Amazon Vendor and Seller Central
Updated: May 5, 2021
Amazon almost has 50% of the U.S. e-commerce market with more than 1 million U.S. small businesses. Many big businesses and also small businesses can benefit from selling their goods through Amazon since it has enormous reach. With the right information and business model, an enterprising individual with good products can reach many customers and earn money on the platform without spending the usual start-up costs.
There are two ways to get your products selling on Amazon:
1. Amazon Seller Central
2. Amazon Vendor Central
You can sell your products on Amazon either way, but they are completely different concepts. I'll explain the fundamental differences and features.
What is Amazon Seller Central?
Amazon Seller Central, also known as Amazon Marketplace, third-party or 3P, is the easiest way for business owners to get started on Amazon. Business owners using Amazon Seller Central are considered third-party sellers. Benefits are:
Reach a larger customer base.
Amazon puts your products in front of its tens of millions of customers. In addition, there aren’t any “per item” listing fees, so businesses only pay once they sell an item.
Access Amazon advertising.
You can use Amazon’s advertising service. Plus, you’re only charged when someone clicks on your ads.
Access Amazon Pay.
Your customers can quickly pay for your products with the information already saved in their accounts. This is great news for companies since conversion rates go up when it’s easy to pay.
Use Fulfillment by Amazon.
Instead of fulfilling your orders yourself, you can take advantage of Amazon’s first-class logistics capabilities to get your goods to your customers.
Enter International Markets.
U.S. small business owners can expand into international markets without incurring out-of-this-world costs. Amazon users in the U.S. can sell their goods to Europe and Japan.
In addition, sellers benefit from payment fraud protection when selling through Amazon Seller Central.
There are two pricing plans offered by Amazon:
In Individual Plan, business owners don’t pay a monthly subscription fee and they don’t have to pay a listing fee per item. Instead, they pay Amazon $0.99 for every unit sold. Amazon recommends this plan for users selling less than 40 items per month.
In Professional Plan, retailers pay a monthly subscription fee of $39.99. There’s no per-item listing fee, but there are applicable referral fees and variable closing fees.
Benefits of Business Plan are:
Use of spreadsheets, feeds, and other tools to load inventory
Access to order reports
Earn top placement on product detail pages
Apply to sell in more than 10 categories that aren’t open to Individual Sellers
Customized shipping rate options
As you can see, running a high-volume sales channel on an Individual Amazon Seller account would be very difficult, given the limited features. You’d have to be incredibly organized and resourceful.
What is Amazon Vendor Central?
Vendor Central is an invite-only platform for businesses that want to sell their products to Amazon itself. When you sell to Amazon in this capacity, you are their supplier. The core process is very simple:
Amazon send you a purchase order listing what they want to buy
You send Amazon the inventory they have ordered
Amazon pay you
It’s then down to Amazon to sell your products to their customers. You are not involved in that.
Vendor Central can be an attractive option. It gives businesses a way to get their products on Amazon, with none of the hassles of selling direct to consumers. It’s much simpler than Seller Central, but it does still have challenges. Common downsides include harsh contract terms, low prices, and unexpected additional costs. The whole vendor process is controlled from Vendor Central, which acts as a hub in the same way that Seller Central does for sellers. From Vendor Central, vendors can do things like check their purchase orders, provide product data and manage additional advertising.
How do you get into Amazon Vendor Central?
Vendor Central is an invitation-only platform so you can’t simply apply to sell there. There has to be an invitation from Amazon first. Why would Amazon invite a business to sell on Vendor Central, when there are millions of products already available? Well, there are new products being created all the time, as well as existing brands with poor availability on the site. Amazon has vendor recruitment teams around the world whose job it is to find new brands and products to sell. Amazon sends Vendor Central invites to many different types of businesses, including:
Existing brands with strong demand from Amazon shoppers
Marketplace sellers who are doing exceptionally well with their own products
Exhibitors at trade shows and fairs with attractive products
The process typically begins with an email from Amazon, saying that they are interested in selling your products. If you let Amazon know that you’re interested in becoming a vendor, they will explain how Vendor Central works and provide their terms of business. They don’t tend to be much negotiating on these terms. Generally, Amazon will make you an offer, and you can either accept or decline. There may be more scope for negotiating if you’re a large, influential brand, or if you’re assigned a vendor manager. When terms have been agreed, Amazon will create an account for you in Vendor Central and invite you to register. You can then start providing product and cost information to Amazon.