Today, we’re comparing Amazon Seller Central vs Vendor Central. If you’re currently selling on Amazon, you most likely started on Seller Central, which is the main entry point for all new vendors. Vendor Central is an invitation-only program, with greater perks but also more conditions and restrictions.
Amazon Seller Central: no entry barriers
With Seller Central, Amazon lists you as a third-party seller. Anyone can open a seller account with Amazon, for a basic fee of $39.99/month to be in their “professional” plan. Sellers are also charged various fees for fulfillment items like transactions, shipping and storage.
An advantage to Seller Central vs Vendor Central is that you have control over your own product listings with this option, including the descriptions and prices.
Seller Central Fulfillment Options
Seller Central puts this central merchandising decision in your hands: you can either stock and ship products yourself, or Amazon will do it for you through its Fulfillment by Amazon (FBA) service.
With FBA, you make bulk shipments of your products to Amazon, which in turn stores those products in its own warehouses. Amazon charges a small storage fee as well as FBA transaction fees with every sale.
The difference in margins vs sales volume can be huge.
While opting out of FBA will save you on all the storage and transaction fees, your higher margins may be eaten up by slower sales. Given the choice, most customers generally prefer going with a product that has free two-day shipping rather than paying a shipping fee and waiting longer for their package to arrive. Thus, having the “Prime” badge on Amazon instantly helps you capture more sales from Prime shoppers who are comparing product choices.
An alternative path to Prime for Professional Sellers
Seller Fulfilled Prime means sellers no longer need to rely on FBA to be granted Prime status.
Whether you currently use FBA, FBM/MFN, or both, there’s a great chance that switching to SFP can help your listings. According to Amazon, seller fulfilled listings that became Prime-eligible for the first time through Seller Fulfilled Prime experienced an average sales uplift of more than 50%.
However, only the best sellers can qualify, and each one must pass a tough trial period fulfilling Prime orders before they can display the Prime badge.
Advantages of Seller Fulfilled Prime
There are several key reasons that sellers may want to jump through all the hoops to qualify for \Seller Fulfilled Prime. It would:
• eliminate FBA shipping and handling fees;
• stop split FBA shipments due to Distributed Inventory Placement;
• retain more control over returns and refund collection;
• enable higher profits on bulky and heavy items, and
• allow sale of certain products that are ineligible for FBA.
Amazon Vendor Central: more privileges, less control.
In Vendor Central, you are becoming an official Amazon vendor in the regular Amazon storefront, with all the rights and privileges thereto. Amazon sends invites to sellers that move a high volume of products, so it’s all about your success as a seller.
As a vendor, you’ll be selling your products to Amazon. You act as the distributor and Amazon is the seller. Your products will enjoy actual Amazon listings, as opposed to the Marketplace’s less trustworthy bazaar of third party sellers. To the customer, it looks the same as if they were buying any other product through Amazon, giving you that trusted brand advantage to sell far more products.
Main differences between Seller Central vs Vendor Central
Seller Central doesn’t allow A+ content, but Vendor Central does.
A+ content is those extended product details and descriptions used for Amazon store products. You can create A+ content yourself using targeted keywords and bullet points, or Amazon will do it for you, but smart product tagging is one of the main keys to success for selling on Amazon.
Vendor Central products will also be eligible for the Amazon Vine program.
This is where some of the top Amazon reviewers write reviews of your product. Positive reviews from the company’s top reviewers are more likely to increase conversion rates.
In Vendor Central, pricing and Inventory aren’t yours to control.
In exchange for the potential of higher product sales, you’re giving up some control when it comes to pricing and your inventory. Since Amazon is selling the product, it will also be setting the price. Vendors can set a minimum advertised price (MAP), but there’s no guarantee that Amazon will follow that. If you have a product that costs you $10 and you set the MAP at $19.99, Amazon could decide that $11.99 is a better price, and there goes your profit margin. Also, you must be able to ship inventory to Amazon quickly. If there is unsold merchandise, Amazon may return it to you.
Note that Amazon controls pricing because of its promise to match any other seller’s pricing of a specific barcode. So if a manufacturer in Vendor Central has its products being sold for a cheaper price than their own, Amazon will change the Vendor’s price to match, and there is no guarantee they will return the price back to the MAP price.
Here’s a table comparing the two programs:
Which option is better?
If you receive an invitation from Amazon to Vendor Central, consider it like an invitation to join the country club: you’ll instantly attain higher status, but the costs can be high too. You’ll need to consider your business’s current situation and goals to make an intelligent choice.
When you make the jump to Amazon Vendor Central, you’re giving up a good deal of control in exchange for higher sales volumes. If you’re set up and capable of selling at that volume, great! Remember that, depending on what Amazon does to your prices, margins can be a lot smaller so figure out your pivot point and then decide.
Amazon Seller Central may not have all the status and privileges, but you’ll have more control over your business and be less subject to Amazon’s mercy. You’ll be able to set your own prices and resolve any customer service issues on your own. And, you can still qualify for the Prime program if you’re able to match Amazon’s performance standards.
Another factor to consider is payments. Seller Central has fast payments, so you don’t need to wait as long for your money after making a sale. With Vendor Central, it can take 60 to 90 days for payments. If cash flow is an issue for your business, consider that one with care.
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