy to reach these customers, it may miss out on a significant portion of the internet economy.
It is vital to develop an Amazon-specific marketing strategy to ensure that you get the most out of your eCommerce business.