eBook Chapter 2: Setting Up Your Amazon Vendor Account

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Once you've accepted your invitation to become an Amazon Vendor, your products  must be uploaded to Vendor Central. Ensure that all the required fields are filled in so  customers know what they can expect when purchasing your products - avoiding  unnecessary returns or product page suppression.  

When your catalogue is listed on Amazon, you can set up Brand Registry, variations,  administrative functions, and the Brand Store. Then begin setting up your Product  Detail Pages, advertising/promotions campaigns, improving your efforts according to  product data, and participating in big selling days such as Prime Day and Black Friday.  

Utilising all the tools Amazon has made available to you will increase your product  visibility, sales, in-stock rate and overall profitability.  

Enrol In Brand Registry To Protect Your Intellectual Property:

Trademarks and Copyright

Historically Amazon Vendors were automatically enrolled in Brand Registry. It ensured you had access to Amazon features such as A+ Content, Sponsored Brands, Sponsored Display and Amazon Brand Analytics.

Although Vendors already have access to these features, and many are now available for free, Amazon is beginning to lean on Brand Registry for new category access, Born To Run and Premium Analytics.

Brand Registry also protects your intellectual property, including your trademarks, patents and copyright.

Amazon Brand Registry for Vendors

Manufacturers and brands who sell through distributors and resellers have the problem that their brand identity and integrity are not upheld - and that pricing is severely discounted or inflated to gain sales or margins.

Counterfeits are also an issue on Amazon, and unfortunately, Amazon can't police these issues manually, and it’s been challenging for brands to report counterfeits to Amazon.

However, Amazon has recently implemented Project Zero, combining automation, self-service and unique product codes to eradicate counterfeit products.

Contact Amazon to report copyright violations and counterfeits when you come across them. Brand Registry will help validate your claims against copyright infringements, unauthorised sellers and incorrect product information.

BENEFITS TO VENDORS

• Recourse to ensure accurate information on listings.

• Gain greater control over the information displayed on listings.

• Report copyright violations, counterfeits and incorrect information.

Setting Administrative Functions

There are a few administrative tasks that need to be completed on your Vendor account that will ensure an easier selling experience, in-house administration, and that you’re fully compliant with Amazon and marketplace requirements.

Setting Warehouse Details

You can set up multiple warehouses to supply from, and it is important to use the correct warehouse on Amazon documentation to support Proof of Delivery for shortages.

Banking Information and VAT

Access to edit banking details and add VAT is granted to the administrator of the account. Additional access may be given by request.

Setting up Brand Registry

You qualify for Amazon Brand Registry if you are a Vendor or setting up a Vendor account and have a Trademark for your brand. An image mark is acceptable where your brand name is written into your logo. If this isn't the case, you will need both a word and image mark to qualify. 

You can apply for an expedition to use “trademark pending” and there are approved Amazon Trademark lawyers that ensure automatic approval. 

Contacts

Contacts are set to notify designated people within your company about account changes or issues. Ensure that these are up to date. 

User Access

Admins gain access to all areas of the portal - except editing banking, which has to be granted separately. Contributor access is advised for most account users. Regularly review your access to make sure your account is secure. 

Global listing settings

Global listings allow you to create a localised Vendor account for each of the seven EU countries. By changing the setting on your account to ‘Global’, your listings will automatically appear in the other marketplaces. 

Term Types and Rates

It’s vital to set your terms and rates to ensure profitability on Amazon and that all costs are worked into your margins. For example, selecting the early payment discount term incentivises Amazon to pay invoices early by giving them a percentage discount for paying an invoice early. Generally 2-3% per 30 days.

Also, ensure that all co-op agreements are set so that you’re aware of all potential charges. These are on annual agreements and Amazon will use the renewal point to push for higher fees. It’s important to keep a keen eye on these fees for sales to remain feasible. 

Recommended Percentages for Co-op Agreements

Damage allowance 3-7%

Overstock allowance 3-7%

MDF - Marketing Development Fund 5%-15%

VIR - Volume Incentive Rebate 2-3% Vine Subscription 0.5-3%

HOW TO SET UP BRAND REGISTRY

STEP 1: Register your brand on the Amazon Brand Registry page.

STEP 2: Once the application is submitted successfully, Amazon then validates all the information,

and you'll need to wait for their approval. It may take a few days.

STEP 3: A verification code is sent to the legal entity that applied for your trademark.

Accounting

Invoices you raise against Amazon are always on your agreed credit terms - i.e. 60 or 90 days. Amazon invoicing is almost always due immediately. These are usually either set as from date of invoice or EOM - end of Month. On top of this, Amazon will sometimes add in a term for early payment discount, this would be represented as 60 net, 30 3%. This means if Amazon pays in 30 days they get a 3% discount on the invoice value. Where this has been added to the agreement, Amazon will always pay early to get the discount. It is generally advised to not go with an early payment discount, there are other options such as C2FO for a more selective approach to getting invoices paid which is also generally cheaper.

Invoices Amazon raises against you, however, are not on the same terms and are classed as being due immediately. They are billed as deduct-from-payment, so you don’t need to pay Amazon directly - they will deduct from amounts owed to you. This can cause cash flow delays in Vendor where payments are absorbed by co-op agreements for invoices not due to be paid.

It is also possible for the Amazon balance to go negative, in case you owe Amazon more than they owe you. Two things that cause this problem are “provision for receivable” and “provision for aged receivable”.

“Provision for aged receivables” - this will appear at times on the financial dashboard under adjustments. This happens when Amazon has not raised invoices previously and places the amount on hold while they go back and raise the invoices individually.

This will then disappear and be reversed. If this interferes with your remittance, you can reconcile this in accounts with a suspense account.

“Provision for receivable” is slightly different, this is where Amazon calculates that your account is likely to go negative in the future (comon on seasonal accounts) and places an amount on hold to prevent the balance being paid “out” meaning the funds are still there if they need to raise any bills. Ironically, this in itself places a negative value on the balance and can therefore push the balance negative. This is a temporary charge that is placed and will be reversed by Amazon, so again if this interferes with your remittance, you can reconcile this in accounts with a suspense account.

If a balance in Amazon vendor is negative for too long (over a month roughly) they will begin reaching out to try and get you to clear this negative balance.

Category Access and Dummy Codes

When you first start on Vendor you are given a Vendor code and this gives you category access to list your products.

If you want to sell in other categories, you need to request category access (Amazon will ask for Brand Registry, and details of the products).

Amazon creates a “dummy code” to grant access to an additional category. The dummy code has no agreements attached to it and POs cannot be raised against it

When listing products always use the Vendor code, not the dummy code.

Set up Your Variations and Variation Structure

Variations can be used to group similar products for a better shopper experience. Listing the variations of a product on one page also increases sales and conversion rates.

Additionally, variations rank higher on Amazon. This is because ranking is based on sales - therefore calculated based on sales for the whole page and not the individual products. Plus, when a product in the variation is out of stock, shoppers can see the other versions available.

COMMON CHALLENGES FOR VENDORS

Shortages

When raising invoices with  Amazon, they reconcile  received inventory against the onvoices to approve them. If  they don’t believe they have  received the stock they will not  approve the invoice.   

At this point, the invoice is due  to be paid out if there are still  shortages. Amazon will split the  invoice into two and pay the  invoice for all received stock.  The second invoice is referred  to as a shortage invoice.   

You can dispute invoices by  creating a dispute and providing  Proof of Delivery and Manifest.  You get one chance to raise a  dispute.  

Chargebacks 

Amazon raises chargebacks when something goes against their required  ways of working. Initially, Amazon waves chargebacks, but if the  chargeback infringement continues, they begin to bill for it. You have a  limited amount of time to dispute chargebacks, around 30 days. 

MISTAKES THAT AFFECT VENDOR ACCOUNT PERFORMANCE

• Setting cost prices too low when loading products

• Setting case packs too low

• A low number of keywords

• Not running a Hybrid model and going out of stock

• No control over resellers

• Barcodes not purchased from GS1 - the only legitimate supplier of barcodes

• Not Amazon-compliant packaging