What is the Vendor Central?
Any online retailer who sells his goods via Amazon with the help of Vendor Central is often referred to as a first-party seller. However, he does not sell his goods to the end customers himself, but acts as Amazon’s supplier and sells his articles in larger quantities to Amazon. Amazon is thus the owner of the goods and manages marketing, sales and prices of the products to a large extent independently. The opportunity to participate in Amazon’s vendor program is not the responsibility of the retailer, but can only be realized by invitation from Amazon, which is usually only directed at larger manufacturers or brands. In addition to exclusive marketing opportunities, the program certainly has potential for larger merchants due to simplified inventory management. However, this also creates disadvantages for the retailer, because he is to a certain extent dependent on Amazon – and even more so than a “normal” seller.
What are the biggest advantages of Amazon Vendor Central?
Trust in Amazon
If you ask customers who they trust most – a first-party seller or a third-party seller – it quickly becomes clear that many buyers prefer items that are sold by Amazon itself and not by a third party. The term “sale by Amazon” creates trust and implies quality and reliability.
Unlike sellers, vendors have the option of participating in additional marketing programs. Through “Subscribe & Save” or “Amazon Vine”, a product review and feedback program, vendors using Vendor Central have several exclusive programs to choose from.
A+ Content and AMS
Although EBC (Enhanced Brand Content) has been available to sellers for some time in order to display further product or brand details on their product detail pages, they do not have the option of implementing A+ content. The module-based content extension is currently only available to vendors.
In addition, vendors are the only ones who have the official option to place Sponsored Products, Headline Search Ads and Product Display Ads via Amazon Marketing Services. Sellers (not vendors) can only use the advertising types of Seller Central.
What are the biggest disadvantages of Amazon Vendor Central?
Statistics and data
Sellers always have access to comprehensive statistics regarding sales figures, page views, conversion rates, etc. via Seller Central in order to monitor the stock and plan future requirements. If, on the other hand, a retailer wishes to access comparable statistics via Vendor Central, he can only do so by paying additional fees.
The vendor on the Marketplace is not the retailer, but Amazon itself. This means that the retailer no longer has any contact with the buyers. He cannot obtain seller feedback or contact the customer after purchasing the goods within the context of after-sales measures. In addition, the opportunity to collect customer data is also not available to the vendor. If any problems occur with the quality or the delivery, the vendor is not able to contact his customers. Even if Amazon, rather than the retailer, is responsible for any shortcomings, the retailer’s hands are tied, and negative aspects – regardless of the retailer’s inability to influence them – can still fall back on him.
Prices and Margins
While a seller can change his prices at any time with a few clicks and determine them himself, vendors cannot influence the selling prices via Vendor Central. Once the goods have been sold to Amazon, the marketplace giant itself is responsible for determining the price and selects the prices individually at its own discretion. It cannot be guaranteed whether the selling price is in conformity with the retailer’s pricing policy.
How can I register for the Vendor Central?
Several steps are required to register with Vendor Central. The first step is to negotiate and fix prices and conditions with Amazon. The dealer sends his wholesale prices to Amazon, where the prices are then compared with the offers of any competitors. Amazon then sends the retailer an offer with conditions requiring approval. If the merchant agrees to the requirements, the vendor contract is concluded and the merchant gains access to his vendor account.
Amazon usually places the first order of goods with the merchants about one month after the registration has been completed. However, before the merchant can log in to Vendor Central, he must answer a few further questions. He can then upload large quantities of his offers to Vendor Central using a product table. Amazon thus receives the necessary product data and uploads it to the product catalogue. After checking the data, the employees create product detail pages for the items sold, if they do not already exist. The articles become available for sale as soon as the goods have been received and booked into the Amazon warehouse.
Vendor or Seller – Which is better?
As with many questions in life, the only answer here is: It depends. Both programs have their advantages and disadvantages. Every retailer should always decide individually and weigh exactly whether it makes more sense for him to be a vendor or a seller. Due to the complexity of the topic and the individual framework conditions, it is unfortunately not possible to give a general answer to this question. Basically, however, the following applies: the larger the retailer, the more reasonable the vendor program becomes; the smaller the retailer, the more reasonable it is to sell goods as a seller.