Selling on Amazon can be a confusing business with the number of options available to choose from. Even determining whether to sell on Seller Central or Vendor Central can be a tricky decision if you aren’t aware of the differences between the two.
The fundamental difference between Amazon Vendor Central and Amazon Seller Central is who will be selling your products. With Vendor Central, Amazon’s retail team buys and resells your products to their customers. With Seller CEntral, you are selling directly to Amazon’s customers. Read more to learn the difference between Vendor and Seller Central and which is right for your brand.
What is Amazon’s Seller Central?
For those unaware, Seller Central is a platform used by brands or merchants to market and sell their products on Amazon. You sell your products directly to customers, by either sending your products to Amazon’s fulfilment centres who handle both shipping and returns to customers – known as Fulfilment by Amazon (FBA) – or you can choose to be responsible for all shipping, handling, and customer service and sell straight from your business to the customer – known as Fulfilment by Merchant (FBM). Choosing either way to sell via Seller Central comes with benefits.
- FBA (Fulfilled by Amazon)
Fulfilled By Amazon merchants have automatic access to Amazon Prime customers who tend to spend more on Amazon as a whole. In fact, as of January 2019, US Amazon Prime members were estimated to spend on average $1,400 every year, compared to $600 by non-Prime members. The Amazon Prime badge also gives FBA Sellers an advantage in winning the buy box; the area on a product’s detail page that allows the shopper to add items to the shopping cart. If multiple sellers offer the same product, Amazon favours sellers with Prime (amongst other factors like stock, price and reviews, of course).
- FBM (Fulfilled by Merchant)
On the other hand, Fulfilled By Merchant sellers do not accrue Amazon fulfilment fees. Those using Amazon fulfilment centres must pay a fee for storing products there and the fee depends on the size of the product and duration they stay in the facility. If used correctly, FBM sellers may offer higher profit margins as there are more areas where fees might accrue but might amount to less overall. Another positive of FBM is that you will have more control over how you send your merchandise to your customers meaning you can make orders appear more personalised in order to improve repeat custom. FBM sellers can also achieve the Prime badge through Seller Fulfilled Prime (SFP), yet there are many rules and guidelines from Amazon, most importantly consistent & prompt deliveries. If you can achieve Prime status without using FBA then the fees to Amazon would be far less.
What is Amazon’s Vendor Central?
The other selling platform on Amazon is Vendor Central. This platform is typically used by manufacturers and distributors. Vendors supply products in bulk directly to Amazon, who then sell the product onto the customer under their own brand name, ultimately becoming a distributor for the product. This means that once the products enter Amazon’s warehouse, responsibility for them falls to Amazon, making this form of account highly attractive to any seller who is uninterested in being hands on or dealing with customer service such as returns. Amazon Retail will do this for you. However, Vendor Central is an invite-only option and Amazon ultimately controls the pricing of the product. This means that if your product is a highly sought-after item that will sell well for a good price then Vendor Central may be the perfect approach for you.
Which should I choose: Vendor Central or Seller Central?
In short, the difference between Seller Central and Vendor Central is who you intend to sell to. Seller Central is for merchants to sell directly to customers either using Amazon’s fulfilment centres or their own warehouse, whereas Vendor Central is to directly sell to Amazon. Although most businesses will find themselves starting off as a Seller Central Account, the invitation to Vendor Central does not mean that it is better to use. We found that one of our clients was using Vendor Central but it actually inhibited them from growing sales because of the type of products they were selling. Brands shouldn’t worry too much about reviews though as both accounts have access to a form of review programme; Early Reviewer & Vine, however they do work differently so should be thought about when determining which account is best for your sales model.
Seller Central gives you more control over their product such as price and analytics, meaning whether FBA or FBM, those with a more hands-on marketing strategy may find this account more fruitful. Whereas those who want a simpler focus on selling their products to Amazon without the worry of extra fees such as Carton Content chargebacks & Frustration Free Packaging (FFP) mistakes might find a Vendor Account more suitable. If efficiently managed, sellers can take a hybrid approach and sell both on Seller Central and Vendor Central ultimately benefiting from both, but this would require a good team to run both efficiently.What
- More freedom to control and be proactive with promotions
- More in-depth sales reporting
- Multiple fulfilment options (FBA, SFP, FBM)
- Can control retail pricing
- Able to support customers via messaging
- High fulfilment & storage costs (if using FBA)
- Access to Brand Analytics
- Fulfilment to customer handled by Amazon (unless unless using Drop Shipping)
- Sell products to Amazon who then sell to customer
- Access to all possible search ads
- Able to request Marketing Packages
- Limited control over product pricing
- Slower Payment terms
- Access to ARA Premium (for a cost)
Do you have the right Amazon account for your brand?
If you are unsure about which account would work best for you and your products, Molzi can help. We have experience in providing clients with bespoke Amazon training sessions to improve efficiency and optimise sales. Equally, Molzi can help manage your Amazon accounts for you to help you grow your business online, be that through a Vendor account, Seller account, or a mixture of both to optimise your profits and reduce spend. Get in touch with the Molzi team today!