From the outside, it can look like all sellers on Amazon are the same and have the same seller experience. Newsflash – they’re not. There are actually two options on Amazon that allow sellers to manage and sell their inventory: Seller Central and Vendor Central. Marketing-approved names aside, these selling options offer a variety of different advantages as well as some downsides. This article will take a look at the two different ‘Amazon Centrals’ and highlight the various pros and cons of each.
Seller Central is the open-to-all-sellers program that allows merchants to sell directly to customers through the Amazon marketplace. Typical Seller Central vendors are selling smaller quantities of merchandise, which allows for a little more flexibility when it comes to the logistics and shipping. Brands leveraging Seller Central can choose between fulfilling shipments themselves (aka handling shipping, processing returns, and providing customer service when necessary) and the Fulfilled by Amazon program which turns all of these logistics duties to Amazon.
Because Seller Central has no barriers to entry, any vendor looking to sell on Amazon can be included. This means there is a lot more freedom and flexibility around pricing, product listings, and other important decisions such as these. Without Amazon acting as the middleman wholesaler, vendors on Seller Central can avoid any fees associated with the vendor partnership (which can often reach up to 50%). Seller Central brands can also control the pricing of their products and proactively avoid MAP policy violations up front. While brands on Seller Central typically move fewer products than those on Vendor Central, there is a higher profit margin per unit that makes up for the difference.
Vendor Central, on the other hand, is an invite-only program specifically for brands and manufacturers selling on Amazon. These include in-house and name brands that produce and move a huge volume of products on the Amazon marketplace in a short amount of time. In this scenario, Amazon is actually buying product directly from the brands and manufacturers and storing it in Amazon-owned warehouses. Amazon is now the ‘seller’, and handles all of the details during the logistics process, including customer service and returns. Brands on Vendor Central tend to be larger and have the resources necessary to efficiently leverage Amazon as a third party vendor.
Of course, the biggest drawback with Vendor Central is the lack of control and visibility into the sales process. Because Amazon is the ‘seller’ in the marketplace (look for the phrase “sold by Amazon.com” on the product listing), it can set the price for specific products without discussing anything with the brand beforehand. Amazon also doesn’t have to share revenue with Vendor Central brands since it purchased the product wholesale upfront. Typically, sellers on Vendor Central see smaller margins because of this lack of control, but they also have access to Amazon’s myriad of marketing assets. From A+ content to the Brand Registry, Vendor Central gives brands the ability to take advantage of all Amazon has to offer.
When it comes time to make the choice between Seller and Vendor central (if it’s not already made for you based on your seller criteria), your decision will most likely be based on whether or not you want to hand over the reins of your brand to a giant like Amazon. This is where single vendor relationships come into play. Let SupplyKick take your Amazon selling experience to the next level – learn more today!