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You’ve probably already considered selling on Amazon but its way easier than you think.
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With nearly 2 million small and medium-sized businesses selling on Amazon, the Amazon marketplace tops the list of top ecommerce sites in the world.
Selling on Amazon provides global reach and is considered one of the best ways to grow and scale your business online.
To start selling on Amazon, you need to create your Amazon Seller Central account. But do you know this is not the only way to sell products on Amazon.com?
You can also make money on the Amazon marketplace by selling to Amazon via Amazon Vendor Central. What this means is that you sell your products directly to Amazon.
In this article, we will dive into both Amazon Seller Central and Amazon Vendor Central looking at their benefits, drawbacks, and key differences.
Amazon Seller Central is a platform that merchants or third-party sellers can use to market their products directly to customers on the Amazon marketplace.
The seller is responsible for setting up the seller account and maintaining it. On Amazon Seller Central, you have the option of choosing between two selling plans. You can choose to sell with the Individual Selling Plan which comes at a fee of $0.99 for every item sold or the Professional Selling Plan which comes with a monthly subscription of $39.99.
Many sellers prefer the Professional Selling plan, as it comes with an array of features including inventory management, analytical tools, and promotional tools that sellers need to grow and scale their business.
On Amazon Seller Central, sellers also have the luxury of choosing two options for fulfilling orders - Fulfillment by Merchant (FBM) and Fulfillment by Amazon(FBA).
With FBM, you can handle the task of packaging, shipping, returns, and customer service yourself or through third-party logistics (3PLs).
Alternatively, you can save time while Amazon handles everything from storing your products at the Amazon fulfillment center to packaging, shipping, and customer service using the Fulfillment by Amazon (FBA) program.
On the order page, customers will see “Sold by Brand Name” and “Fulfilled by Amazon”.
Related post: How to create an Amazon Seller Central Account in 2024
Amazon Vendor Central is a platform that manufacturers and distributors use to sell their products to Amazon. If you sell your products via Vendor Central, you are a first-party seller, acting as a supplier to Amazon. You sell your products to Amazon in bulk and Amazon resells them to consumers.
However, Amazon Vendor Central is not open to everyone. Registration is by invite-only.
Usually, sellers who use Vendor Central start as third-party sellers on Amazon Seller Central and generate enough demand to get invited by Amazon to register on the platform.
On the order page, customers will see “ships from Amazon” and “Sold by Amazon”.
Here are a few criteria Amazon considers before inviting a seller to register on Amazon Vendor Central:
The major difference between Amazon Vendor Central vs. Seller Central is who sells your product and whom your products are sold to.
With Amazon Vendor Central, you sell your products to Amazon and Amazon resells directly to consumers. It is designed for suppliers and manufacturers who sell large quantities of products directly to Amazon. On the other hand, with Amazon Seller Central, you sell your products directly to consumers. You can set your own prices and manage your own inventory.
As an Amazon Seller, you have unrestricted access. All you need to do is sign up on the Amazon Seller Central portal. On the other hand, you will need an invitation from Amazon to register on Amazon Vendor Central.
You have control over the pricing and profit margin of your product and can create promotional offers, such as discounts or special deals on Amazon Seller Central. You also have full control over their inventory levels and can manage stock.
On the other hand, Amazon gets total control of your pricing and profit margin with Vendor Central. Vendors negotiate prices and promotional terms with Amazon. They do not have the flexibility to change prices or run promotions on their own. Vendors also have limited control over inventory management. Amazon places orders based on anticipated demand, and vendors fulfill these orders from their stock.
With Amazon Vendor Central, Amazon handles the entire shipping process for products sold through Vendor Central. Suppliers send their products to Amazon warehouses, and Amazon takes care of packaging, shipping, and customer returns. On the other hand, Amazon sellers have the option to ship products themselves or use Amazon's FBA service. FBA allows sellers to store their products in Amazon's warehouses, and Amazon handles shipping, customer service, and returns.
Understanding these key differences will help you know which is best for your type of business.
Let's look at the pros and cons that come with selling via Amazon Seller Central and Amazon Vendor Central.
With Amazon Seller Central, you have the flexibility to control your product listings, including pricing, product descriptions, and images. The Amazon Seller Central experience also gives you the freedom to directly manipulate prices. Amazon sellers can adjust their prices to align with other selling channels.
You can change their pricing strategies and adjust prices to compete with top sellers on Amazon. This gives you the opportunity to compete and potentially win the Amazon Buy Box.
Just like with your pricing, you can have direct control over your inventory. You have control over the type of product you want to sell and can also introduce new products.
What's more, you can decide to fulfill orders on your own terms. You can use either Amazon FBA or Amazon FBM or even both depending on the type of product.
Analytical data is pivotal to making profitable business decisions. Thankfully, with Amazon Seller Central, you have access to free analytical data to track sales performance, inventory turnover, and customer behavior. This insight can help you adjust your marketing strategy and make more informed business decisions.
Selling via Amazon Seller Central means paying Amazon fees including referral fees and subscription fees. For low-priced items, this could be challenging as these fees could eat into your profit margin.
Also, if you sell with fulfillment by Amazon (FBA), you will need to pay fulfillment fees depending on the weight and size of your product. Ultimately, this can affect the pricing and profit margin of your product, especially low-priced products.
Handling customer orders, managing inventory, and customer service can be overwhelming, particularly if you are just starting out or if you have a large product catalog. This is coupled with the intense competition in the Amazon marketplace.
Selling your products via Vendor Central means you are the first-party seller and your products are sold by Amazon. When customers see a product sold by Amazon, it increases trust. With your products associated with Amazon, customers will develop a preference for your product.
Amazon Marketing Services (AMS) is an effective advertising tool that provides several features that can help drive demand and traffic to product pages.
While Amazon Marketing Services are available to both Amazon Seller Central users and Vendor Central users, Vendor Central provides access to premium features that aren't available on Seller Central.
As an Amazon Vendor, you can sell your products to Amazon in bulk. This can lead to higher sales volumes and potentially more stable streams of revenue compared to selling your products individually via Amazon Seller Central.
Amazon Vendor Central gives you access to participate in promotional programs like Subscribe and Save and Amazon Vine.
With Amazon Vine, your product gets reviewed by top reviewers before it appears on your Amazon store. These reviews help to build trust, ultimately generating more sales for your business.
Amazon Vendor Central is an invite-only platform with its own criteria meaning that it isn't available to all interested sellers.
While Amazon Seller Central allows you to set your prices almost immediately without supervision, Vendor Central works differently. You can set your wholesale prices but Amazon determines the final prices. In other words, you are handing over your pricing control to Amazon.
Vendors sell products to Amazon rather than directly to consumers, meaning that you lose direct contact with customers. If you are looking at building brand loyalty and gathering customer feedback, this can be a great limitation.
Becoming an Amazon vendor isn’t something you can just decide to do. You will need to get an invitation from Amazon directly. Amazon typically looks for businesses that have demonstrated a consistent ability to sell high-quality products and meet customer demand.
Yes, you can operate both a Vendor Central and Seller Central account on Amazon. This allows you to leverage the strengths of both accounts, combining the benefits of direct selling to Amazon through Vendor Central with the benefits of selling directly to consumers via Amazon Seller Central.
As we have looked at, both platforms come with their pros and cons.
With Amazon Seller Central, you can have a direct influence on the pricing of your product. You can manipulate prices to compete with top sellers and ultimately influence your profit margin. With no interference from a middleman, profit margin rates are also high.
However, with Amazon Vendor Central, you sell your products in bulk to Amazon which then resells your products to customers. While this reduces the workload that comes with relating with individual clients, it can also reduce your profit margin. Amazon has total control of the final price which may ultimately not be favorable.
When it comes to getting paid, you can get paid almost immediately (two weeks maximum) with Amazon Seller Central.
However, with Amazon Vendor Central, money made from sales is transferred to the manufacturer or distributor within two to three months.
Overall, Amazon Seller Central gives you greater flexibility and control over your business. While there is less work involved with Amazon Vendor Central, Amazon gains total control over the process.
Choosing which is better for your business depends on your capacity and type of business. You also want to consider your profit margin and workload. However, to gain access to Amazon Vendor Central, you will need to prove yourself to Amazon.
You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us Now