I’ve had a lot of conversations lately with businesses who can’t decide which Amazon platform to sell from; Amazon Vendor Central or Amazon Seller Central? Firstly, there is no right or wrong answer here- in fact you can even sell via both platforms concurrently if you really want to. But let’s break down some of the high level distinctions to help you make up your mind.
Seller Central is Amazon’s third party (3P) direct to consumer (DTC) platform and the most common way to sell on Amazon. There is loads of information available on this type of engagement so I’ll just shout out the headlines. It’s a totally self service platform. Inventory is owned directly by you. Items are shipped directly to customers and can be shipped directly (fulfilled by merchant, FBM) or via from Amazon (fulfilled by Amazon, FBA). The great news is you control your pricing, which might be important if you don’t want Amazon undercutting your other distribution partners. If communicating directly with your customers is super important, Seller Central might be the way to go as there is more opportunity and more tools available to engage directly with your customers.
To sell via Seller Central, anyone with a business and credit card can sign up for a professional seller account- you’ll be up for monthly subscription fee, a per sale referral fee and also fulfilment fees.
Vendor Central is Amazon’s first party (1P) wholesale platform and there is a lot less information available on it. Inventory is owned by Amazon. Amazon’s algorithm will place orders from you on a high frequency, low volume basis- but be warned, this only occurs if DTC sales are performing well for Amazon. Hence, this is not a hands off, set and forget engagement with Amazon. If you want healthy wholesale numbers, you need to make sure DTC performance is optimised by ensuring your product listings reflect best-in-class standards to achieve organic discoverability. You will also absolutely need to invest time and money in sponsored advertising and promotions.
The great thing about Vendor Central, is that Amazon takes care of all DTC shipments, and you won’t need to worry about lost inventory or customer returns- it’s all part of the service. Amazon is also listed as the seller on your product listing page (as opposed to your brand name), and there is a school of thought that suggests a higher level of consumer trust is associated with this- it’s something to consider anyway.
You will be assigned a Category Manager, but I need to stress that you will still be expected to operate mostly autonomously. One of the limitations of Vendor Central is the lack of control you have over product pricing. You can recommend the RRP, but ultimately you have no control over it- Amazon’s algorithms will ultimately alter the listing price to whatever number best positions the product to make a sale. And you’ll want to make sure you can fulfill your P/O’s in a timely manner as Amazon’s algorithm doesn’t take kindly to poor inventory management.
It’s worth noting that Vendor Central is invite only, or at least your direct approach needs to be accepted. It’s free to join as Amazon makes their cut on a per sale basis. You’ll be up for the following fees:
Base Allowance % of cost price from net receipts deducted monthly
Damage Allowance % of of cost price from net receipts, deducted monthly
Freight, shipping from your DC into FBA
Hot tip: factor in how your anticipated PPC investment will impact your margin before making your final decision.
They are considered very different engagements, but I can tell you that both require the same time and effort to optimise your product listings to ensure DTC success. If you want to be close to your customers and have full control of pricing strategy on the platform, go with Seller Central. If you want to treat Amazon like any other major wholesale distribution partner, Vendor Central is for you.
If you’re exploring Amazon as a sales channel, reach out and we can chat about the best option for you.
