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Third-party sellers sell on Amazon via Seller Central and sell their goods directly to their customers. Amazon merely plays the role of a marketplace. Promising Seller over time often receive an invitation to the Vendor program. Vendors no longer sell their goods to end customers, but to Amazon. With this step, the retailer takes on the role of a supplier, because after selling the goods to Amazon, Amazon is the owner and sells the products on the marketplace. But what advantages do vendors have over sellers? The following article highlights the advantages and disadvantages of both programs and provides an insight into which program may be worthwhile for whom.

What is Seller Central?

Seller Central is used by third-party sellers to sell products on the Amazon marketplace for sale. By placing their goods there, retailers largely control the sale of these themselves. They set the prices of their products, manage storage and shipping as well as customer service, returns and refunds. Using Seller Central currently costs 39 euros per month (as of January 2019: Professional tariff).

One option that is available to every seller is to use Amazon FBA (shipping by Amazon) for an additional fee. In this case, the goods can be stored in Amazon's warehouses. Amazon also takes care of shipping the goods when the order is received, customer service, the Returns management and other optional services where applicable. You can find more detailed information on this topic in the Article about Amazon FBA. It is important to note that even when using FBA, the goods always belong to the retailer until they are sold to the end customer and the retailer remains the seller of the goods.

What is Vendor Central?

Entry into the Vendor program only takes place by invitation from Amazon. Promising third-party sellers, often manufacturers of well-known brands, are invited to join the program and advance from third-party seller to first-time seller. By accepting the invitation, the retailer assumes the role of a supplier and regularly supplies Amazon with its own goods. Amazon buys these from the vendor and sells them on Amazon itself. Amazon becomes the owner of the goods through the purchase, and the vendor can no longer access the corresponding products. Amazon is listed as the seller and shipper of the goods. Similar to the FBA program, the entire sales process is also handled by Amazon. In addition Vendor Central users benefit from some advantages that are not available to sellers.

Advantages and disadvantages of the programs

Of course, both models have advantages and disadvantages. Especially the Vendor program, which may seem tempting at first glance, has a number of aspects that you should be aware of before rashly accepting the invitation. Especially as it is not easy to go back to Seller Central. The advantages and disadvantages of both programs are explained in detail below.

Advantages of Seller Central

  • Simplicity: Anyone can register in Seller Central, list their own products and start selling for a monthly fee
  • Control: The retailer has full control over its inventory, pricing, shipping and customer service
  • Customer contact: The seller can establish contact with his customers and thus gain customer data and direct feedback on the products
  • Prompt payment: The retailer receives payment for the products sold promptly (usually within 7 to 14 days)
  • Shipping through Amazon: With FBA, a seller can also have Amazon carry out storage and shipping processing if desired
  • Statistics: Sellers have free access to analyses of their sales and the demand for their products
  • Service: Amazon offers comprehensive service and support for Seller Central users

Disadvantages of Seller Central

  • Expenditure: If you decide not to use FBA, you will have to pay for storage, shipping and delivery, Returns managementinvoicing, etc. may involve a lot of work
  • Pricing: On the one hand, setting your own prices is an advantage for sellers, but it can be very time-consuming, especially when it comes to a place in the Buy Box. In this case, additional re-pricing tools are often necessary to regularly adjust prices
  • Amazon Prime: As a seller, your own products can only be Prime-qualified if FBA is used
  • Limited marketing: As a seller, only limited marketing measures are possible on Amazon

Advantages of Vendor Central

  • Customer confidence: Customers often trust Amazon more than unknown third-party sellers, which often increases the likelihood of purchase when products are sold and shipped by Amazon
  • A+ Content: Vendors are the A+ Content which enables a significant expansion of the product description with additional texts, videos and zoomable images
  • Expanded marketing: Additional marketing measures are available to vendors, such as participation in the Vine program
  • Amazon Prime: If the provider participates in the vendor program, the products are automatically Prime-qualified
  • Storage and shipping by Amazon: From storage to sale and delivery of the goods, Amazon takes care of the entire shipping process. The seller only has to send the goods to Amazon regularly

Disadvantages of Vendor Central

  • Analyses cost money: Vendors have to pay extra to receive similar analyses and statistics on sales and demand that are available to sellers free of charge
  • No customer contact: Customer contact is completely taken out of your hands. This means that no feedback can be obtained, no customer data can be collected and no customer relationship can be established
  • Pricing by Amazon: Control over the price of its own products is also handed over to Amazon, which often leads to very competitive (and correspondingly low) pricing
  • Frequent deliveries: Amazon usually has to be supplied with new goods twice a week to different warehouses
  • Dependence: The vendor program requires a high level of discipline, as Amazon charges penalties for even minor violations of the delivery and packaging guidelines. It is not easy to withdraw from Seller Central
  • Late payouts: It can take up to 90 days before the vendor is paid out by Amazon
  • Hardly any service: Amazon does not offer vendors anywhere near the comprehensive service and help that is offered to sellers

Which program is worthwhile for whom?

According to the explanations of the both programs the question arises as to which is best suited for whom. First of all, it can be said that Seller Central is more suitable for retailers, while Vendor Central is aimed more at manufacturers. The Vendor program can certainly lead to a significant increase in sales for large manufacturers if there is no problem with the aspect that control is completely handed over to Amazon and the role of a supplier is assumed.

Seller Central, on the other hand, is suitable for small and medium-sized companies. Amazon FBA does not only offer advantages, but those who want Amazon to handle shipping and thus qualify for Prime can choose this as an alternative. If you sell your own brand on Amazon, you can also benefit from the option of EBC (Enhanced Brand Content) and a Brand Store as a seller. If you are not yet sure whether you should sell via Seller Central or Vendor Central, then you are welcome to arrange a consultation with us at Amazon Agency book.

Conclusion on Seller Central vs. Vendor Central

The comparison shows that the invitation to the Vendor program should not be rushed into. The fact that Amazon invites a merchant to join the program does not necessarily mean that Vendor Central is the best option for them. It is important to be aware of the advantages as well as the disadvantages and the commitment that comes with the decision. It can be said that Seller Central is a good option for anyone who wants to sell products on Amazon. Sellers do not have exclusive benefits such as A+ content or special marketing measures, but there are no serious disadvantages either. Those who use the Shipping through Amazon (FBA) can also benefit as a seller from storage and shipping processing by Amazon. However, large manufacturers who have no problem handing over control to Amazon can often further increase their sales and turnover on Amazon by taking the step towards Vendor Central.

 

What is Seller Central?

Seller Central is used by third-party sellers to sell products on the Amazon marketplace. By listing their goods there, sellers largely control the sale of these themselves.

What is Vendor Central?

Entry into the vendor program is by invitation only from Amazon. Promising third-party vendors, often manufacturers of well-known brands, are invited to join the program and advance from third-party vendor to first-time vendor.

Third party vendors sell on Amazon through Seller Central and sell their goods directly to their customers. Amazon merely plays the role of a marketplace. Over time, promising sellers often receive an invitation to join the vendor program. Vendors no longer sell their goods to end customers, but to Amazon. With this step, the vendor takes on the role of a provider, because after the goods have been sold to Amazon, Amazon is the owner and sells the products on the marketplace. But what advantages do vendors have compared to sellers? The following article highlights the advantages and disadvantages of both programs and gives an insight into which program can be worthwhile for whom.

What is Seller Central?

Seller Central is used by third-party vendors to sell products on the Amazon Marketplace. By posting their products there, merchants control the sale of these products as far as possible by themselves. They set the prices of their products, manage storage and shipping, customer service, returns and refunds. The use of Seller Central currently costs 39 Euros per month (as of January 2019: Professional rate).

One of the options open to every Seller is to use Amazon FBA (shipping through Amazon) for an additional fee. In this case the goods can be stored in Amazon's warehouses. Amazon also handles the dispatch of the goods upon receipt of the order, customer service, returns management and, if necessary, other optional services. You can find more detailed information on this topic in the article about Amazon FBA. It is important to remember that even when FBA is used, the goods always belong to the merchant until they are sold to the end customer, and the merchant remains the seller of the goods.

What is Vendor Central?

Access to the Vendor Program is only available upon invitation from Amazon. High potential third party vendors, often manufacturers of well-known brands, are invited to join the program and move up from being a third party vendor to being an initial vendor. By accepting the invitation, the vendor assumes the role of a provider and regularly supplies Amazon with its own goods. Amazon buys these from the supplier and sells them themselves on Amazon. Through the purchase, Amazon becomes the owner of the goods and the supplier can no longer access the corresponding products. Amazon is listed as the seller and sender of the goods. Similar to the FBA program, the entire sales process is also regulated by Amazon. Additionally, Vendor Central users can benefit from several advantages that are not available to sellers.

Advantages and disadvantages of the programs

Of course, both of these models have advantages and disadvantages. Especially the vendor program, which can be quite tempting at first sight, involves a number of aspects that one should be aware of before accepting the invitation hastily. Especially since the step back to Seller Central is not possible without further ado. In the following you will find a detailed explanation of the advantages and disadvantages of both programs.

Advantages of Seller Central

SimplicityAnyone can register at Seller Central, list their own products and start selling for a monthly fee

Control: The retailer has full control over his inventory, pricing, shipping and customer service

Customer contact: The seller can establish contact with his customers and thus gain customer data and direct feedback on the products

Prompt paymentThe merchant receives payment for the products sold promptly (usually within 7 to 14 days)

Shipping through Amazon: With FBA, even a seller can have storage and shipping handled by Amazon on request

Statistics: Sellers have free access to analyses of their sales and the demand for their products

ServiceAmazon offers comprehensive service and support for Seller Central users

Disadvantages of Seller Central

CostsIf you decide not to use FBA, you may have to deal with storage, shipping, returns management, invoicing, etc.

PricingOn the one hand, having your own pricing is an advantage for sellers, but can be very costly, especially when it involves a place in the Buy Box. In this case, additional re-pricing tools are often necessary to adjust prices regularly

Amazon Prime: As a seller, your own products can only be qualified as prime if FBA is used

Limited marketingOnly limited marketing activities are possible as a seller on Amazon

Advantages of Vendor Central

Customer trust: Customers often have more trust in Amazon than they do in unknown third parties, which means that the likelihood of purchase is often higher when Amazon products are sold and shipped

A+ ContentThe A+ Content is available to vendors, which enables a significant expansion of the product description with additional text, videos and zoomable images

Expanded marketing: Vendors have access to additional marketing measures, such as participation in the Vine program

Amazon PrimeIf the vendor participates in the vendor program, the products are automatically prime-qualified

Storage and shipping by AmazonFrom storage to sale and delivery of the goods, Amazon takes care of the entire shipping process. The supplier only has to send the goods to Amazon regularly

Disadvantages of Vendor Central

Analyzes cost money: In order to get similar analyses and statistics on sales and demand as those provided free of charge to sellers, vendors have to pay extra

No customer contactCustomer contact is completely out of hands. This means that no feedback can be obtained, no customer data collected and no customer relationship established

Pricing through AmazonThe control over the price of their own products is also transferred to Amazon, which often leads to very competitive (and correspondingly lower) pricing

Frequent deliveries: Amazon usually needs to be supplied with new goods to different warehouses twice a week

DependenceThe vendor program requires a high level of discipline, as Amazon charges penalties for even minor violations of the delivery and packaging guidelines. Withdrawal from the Seller Central is not possible without further ado.

Late payouts: It can take up to 90 days before the vendor is paid out by Amazon

Hardly any service: Amazon offers vendors nowhere near the comprehensive service and help that sellers are offered

Which program is beneficial for whom?

After the explanations of the two programs you have to decide which one is best suited for whom. First of all, it can be stated that Seller Central is more suitable for retailers, while Vendor Central is more suitable for manufacturers. The Vendor Program can certainly lead to a significant increase in sales for large manufacturers, if there is no problem with the aspect that control is completely transferred to Amazon and the role of a supplier is taken over.

Seller Central, on the other hand, is suitable for small and medium-sized companies. Amazon FBA also not only has its advantages, but those who wish to have Amazon's shipping processing and thus the prime qualification can choose this as an alternative. Anyone who sells their own brand on Amazon can already benefit as a Seller from the possibility of EBC (Enhanced Brand Content) and a Brand Store.

Conclusion

The comparison shows that the invitation to join the vendor program should not be accepted in a hurry. The fact that Amazon is inviting a vendor to join the program does not necessarily mean that Vendor Central is the best option for them. It is important to be aware of the benefits as well as the downsides and the commitment that comes with the decision. It can be said that Seller Central is a great option for anyone who wants to sell products on Amazon. While there are no exclusive advantages such as A+ content or special marketing measures available to sellers, there are no serious disadvantages. If you use Amazon Shipping (FBA), you can also take advantage of Amazon's storage and shipping services as a Seller. However, large manufacturers who do not have a problem with the control transfer to Amazon can often further increase their sales and turnover on Amazon by taking the step towards the Vendor Central.

Tobias Dziuba

My name is Tobias and I am the founder and managing director of the Amazon agency Adsmasters GmbH based in Düsseldorf.

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