Seller Central or Vendor Central: the pros and cons
Trying to decide whether to make the move from Seller Central to Vendor Central? In this article we explore what each of them actually are, and the pros and cons of both – so you can decide which is best for you and your business.
What’s the difference between Seller Central and Vendor Central?
Essentially, the key difference is who you are selling your products to. Seller Central means you sell your products as a third party seller (3P) on Amazon to Amazon shoppers . Vendor Central means you have a first party (1P) relationship with Amazon who will buy your products from you and sell them itself.
Why would Amazon invite me to become Vendor Central?
If your products are selling well on the platform, Amazon may offer to start buying large volumes directly from you to sell itself.
This way, they can control the price the item is sold for to the customer, and often they buy in large quantities which means that although you’ll likely take a hit per unit, quantity will mean you’re quids in. Amazon won’t charge the normal seller and fulfilment fees and will also take care of shipping and returns bringing your other costs down.
The item appears as ‘Sold by Amazon’ giving an extra stamp of approval and trust from shoppers to, you get access to their A+ content and other marketing tools, and your products can be part of their ‘Subscribe & Save’ option.
Vendor-sold products are also far more likely to win the Buy Box as the platform will always push its ‘own’ products over third-party sellers.
Sounds great, right?
Are there any downsides to Vendor Central?
While it may seem like a no brainer on the surface, changing from Seller Central to Vendor Central is worth really thinking about.
Becoming a vendor means you’ll have to stick to Amazon’s very strict rules for fulfilling its purchase orders – if you struggle to get stock or fulfil orders quickly, you may be liable to pay the platform large fees as a penalty.
The other thing to remember is that things change quickly on Amazon. They have been known to place large orders which vendors have then rushed to fulfil, only to have the order revised for fewer units. Because they’re a vendor, they then can’t sell the excess stock themselves on Amazon.
What about the pros and cons of Seller Central?
With Seller Central, you have much more control over your listings. You set the price, and can flex this to keep it in line with any competitors.
However, you are responsible for the whole sales process – which can be costly depending on whether you’re fulfilling orders yourself or using Amazon’s FBA service. Either way you will also have to pay Amazon’s seller fees and if you are using FBA, there will be additional fulfilment and storage cost fees.
If you’re a brand and find someone is selling your products on Amazon without authorisation, it’s only as a seller that you can put a stop to this, as long as you are part of Amazon’s brand registry programme.
Finally, one huge pro is the amount of data Amazon shares with you in the backend of your account. This can help you understand who your customers are and where they’re based, which is especially useful if you’re looking to grow your business or expand into new markets.
Can I switch back to Seller Central from Vendor Central?
Technically, yes – but it’s not a straightforward process. You’ll have made contractual commitments to Amazon so will need to review those to see what you can and can’t do.
Some sellers use a hybrid approach of both but again, you’ll need to tread carefully. You don’t want to end up in a situation where you’re selling the same product as a seller and as a vendor – it’s likely not to go down well with Amazon and really, you’re just competing with yourself.
Need some expert advice?
We’re here to help you work out the best way forward for your business. Our team of Amazon experts can support you to weigh up your options and decide the best way forward to take your listings to the next level.
