Acting as an independent seller through Seller Central is not the only way to make money with Amazon. You can also choose to sell your products directly to Amazon and they will sell your products for you.
It’s the difference between being an Amazon Vendor and an Amazon Seller, each of which has its own unique platform and resources.
Not sure which one you should use? Need help switching from one to the other? Let’s take a look at the key differences in each below.
Amazon Seller Central vs. Vendor Central
The biggest difference between Amazon Seller Central and Vendor Central is who actually sells the product to the end customer.
- In Vendor Central or 1P, you sell your products to buyers who work on Amazon, who then list and resell the products to Amazon users. Here you act as a supplier.
- In Seller Central or 3P, you manage the inventory, set the selling price and take care of making the sale in what they call the Marketplace. Here you act as a seller.
What is Vendor Central? Pros and Cons of the Vendor Account
Pro: “Sold by Amazon”
Amazon suppliers can join Vendor Central only through an invitation from the corporate team. Once you’re on board, your products will be listed as “sold by Amazon,” likely offering a boost in buyer confidence.
Pro: avoid commissions
In Vendor Central you avoid the typical commissions of Seller Central, such as sales commission (which depends on the category of the product), shipping (which depends on the weight and size of the box) or even just having the account as a seller which costs 40€ per month. In Vendor Central Amazon takes care of the shipping and gift wrapping.
However, despite its obvious advantages, Vendor Central is not without its drawbacks.
If Amazon buys products from you (probably a large volume of stock) and you become a Vendor, it means that you are an Amazon supplier and therefore you must offer yourself the wholesale price. In this case the retail price is completely in Amazon’s hands and you may not see the profit margins you expected on certain products. There are no minimum pricing policies, so a supplier could technically even lose money if the price drops too low.
Con: Inventory problems
Being an Amazon supplier also comes with some major logistical concerns. Amazon can be quite demanding when it comes to inventory and order fulfillment, and new suppliers often struggle to maintain adequate stock levels.
Con: new product launches
If you are a supplier, it can be difficult to launch products solely using Vendor Central. Amazon has no incentive to buy that product because they don’t yet know the potential of the new product.
Amazon is not sure how sales will be realized. It could be a successful product in the future, but Amazon is unlikely to place purchase orders on an item with no history.
What is Seller Central? Pros and cons of the Seller account
Pro: more control
Although sellers have to do more work (and pay more commissions), they tend to have a bit more control than their Vendor Central counterparts. They will have to pay various commissions per sale, manage their own selling prices, run promotions, manage inventory, communicate with customers, and ship product (unless you pay more for FBA and then Amazon takes over).
Pro: better analysis
In Seller Central you also get access to detailed analytics that can help you increase your sales and can better control your returns by avoiding unhappy customers directly. In addition, price control allows you to easily take advantage of periods of high demand or offer deals, which is vital for staying competitive in the vacation season.
Con: No “Sold by Amazon”
However, in general, sellers often see fewer sales than suppliers, simply because they don’t have the “sold by Amazon” backing. For many sellers, the flexibility of Seller Central and the gain in product margin offsets that decrease in sales.ç
Can I be an Amazon supplier and a seller at the same time?
The answer is yes. If you look at the two pictures we have posted above, the same brand supplies products to Amazon and on the other hand sells products on Amazon. This means that this brand has an account in Vendor Central and Seller Central and they are the ones who choose which products to distribute on each platform. But the truth is that sometimes we have found that even if you do not want to sell products to Amazon, Amazon can go to one of your distributors and buy stock from them. In this case you play with advantages since as a brand you have better margins to compete with Amazon. Do not forget that Amazon is a marketplace and in addition to selling you as a brand and Amazon itself, you can find all those other retailers offering the same product.
Vendor Central vs. Seller Central Summary
Let’s make a brief summary about Amazon Vendor Central and Seller Central:
- Access – Vendor Central: invitation only, Seller Central: open to any seller.
- Pricing – Vendor Central: controlled by Amazon, Seller Central: controlled by the seller
- Marketing – Same tools.
- Sales – Vendor Central: Sells to Amazon, Seller Central: Sells to Amazon customers
- Logistics – Vendor Central: comply with Amazon’s logistics process; Seller Central: sellers control their own logistics or use FBA
- Courier – Vendor Central: Amazon manages the courier and returns, Seller Central: sellers manage courier and returns
- Analytics – Vendor Central: no data (unless you pay to access Amazon Retail Analytics program), Seller Central: robust analytics to improve sales and marketing efforts
- Fees – Vendor Central: you pay nothing, Seller Central: $40 per month for professional sellers or free for individuals.
While you can’t choose to become an Amazon vendor, it’s important to study these pros and cons in case you are offered an invitation to the platform.
Both Vendor Central and Seller Central have unique benefits, so which one is right for your brand will depend on your resources as a seller, the level of control you want, and the fees you are willing to pay.
Save time in this process with our platform where Amazon sellers can save 60% time optimizing product detail pages, be 50% more effective following Amazon’s Style Guides and increase their sales by 30%. Get a free audit and start optimizing your listings now! Take advantage of it.
Leave a Comment