Ready to learn the real differences between Amazon Seller Central and Vendor Central? This article will answer all your questions.
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Once you’ve decided to expand your online reach by selling products on Amazon, you’re going to have to answer this question: do you want to use Vendor Central or Seller Central?
The answer to that question depends on how you position your company in the market.
In this article, we’ll cover the differences between Vendor Central and Seller Central. We’ll also explain which option works best for your business model.
A Tale of Two Parties (The Background)
When you sell on Amazon, you’re going to be selling as either as first-party or a third-party partner. And there’s a world of difference between the two.
If you opt to become a first-party vendor, you’ll use Vendor Central as either a distributor or a manufacturer. You’re selling items in bulk to Amazon, and Amazon in turn sells those items under its own brand name to customers.
You can tell which items on Amazon are provided by Vendor Central partners because there’s usually a blurb in the description that reads: “Ships from and sold by Amazon.”
If you decide to become a third-party vendor, you’ll use Seller Central. You can still choose to use Fulfillment by Amazon (FBA) so that the company processes and ships all your orders. Alternatively, you can handle shipping all by yourself.
But what are the advantages and disadvantages of Vendor Central and Seller Central? For the answer to that question, read on.
Pricing of Vendor Central Vs. Seller Central
How would you like set minimum pricing for your products? If that’s the kind of control that you’re looking for, then you’re going to want to use Seller Central.
Amazon says that it will honor any minimum advertised price (MAP) requests. However, Vendor Central partners are known to complain that the company rarely does so.
Remember, Amazon promises to match any other seller’s price. So if someone notifies Amazon that there’s a cheaper price of a product you’re selling somewhere else online, you can expect the price of your item to drop.
That’s when the price war begins.
Wars aren’t good. People get hurt in wars.
Bottom line: a price war will hurt your bottom line. Also, it’s difficult to get Amazon to raise the price back to the MAP once the battle lines are drawn.
The good news for Seller Central partners is that they can set whatever price they want for the products they sell. So if they want to take a page out of Robert Cialdini’s playbook and jack up the price significantly as a way to promote the idea of quality, they can do that.
Advantage: Seller Central partners. They have more control over pricing than Vendor Central partners.
Amazon Seller Support (What Is The Difference?)
Looking to partner with Amazon in such a way that the company supports you when things go awry? Good luck getting that as a Vendor Central partner.
The reality is that you aren’t likely to receive any support when you sell through Amazon Retail unless your brand is a household name (in which case, you probably wouldn’t be reading this) or you fork over hundreds of thousands of dollars to Amazon.
However, you can expect decent support if you use Seller Central. Amazon offers a Seller Support service that responds to problems related to inventory, payments, and listings.
There’s nothing on the Vendor Central side that compares to Seller Support.
You also have more flexibility as a Seller Central partner when it comes to updating your listings on Amazon. That includes changes to images, titles, bullet points, and descriptions.
Advantage: Seller Central partners. Vendor Central partners receive minimal, if any support. Seller Central partners have access to a Seller Support service.
Costs You Need To Know
Are you skilled in the art of negotiation? If not, then you’re probably going to struggle as a Vendor Central partner.
Why? Because Amazon will negotiate for the best possible wholesale price on your products so the company can earn a healthy profit margin.
In addition to that, you can also expect the company to ask for a 4-10% cash payout to cover what it calls “slotting costs.”
Also, don’t be surprised if Amazon tries to negotiate the price down even further at a future point in time as sales increase.
None of that will be of concern if you decide to use Seller Central. Instead, you’ll pay a flat fee (figure 8-20%) that’s a percentage of the price for each item sold. You’ll of course pay a little extra if you opt for FBA.
Advantage: Seller Central partners. The flat fee that that third party sellers pay makes it easy to account for marketing costs.
Margins Amazon Vendor Central Vs. Seller Central
As we’ve just seen, Amazon will try to maximize its profit margins by negotiating for as low a price as possible from Vendor Central partners.
But what about the profit margins of the partners?
If you decide to sell to Amazon as a Vendor Central partner, you can expect wholesale margins. On the other hand, if you sell as a Seller Central partner, then you’ll earn retail margins.
Which is better? That’s a question that you should ask your accountant.
Remember, though, if you opt to go with Vendor Central, Amazon will likely attempt to negotiate your prices down even more over time. If you don’t comply, the company might look for another supplier.
Then you profit margin becomes 0. At least with Amazon sales.
As a Seller Central retailer on Amazon, though, you’re free to set the price that you like. Of course, if it’s not competitive, you might find that you price yourself out of the market. You’ll likely have to thread a needle that gives you a great profit margin while still maintaining a competitive edge.
Advantage: Seller Central partners. They can basically dictate their own margins.
Marketing as an Amazon Seller
Thus far, it’s looked like you’re better off as a Seller Central partner than a Vendor Central partner.
Don’t kid yourself, though. There are also advantages enjoyed by Vendor Central partners.
One of them is marketing.
Simply put, there are marketing options available to people who sell their products through Amazon Retail that aren’t available to third-party sellers.
For example, Vendor Central partners can have their own Brand or Store page, vendor-powered coupons, A+ detail content, and headline ads.
All is not lost with Seller Central partners when it comes to marketing, though. They can create pricing promotions. However, creating awareness about those promotions is a little more challenging.
Also, Seller Central partners can create ads that appear on Amazon’s website. The company currently offers three places for the ads: the login page, the home page, and the application page.
Advantage: Vendor Central partners. They gain from Amazon’s marketing efforts.
Staying Stocked Amazon Vendor Central Vs. Seller Central
If you decide to become a Vendor Central partner, don’t be surprised if Amazon runs out of your products. The company is known to let that happen without any “low inventory” notice.
Also, Amazon tends to trim down its inventory of certain products over time, furthering the risk that it could run out.
If you opt to go with Seller Central, though, you have much more control over inventory. You can store it at your office or at an Amazon fulfillment center if you’re using FBA. Keep in mind that storage at fulfillment centers comes with a price tag based on the amount of space you use, so manage your inventory wisely.
Advantage: Seller Central partners. They have greater control over their inventory.
Sadly, there’s no shortage of horror stories about Amazon’s reluctance to pay Vendor Central partners.
For starters, the terms could cause cash flow problems for many small businesses. Amazon usually offers 2% Net 30, Net 60, or Net 90 terms.
In some cases, vendors who opt for Amazon Retail had to hire third-party companies to provide proof that products were actually delivered to Amazon. In other cases, Amazon insisted on a $25,000 co-op fee payment in order to receive $250,000 in accounts receivable.
If you can’t deal with those headaches, you definitely shouldn’t use Vendor Central.
On the other hand, Seller Central partners get paid every 7 or 14 days. Of course, those payments are minus the sales commission and any applicable FBA fees. But the payment is much faster.
Advantage: Seller Central partners. Payments are much quicker.
Another area where Vendor Central partners have an advantage is when it comes to customer service. That’s because Amazon handles all aspects of customer service, including issues related to fraud.
It’s true that Seller Central partners can use FBA to handle most aspects of customer service. However, the seller will still be responsible for customers who make claims about receiving fake products.
Bottom line: if you decide to sell as a third-party on Amazon, you’ll find that it’s more difficult to challenge dishonest competitors who pose as customers.
Advantage: Vendor Central partners. Amazon takes care of all issues.
If you’re interested in selling to customers outside of the United States, you should use Seller Central.
Why? Because Vendor Central partners can only sell in the U.S. marketplace at the Amazon.com website.
If you want to sell on Amazon.ca (Canada) or Amazon.mx (Mexico), you can create a unified North American account and sell your products across the border.
Advantage: Seller Central partners. Expansion into foreign markets is much easier for third party sellers.
Facts About Seller Central
- Anyone case set up and start selling
- You get very fast payments
- You get full control over your listing and inventory
- You may get higher margins
- You cannot do A+ Content
- You may be able to do Enhanced Brand Content
- Most people use Seller Central
Facts About Vendor Central
- You need an invitation
- They offer the standard payment terms
- You can do A+ Content
- You get access to special programs like Vine, Subscribe & Save, and more.
- You have less control over your price
- There might be some abilities to sell more
Questions and Answers About Amazon Seller Central vs. Vendor Central
1.Is it possible to have both a Vendor Central and Seller Central account?
Yes, it is possible. It’s recommended when negotiating your contract with Vendor Central that you ensure you can keep your ability to list items as an independent seller.
However, it is a violation to have two seller accounts with prior approval from Amazon. Without approval, both accounts could be suspended.
2. Can anyone join Amazon Seller Central or Vendor Central?
Anyone is free to join seller central.
To become a member of Vendor Central, you must be invited by Amazon.
3. How do I get invited to Vendor Central?
Amazon will generally invite brands that have registered high sales in Seller Central. You may request an invite from your Amazon buyer, but there is no guarantee that you will receive one.
4. Who handles the shipping for Vendor and Seller Central?
With Vendor Central, Amazon will ship the orders to customers, unless another arrangement has been previously agreed upon.
With Seller Central, merchants handle shipping themselves or use Fulfilled by Amazon. If you choose to use Fulfilled by Amazon, you will pre-ship your supplies to an Amazon fulfillment center. Once someone places an order, Amazon will pack and ship the order to the customer and handle all customer support, including refunds and returns.
5. Do I get to set the price?
Using Seller Central, the merchants get to set the price of the items, subject to Amazon’s General Pricing Rule.
Using Vendor Central, Amazon sets the price, and can lower it to match the lowest price available in other sites or stores.
6. What’s the difference between an Individual and Professional in Seller Central?
Individual sellers sell only a few items and operate on a pay-as-you-go basis, meaning they are charged .99c for every item they sell. They also list each item individually .
Professional sellers are not charged by item, rather charged a monthly subscription fee of $39.99. They are able to list multiple items at once using spreadsheets and uploads.
7. When should I convert to Professional?
Generally, if you sell more than 40 items a month it will be more cost effective to switch to a Professional seller.
8. How long will it take to get paid using Seller and Vendor Central?
Using Sellar Central, sellers are paid every 14 days through Amazon Payments. To initiate, sellers must register their bank account information with Amazon. After a sale, Amazon will process the order and credit the net proceeds to your account, which are then transferred to your bank every 14 days. It can take from one to three days for the funds to appear in your account.
You can expect much slower payments with Vendor Central. Most contracts are paid with an invoice on net 60 terms. If Amazon pays in 30 days, they give themselves a 2% discount. Payment time can vary greatly and you won’t necessarily know when it will arrive.
9. Which is more expensive? Vendor Central or Seller Central?
While there are no monthly or item fees associated with Vendor Central, it can still end up costing you more. Amazon takes out marketing fees, remittance fees, pre-payment fees and packaging fees. You may also encounter some unexpected costs due to purchasing A+ content and chargebacks if you miss a label or don’t package your product properly,
10. Which is harder to use?
With Seller Central, you have more control over the process. You set your own prices and stock your items.
Using Vendor Central, you sell a wholesale amount directly to Amazon, who in return sells to consumers. They may not buy as much as you’d like, and Amazon sets the price each item sells for.
The flip side is that using Vendor Central, Amazon takes care of all the customer service issues, complaints, returns and refunds. Unless you use Fulfillment by Amazon in conjunction with your Seller Central account, you will have to handle the customer service aspects yourself.
Generally speaking, Vendor Central may be easier to use, but not necessarily the better choice.
11. Does Amazon Vendor Central require a warehouse in USA? Is that mandatory?
If operating outside the United States, Seller Central is recommended. As a seller, you can ship directly to a Fulfillment By Amazon warehouse or directly to the customer. Remember, you will have to clear the products through customs and pay any import duty or taxes. Your customs broker or freight carrier such as FedEx will handle this for you.
12. How much does shipping cost?
If you fulfill orders by yourself with Seller Central, Amazon standard shipping rates will apply to media products. The rates are based on the shipping service selected by the buyer and the product category.
For orders fulfilled by Amazon via Vendor Central, you will be charged fees for order fulfillment, storage and other optional services in addition to Selling on Amazon fees.
Is it against amazon’s policies to have both a vendor central and seller central account?
You cannot sell the same ASIN on Vendor Central and Seller Central
13. If using seller central, should I ship myself or enroll in Fulfillment By Amazon?
We recommend using Fulfillment By Amazon (FBI) to ship. It gives you more credibility with customers and can often lower shipping prices, and doesn’t require you to deal with returns, refunds or customer inquiries.
14. Are there service fees involved?
Using Seller Central you will be charged a pay-as-you-go fee; .99c per item as an Individual or $39.99 as a Professional.
Because Amazon uses wholesale pricing with Vendor Central, they will generally ask for a payment of 4-10% to help cover marketing and slotting costs. If sales increase, they may also request more in marketing fees or on-going account support fees.
15. Can I sell to customers outside the United States?
If you are using Vendor Central, your products will only be sold on Amazon.com, and therefore only the US marketplace. To sell outside of the country, you would need to have separate vendor accounts for Amazon.ca or Amazon.com.mx.
If you are using a Seller Central account, you can create a unified North American account (United States, Mexico and Canada) and a unified European account. Using an Individual account, you will pay fees per item depending on the marketplace where the item was sold. With a Professional account you will only be charged $39.99 monthly fee.
16. Is gift wrapping and gift messaging an option?
Yes. Amazon offers a Gift Wrapping service which allows users to select an additional gift wrap option and include their own messages.
17. Do I have to pay to list items?
No. You pay per item sold or a monthly subscription using Seller Central, and pay a percentage of sales using Vendor Central.
18. What will happen if we decline the offer to join vendor central? Will Amazon “blacklist” us?
Most likely you will continue to get offers from Amazon, but no negative action should occur.
19. Will I have access to analytics?
With Seller Central, you will receive detailed analytics that help sellers predict when and how much to sell.
Vendor Central account holders must pay for these analytics.
20. What is A+ Content?
A+ content is enhanced that enables sellers to add more detailed item descriptions, higher quality images, videos and more. It is available only to Vendor Central members.
There are two options available: Self Service and Amazon Builds For You. Self Service will cost you about $400 per product detail page, whereas Amazon Builds For You will cost anywhere from $500-$1500 per product detail page.
21. Will I have access to customer data?
With Seller Central, yes. You are able to access customer demographic and contact information, and can contact them for feedback or order-related topics.
With Vendor Central you will not have access to this data.
22. What would result in an account suspension?
Your account may be suspended if you violate any of Amazon’s policies, sell a restricted product, receive buyer complaints or if Amazon feels your product is underperforming.
You will receive a notification informing that your account has been suspended and can check your status in your Performance Notifications.
23. What should I do if my account is suspended?
You may appeal to Amazon. A successful appeal will include acceptance of what went wrong and a detailed Plan of Action to avoid the situation going forward.
Do not try to set up a new account. This is against Amazon’s policies and could result in a ban.
Wrapping It Up Amazon Vendor Central Vs. Seller Central
As you can see, the lion’s share of the benefits belong to Seller Central partners. So if you’re in any way on the fence about which option to choose, select that one.
On the other hand, if you’re running a company with a distributor or manufacturer business model, you should become a Vendor Central partner. Keep in mind that you’re likely to face some challenges, though, especially if you’re running a small business. You’ll have to wait a while to receive your money, deal with limited customer service, and manage your own inventory very carefully. Even with all those risks, the opportunities for marketing to Amazon Retailers are superior.