eBook Chapter 1: Amazon Seller Central vs. Vendor Central - Understanding the Differences

SELLING ON AMAZON VENDOR CENTRAL

The Benefits of Amazon's Vendor Programme  

Amazon's Vendor Model takes the  forecasting, pricing and placing,  scalability and after-sales service  from your team and places it in  the experienced hands of  Amazon.  

The business and sales side of  selling become Amazon's  

responsibility while you ensure  the fulfilment of purchase orders  (POs) and follow the terms  negotiated in your 12-month  Vendor co-op contract. You're  also responsible for creating your  product listings and  

implementing a marketing and  advertising strategy to reach  consumers, drive traffic to your  product listings and Brand Store,  and increase sales. 

Selling on Vendor Central  and Alternative Selling  Models 

A Vendor account benefits  businesses or manufacturers with  a B2B set-up who want to  continue expanding their market  reach through wholesale  

channels. 

For those who want to sell  directly to customers and have  more control over pricing,  shipping and customer service,  utilising the Seller model might  be a preferred option.  

Alternatively, the Hybrid model is  an excellent alternative to reach  customers directly while  

maintaining your wholesale sales  avenue. This model allows you to  operate a Seller and Vendor  account to maximise sales and  profit - and to ensure that your  products are always in stock.  

The benefit of this model is  that the Vendor supports and  drives the Seller platform.  Vendor can be a pessimistic  platform in that Amazon orders  less stock. In turn, this can  affect your POs. To counter it  negatively impacting your  account, place your inventory  in FBA (Fulfiled by Amazon) or  FBM (Fulfiled by Merchant),  ensuring your product  

continues selling.  

For the Hybrid model, it’s  crucial to watch your in-stock  rate and FBA storage cost. 

A second alternative is a Direct  Fulfilment model. The model is  also referred to as  

“dropshipping”. Vendors are not  automatically qualified for this  programme and must be  invited by Amazon or need to  request access to it. 

Once accepted, you enrol your  existing Amazon catalogue and  set your stock levels. When  Amazon makes a sale, you are  notified. Amazon sends a driver  to collect the parcel and  delivers it directly to the  customer. 

Amazon sets high expectations  for the Direct Fulfilment model,  and orders must be prepared  and shipped within a few hours  and marked as dispatched  within 30 minutes of collection  by Amazon.  

However, the advantages of  Direct Fulfilment are that there  are no delivery fees, and it  provides an additional  

fulfilment method to help with  your in-stock rate.  

Amazon sets high expectations for  the Direct Fulfilment model, and  orders must be prepared and  shipped within a few hours and  marked as dispatched within 30  minutes of collection by Amazon.  

However, the advantages of Direct  Fulfilment are that there are no  delivery fees, and it provides an  additional fulfilment method to  help with your in-stock rate.  

Born To Run (B2R) 

Born To Run is a Vendor-specific  programme that helps Vendors  kick-start sales. Especially when  new to selling on Vendor or  launching new products.  

You can send a request to  Amazon to place an order for  stock. Amazon evaluates your  request based on account limit,  warehouse capacity and  

profitability. If approved, POs  (Purchase Orders) appear within  24 hours. The stock order is based  on the amount you’ve determined  will sell within 90 days.  

At the end of the 90-day period,  you can pay Amazon a 25% fee for  unsold stock, which they will  disregard or resell. Or, you can  have Amazon return the stock to  your warehouse. If your account  allows overstock returns by  default, Amazon may return stock  to you even if you’ve selected to  pay the 25% fee.  

Profitability on the Vendor sales  model depends on how  

successfully you negotiate pricing  and manage logistics. And how  well you understand and manage  discounts and chargebacks.  

Utilising Amazon's system can be  hugely advantageous if you can  ensure your profit margins and  market your products well.