So we already know that Amazon can be a beast to navigate. The different type of seller accounts can only add to the problem. How do you know if Seller Central or Vendor Central is right for you? In many cases, that choice is already decided for you by Amazon itself. In other cases, you may have a choice depending on the type of products you sell and the volumes of those products.
All Amazon marketplaces are not created equal. Vendor central and Seller central have some similarities, but they are more different than they are alike. Amazon’s Vendor Central is more of a typical reseller structure. Amazon buys your products, sells them at a price that they deem to be appropriate, and then they will pay you back. Vendor central is invite-only and it’s generally reserved for larger manufacturers and well-known brands. Amazon Seller Central allows third-party sellers to list products on Amazon’s marketplace. With Seller Central, you have a couple of options for how you can choose to get your product to the customer. Most sellers use Fulfilled by Amazon or FBA, in order to leverage Amazon’s Prime shipping. The most notable difference with Seller Central is that anyone can use it, yes, even the people currently using Vendor Central. That’s a hybrid account – more on that later.
Sellers who opt for Seller Central have the advantage of retaining full control over their product listings and pricing. So what’s the big deal about Vendor vs Seller? At face value, Vendor Central might seem like less work for the seller and therefore the better option, but in many cases the opposite is true. For one, payouts to the seller are slow compared to Seller Central. Vendor Central contracts are paid with invoices on net 60 terms. However, if Amazon pays you in 30 days or less, then they give themselves a 2% discount.
That may not be a big deal to some companies but having control over your pricing is definitely a pain point for most businesses. Vendor central is completely inflexible when it comes to the pricing of your product. Many businesses have a hard time trying to get Amazon to follow their Minimum Advertised Price (MAP) policy. This, in turn, makes MAP pricing difficult to enforce with other resellers. In addition to maintaining a fair price for your products, you have to make sure that you are monitoring Amazon’s charges vigilantly. They are notorious for billing you first and asking questions later, and it’s not uncommon for most of the charges to be mistaken. Recouping your money can be a long and arduous process. Not to mention that Amazon offers no customer service for sellers on Vendor Central.
This brings up another important factor for selling and managing an account on Vendor Central. This side of the marketplace doesn’t allow you to contact a customer. This means you’re missing out on valuable information like how the order process went, customer demographics or even feedback on your products. As a result, you as a business owner have no control over customer service. If there is a problem with shipping or quality control you don’t have the ability to contact the customer to make it right. Research has shown, that for every customer who takes action to complain, there are anywhere from 12 to 26 customers that remain silent. Hard truth: Customers are far more likely to tell their friends about a negative experience and encourage them to not buy from you. Of course, happy customers are also great evangelists for your product or service too, but negative reviews and reports can have a more significant impact on your business when it comes to Amazon listings. Seller Central gives you more control over the way your company interacts with customers, but the happy and unhappy ones. With reviews being akin to gold on Amazon, this is invaluable.
For some larger retailers, Vendor Central is a smart choice for their business model, however many other retailers are making the switch to Seller Central with great results. When playing on such a big marketplace by Amazon’s rules, it is to your advantage to make sure that you have the ability to control and manage as much of your business as possible. Seller Central allows you to do just that, making it a better choice for many businesses.