Amazon gives businesses and individuals the opportunity to sell their products on Amazon, having access to their vast loyal shopper base. Those looking to start selling on the platform may have heard terms like Seller Central and Vendor Central but are not sure of their differences. We will take you through the main differences below!
Difference #1: You need an invite for Vendor Central
If you are already an established seller on Amazon you may be looking for ways to expand your business, leading you to discover Vendor Central. But, unlike Seller Central, which is open to everyone with few restrictions, Vendor Central is only available to those that have received an invite from Amazon to join, and there isn’t much a seller can do to influence Amazon’s decision to send one.
Anecdotally, there are some things a seller can do that may influence their decision.
- Exhibit at Trade Fairs where Amazon scouts could notice your business.
- Demonstrate that you are a brand focused business through Amazon Marketplace as a Seller with your own branded products.
- Being a brand where Amazon can see evidence of strong demand.
Amazon needs to see the potential to make a profit at scale.
Difference #2: Vendors don’t sell to consumers
Another big difference between Seller Central and Vendor Central is that with Vendor Central you do not sell directly to consumers.
As a Vendor your role shifts from selling the stock yourself to selling to Amazon to sell for you. Amazon purchases your products in bulk at a wholesale price which is agreed by both parties. As a Vendor you then need to fulfil the purchase order to Amazon and the rest of the sales process is out of your hands and fulfilled by Amazon themselves.
This includes logistics, 24/7 customer service, returns and refunds and more. It is important to note though that Amazon has strict guidelines which if not followed, can result in chargebacks, which are fines Amazon hands out for non-compliance.
Difference #3: Amazon is in charge of a Vendor’s selling price
Another key difference is that Amazon has control over setting the sale price for stock bought from vendors. Amazon states that it honours any Minimum Advertised Price (MAP) request by vendors, however evidence suggests this isn’t always the case and Amazon has been known to sacrifice the MAP to offer their customers the lowest price.
Amazon’s control over pricing can also mean that if a similar product starts selling for a lower cost elsewhere, Amazon will reduce the selling price of your products in order to increase volume of sales.
On Vendor Central you should only expect B2B margins and on Seller Central you will get retail margins, which will be higher, but of course as a Seller you have the added costs of packaging, logistics and such to consider too.
Difference #4: Vendor payment terms are longer
One element of Vendor Central that can be really frustrating compared to Seller Central is the longer payment terms.
Those using Seller Central will typically receive payment after 14 days, payments include 14 days of your orders (minus Amazon’s fees) that were delivered at least seven days ago.
For Vendors however, Amazon has many different options, all longer than the 14 days Seller Central gets, these include:
- 30 days – Amazon will pay you after 30 days. However, on this plan, Amazon gives themselves a 2% discount, meaning the amount you receive will be less in order to be paid faster.
- 60 days – Amazon will pay you after 60 days. This is the plan that most vendors are on.
- 90 days – Amazon will pay you after 90 days.
If you rely on money coming in monthly, the later two terms can cause cash flow issues for your business.
Vendor Central is a great option for those wanting to amp up sales and that are used to supplying on a B2B model, but for more traditional Sellers it may be a difficult transition and one worth researching before accepting an invite.