Vendor Central vs Seller Central
Any business can benefit from Amazon, which boasts over 200 million subscribers with a Prime monthly subscription as of 2020. However, choosing the right strategy for selling on the site can be confusing.
Business owners have two options for selling on Amazon: Vendor Central and Seller Central. If you can’t decide which option is best, consider a hybrid approach, which lets you take advantage of the best of both options.
Here, we’ll dive into what each option provides and how the hybrid option can help you take control as an Amazon seller.
Comparing Amazon Vendor Central vs Seller Central
Amazon Vendor Central program is an invite-only platform. Once you receive an invite, you begin selling directly to Amazon. Invited vendors act as a supply chain for Amazon. Through this platform, you operate as a first-party seller.
With an Amazon Seller Central account, you simply use Amazon as a platform to market and sell your products to customers. In this program, you operate as a third-party seller. As a result, you maintain complete control of product marketing and pricing.
Benefits of Vendor Central
When you use Vendor Central, your products gain access to Amazon Marketing Services. In 2020, the annual global marketing costs of Amazon reached about $22 billion U.S. dollars. This spend represents display ads, search ads, and sponsored products ads that Amazon creates for vendors. Access to this level of hands-off automated marketing understandably appeals to many business owners.
Customer interactions have a significant impact on your brand. However, when using Vendor Central, you can’t interact with customers who may have had a negative experience.
Your business approach determines whether you view this as positive or negative. Some business owners are glad to be free from interacting directly with disgruntled customers, while other business owners want the chance to learn why customers are dissatisfied.
You may find it advantageous to sell larger quantities of products at once. With Vendor Central, Amazon sends you bulk orders, which many business owners find more convenient.
Keep in mind that an Amazon buyer submits smaller purchase orders than a retail store to carefully manage the amount of product received at the Amazon fulfilment centre.
Benefits of Seller Central
One of the biggest Amazon Seller Central pros is that you maintain complete control of your product’s marketing strategy. Although you won’t receive Amazon’s automated marketing, Seller Central lets you keep the authority for product display and retail pricing.
For example, you may want to control product marketing with newly launched products until you know how consumers engage with the product.
Because Amazon Sellers maintain complete control of their brand, you also retain control of consumer confidence. From bad reviews to unsatisfactory orders, you can reach out to customers to make things right. If you prefer a high level of control over customer interaction, Seller Central may be more appealing than Vendor Central.
Using a Seller Central account, you maintain total responsibility for inventory management. You manage order fulfilment yourself via Fulfilled by Merchant (FBM) or you can utilise the Fulfilled by Amazon program (FBA), where you send stock into Amazon Fulfilment Centres and they handle the pick, pack and shipping of your products for a per unit fee. While this requires a more hands-on approach, many business owners prefer having more control over their products.
The Amazon Hybrid Approach
Most business owners see benefits to both Vendor Central and Seller Central. Luckily, you can take advantage of both options using a hybrid approach to the Amazon Marketplace. After all, who doesn’t want to maintain pricing control while also receiving bulk orders and premium marketing services?
With a hybrid strategy, you’ll have both Vendor Central and Seller Central accounts. You’ll choose which products you want to sell under each account. You can analyse your consumer data, sales history and profitability to determine which items should go in your Vendor account vs your Seller account.
Benefits of the Hybrid Strategy
1. Improved Brand Credibility
When you use the hybrid approach, your products earn credibility while maintaining a Seller account’s control. In a hybrid approach, you only sell certain products as a Vendor to show the credibility of your brand.
Businesses can use Vendor Central to build brand trust with consumers, since customers trust products sold by Amazon. However, these same businesses still benefit from operating as third-party sellers of other products listed in their Amazon stores.
2. Increased Profit Potential
Perhaps some of your products don’t sell as well. That’s okay – just list these items as an Amazon Vendor. They’ll benefit from Amazon’s marketing and gain customer exposure. Then, list high-selling products as an Amazon Seller.
With this approach, your high-selling items benefit from retail pricing control. On the flip side, you can boost your profits of lower-selling items through Amazon’s wholesale pricing.
3. Higher Inventory Control
When Vendor items don’t produce profits, they sit in the Amazon warehouse, and Amazon stops ordering the product.
With a hybrid approach, you can transfer these items from your Vendor account to your Seller account. This approach grants you even more control as an Amazon Marketplace Seller.
Of course, there’s no such thing as a perfect strategy for Amazon retail partners. For example, Amazon customer data and Amazon statistics show that 9 out of 10 consumers price check products via Amazon.
The retail site’s business model focuses on having the lowest prices and winning the Buy Box. As a result, you may have to lower some of your prices to compete with products sold by Amazon.
Seller Central users should also remember that Amazon charges a referral fee for every purchase. Sellers with a high product quantity also pay a monthly flat fee. However, these fees likely won’t impact your bank account too much.
Get Help Navigating a Hybrid Approach to Amazon
Whether you use Amazon Vendor Central, Amazon Seller Central, or a hybrid approach, be sure to choose a strategy well-suited to your business needs. Push-Pull helps businesses take full advantage of Amazon’s selling platform.
Our team of Amazon pros can help you navigate your selling strategy and benefit from Amazon’s broad audience. Contact us today to learn more and maximise the benefits of Vendor Central and Seller Central.