Amazon vendor central vs. seller central: which one is better for you? Before starting your Amazon journey, you should know about these two platforms offered to businesses by Amazon, the world’s largest online marketplace. Each one of them has its unique features, advantages, and disadvantages that provide sellers with a varying degree of flexibility in the process of selling their products and managing customers.
If you intend to sell on Amazon, you should know the difference between seller central and vendor central and choose one of them for your business. And you can’t just pick either one of them on a whim. There are some nuances to it. Whether you should use vendor central or seller central depends on various factors like business model, operational capabilities, product type, and strategic objectives.
Each platform has its unique perks, challenges, and demands and the choice between them can potentially impact your growth and profitability on Amazon. So, you should have a comprehensive knowledge of both platforms and this article is just about that.
We have first covered every aspect of both platforms and then compared them so you can have a clear concept of the details. Lastly, we have elaborated how a consultant can help you make the best choice in this regard. Let’s get started to make the comparison: Amazon Vendor Central vs. Seller Central.
What is Amazon Vendor Central?
Amazon vendor central is an invite-only platform where businesses termed as “vendors” sell their products wholesale to Amazon and Amazon takes the responsibility for selling, shipping, and customer service. Vendors receive purchase orders from Amazon. They fulfill the orders and provide inventory to Amazon which then takes care of product listing, selling, and support.
Advantages of Amazon Vendor Central
Amazon is your customer. As Amazon buys directly from vendors, you can expect consistent bulk orders and ultimately higher sales and revenue.
Customers deem you credible. Products under vendor central are labelled as “sold by Amazon” and “shipped by Amazon” which increases customers’ trust in your brand and company.
You have access to exclusive marketing tools. Vendors have access to various marketing tools like Amazon Vine, Subscribe and Save, Prime Exclusive Discounts, etc. that are not available for other sellers. These tools help you increase your visibility and grow your business.
Amazon manages logistics. Amazon takes care of shipping your product and managing your customers so that you don’t waste time on these tasks and focus on growing your business.
Drawbacks of Amazon Vendor Central
You have limited control over pricing. As Amazon applies its retail pricing strategy to all products, you have minimal say in the final pricing of your product.
Vendors rely on Amazon for orders. They largely depend on Amazon placing purchase orders. So, your business can be affected by any change in ordering patterns or delay in payments.
You can’t manage different aspects of sales. As a vendor, you are bound to the terms and conditions of the arrangement with Amazon. All you do is provide products to Amazon. From there on, you don’t get to decide how your products are sold.
Higher costs might apply. As a vendor, you may need to pay additionally for services like marketing costs, Amazon chargebacks, fees, etc. which can impact your bottom line.
Now that we have seen the pros and cons of vendor central, let’s have a look at seller central too.
What is Amazon Seller Central?
Amazon seller central allows you to sell products directly to consumers. Unlike vendor central, any business or individual seller can sign up for a seller account and start selling its products worldwide. The control of pricing, marketing, inventory, and customer service is directly in control of the seller. With seller central, you are responsible for your growth.
Advantages of Amazon Seller Central
You control pricing and inventory. Sellers have the flexibility to increase or decrease the price of their products and run inventory according to their own demands and needs.
Customers directly interact with you. Seller central allows you to directly engage with your customers. This opportunity can be leveraged for nurturing relationships, promoting your products, soliciting customer reviews, and offering customer service.
Payments are processed faster. Vendor central usually has longer payment terms while in the case of seller central, the payment is cleared within two weeks, thus ensuring improved cash flow.
You can sell more products. Seller central allows sellers to sell products belonging to a broad range of categories. This feature can be capitalized by diversifying income sources.
Drawbacks of Amazon Seller Central
Operational management is more demanding. Complete control over selling means that the responsibility of managing inventory, marketing, shipping, and customer service falls directly on the shoulders of the seller. This can be daunting if your business doesn’t have the requisite operational capabilities.
You compete with more sellers. Sellers are in much greater number than vendors. So, there is strong competition among them for visibility and sales.
Seller fees are applicable. Amazon charges a fee for each item you sell. If you use additional services like fulfillment by Amazon (FBA), you have to pay additional fees.
You might not trust you enough. As a third-party seller, your products won’t have a “sold by Amazon” label. This isn’t a big deal if your brand is well-recognized, or your product has a lot of decent reviews. But in case you’re a beginner, this might impact your perceived credibility.
Although seller central provides more control over your business, you also must take more responsibility. Now that we have discussed the pros and cons of both platforms, let’s compare them.
Vendor Central vs. Seller Central: Key Differences
The following is a comparison of different aspects of both platforms that are of importance to you as a seller.
Business Model
With vendor central, you have a wholesale relationship with Amazon. You sell products in bulk to Amazon which then manages their retail sales to end customers. This program is invite-only, and Amazon only offers it to the brands and manufacturers that it thinks would perform best in the marketplace.
In contrast, seller central allows anyone to sign up as a third-party seller and sell directly to customers. This platform provides opportunities for direct-to-consumer business over a broad range of product categories.
Pricing and Inventory Control
Vendor central provides little control over the pricing as Amazon decides the final price based on its retail price strategy. Similarly, Amazon dictates order volumes and frequency, not the vendor.
Seller central allows you to completely control the pricing of their products. Sellers can also manage their inventory as per business needs.
Payment, Fees, and Logistics
With vendor central, Amazon determines the payment terms, and it usually takes 60-90 days for the payments to be processed. Amazon manages all the logistics and sales to end customers. Vendors are also subject to additional costs like chargebacks or margin maintenance.
Seller central offers a quicker payment turnaround which is usually two weeks. Sellers can either manage logistics independently or outsource to Amazon through fulfillment by Amazon program. The seller pays a referral fee for each item purchased and additional fees are applied for additional services.
The different features, pros, and cons call for the need for careful consideration and evaluation of business needs when deciding to choose between them. Although you can’t join vendor central if you’re not invited, you still need to decide whether to join it or not in case you are invited. Or you might need to learn how you can be eligible for vendor central if you wish to join it. So how would you make these critical decisions? Sure, you can do it on your own, but that’s not the best thing you can do for your business. We recommend hiring an Amazon consultant to gauge your business demands and challenges and make the best decisions for you.
How Amazon Consultant Can Help You Choose the Right Platform
Amazon consultants are trained professionals who have in-depth knowledge of the Amazon marketplace, its algorithms, and policies. Recruiting them can significantly improve your decision-making, business growth, and eventually revenue. A business consultant can help you decide between choosing vendor central or seller central in the following ways.
Assessing Business Needs and Objectives
Amazon consultants can provide a detailed analysis of your business’s needs, goals, and objectives. They understand the business’s vision and long-term goals and devise the best platform for developing a strong brand on Amazon, driving business growth, and growing revenue.
Evaluating Product Category and Competition
The product category you choose and the competition in the relevant category can significantly impact your product sales. Amazon consultants can suggest your product categories with lower competition and high revenue potential by conducting in-depth research and unveiling insights.
Examining Operational Capabilities and Resources
What aspects of your business can you manage effectively should be considered while deciding the selling platform. Can you manage warehousing? Is shipping affordable for your company? Can you handle customer service? Or should you rely on Amazon to manage these services efficiently? Factors like these should be examined before deciding. And amazon consultants are experts in analyzing these factors. They can weigh the demands, needs, and resources of your business and make the best move.
Thus, Amazon consultants can be valuable assets for your business as they can save your business a lot of time and resources.
Conclusion
Amazon vendor central and seller central are two platforms for sellers. They have their own specific features. Vendor central is an invite-only program that allows businesses to sell their products wholesale to Amazon which then manages the selling, shipment, and other aspects of sale. This platform provides larger firms with more business but less control over their products. Seller central allows any seller to sell their products directly to the consumers. It provides sellers with more control over their business but also demands more effort for success.
Amazon vendor central vs. seller central: choosing between the two is an important decision. The decision should be made by carefully gauging the business needs and objectives. And experts can help you handle this. Amazon consultants can help you choose between vendors central and seller central by keenly examining business demands, challenges, goals, and resources. So do consider hiring one to help you make this decision and every Amazon business decision in general.
