There are two ways to earn money with Amazon. We cannot only act as independent sellers through Seller Central. You can also choose to sell your products to Amazon directly and have them take care of selling the products for you (Amazon vendor central).
That is the difference between being “Vendor” or “Seller” of Amazon. Depending on the option, each will have its own resource platform.
Let’s take a look at the key differences between each of the options below.
Amazon Seller Central vs. Amazon Vendor Central
The main difference between Amazon Seller Central and Vendor Central is who sells the product to the end customer.
At Vendor Central you sell the products to buyers who work at Amazon, and they are the ones who then resell the products to Amazon users. Here you act as a provider.
In Seller Central, you are the one who manages the inventory, establishes the sale price and you are in charge of making the sale. Here you act as a seller.
Vendor Central, Pros and Cons
In order to sell through Vendor Central, Amazon vendors can only join at the invitation of the corporate team. Once inside, the products will be listed as “sold by Amazon”. This probably offers a confidence boost to buyers.
- Avoid commissions
Selling through Vendor Central avoids the commissions that we normally have in Seller Central, as an example would be the sales commission, which depends on the product category, shipping, which depends on the size of the box or simply taking into account that a program in Seller Central costs € 39 per month. Vendor Central manages shipping and gift wrapping.
Still, despite its obvious advantages, Vendor Central is not without its drawbacks.
- Price Margins
When buying products, Amazon usually does it in large volumes. This makes you a Vendor and will mean that you will be an Amazon supplier and that you must offer the wholesale price. The retail price, in this case, is completely in the hands of Amazon and it is normal that you do not get the expected profit margins on certain products. There are no minimum price policies and for this reason a supplier could even lose money if the price falls too low.
- Inventory Concerns
Being an Amazon supplier also causes major logistical concerns. Amazon can become demanding when it comes to inventory and order fulfillment. New users often have certain difficulties in meeting these levels of demand.
- New product launches
It can be difficult to launch products only using the Vendor Central platform since Amazon has no incentive to buy products for which the potential is not yet known. In other words, new products.
Amazon does not have the knowledge of how the sales of this new product will be made. It could be a highly successful product in the future, but it doesn’t have to be, and Amazon probably won’t place purchase orders on an item without a prior history.
Seller Central, Pros and Cons
At Seller Central, sellers have to do more work and pay more commissions, but they have a little more control than Vendor Central does. You will have to pay various sales commissions, manage prices, carry out promotions, manage inventory, personally communicate with customers, and send the product unless we are using FBA. In the latter case, Amazon would take care of the shipments.
Using Seller Central also gives you access to detailed analytics that will help increase sales and better control returns by directly avoiding unhappy customers.
In addition, price control allows you to take advantage of those periods of high demand, offer offers and other promotions to stay competitive
Sellers typically see fewer sales than vendors. This is because sellers do not have the “sold by Amazon” label.
Although for many sellers, the flexibility offered by Seller Central and margin gains on products more than offset declining sales.
Can I be an Amazon supplier and a seller at the same time?
Yes. If we look at the photos previously published, we can see how the same brand supplies products to Amazon and on the other hand sells products on Amazon. What this means is that this brand has an account in both Seller Central and Vendor central and they themselves choose which products to distribute and sell on each of the platforms. It is also true that on some occasions we have been able to observe that although your case is not wanting to sell to Amazon, they can go to one of your distributors to buy the products from them. In that case, you could play with the margins to compete for the Buy Box and have an advantage in addition to selling under your own brand.
Major takeaways
Both Seller Central and Vendor Central have unique advantages for each modality. For this reason, the one that is most suitable for your brand will depend on the resources you have as a seller, the rates you are willing to pay, and the level of control desired.
We hope you liked our post!
If you have any questions, feel free to ask in the comments section below!
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