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Which is better for my business: Amazon Vendor Central or Seller Central?

Insights / 07.11.2018

Kusha Karvandi / Sr. Amazon Strategist

One of the questions brands frequently ask Red Door is whether they should be using Amazon Seller Central or Vendor Central. There are many pros and cons for both of these selling options, and things like the recent changes to the Amazon Brand Registry program (Improved brand support: allowing sellers to report Brand Registry policy violations, Improved brand protection: support for sellers filing trademark violations) has led to even more confusion about which to choose. To help you make a more informed decision, we’ll break down the differences between Amazon Vendor Central and Seller Central, and the benefits and challenges that come with each.

Vendor Central

Known as Amazon’s elite invitation-only wholesale program, Vendor Central is the perfect selling option for large brands that are brand-owning manufacturers and distributors. When you participate in this program, you’re essentially acting as a supplier that will sell wholesale to Amazon. After you ship the items in bulk to their warehouses, Amazon will then store the merchandise and fulfill the orders for the customers.

Vendor Central Benefits

  • It’s easy. As a member of this exclusive program, your primary responsibilities are to sell large orders to Amazon and ship the inventory to the warehouses.
  • The terms of the wholesale agreement are negotiated upfront with an Amazon Account Manager, so there is no confusion down the road.
  • All of your items will be distinguished with “Ships from and sold by Amazon.com.” They will also be eligible for programs such as Amazon Prime, Amazon Prime Pantry, and Subscribe & Save.
  • You get access to exclusive features such as Enhanced A+ Details pages, the ability to add a video to your listing, and the Amazon Vine Reviewer program—all which can enhance the conversion of your listing. 

Vendor Central Challenges

  • Minor oversights on your part, like a mis-wrapped item or absent label, could result in chargebacks from Amazon.
  • Sales are limited to only Amazon.com, whereas Seller Central allows you to expand your distribution to the other marketplaces such as Amazon.ca, Amazon.com.mx, Amazon.co.uk, etc.
  • Payment processing time is slow.
  • Because Amazon handles the inventory, fulfillment, returns, and customer service, you can’t attend to an unsatisfied customer’s problems. In fact, you won’t have any order data or communication with the customer, which means lost opportunities to help prevent negative feedback and reviews, which can significantly impact your sales.
  • The control of inventory size is completely out of your hands. So, if your merchandise gets coverage on a renowned television network, you likely won’t be able to increase your inventory on Amazon to cover the new buying demand.
  • There are many overlooked fees, such as 4-10% to help cover marketing slotting costs. Amazon will also try to negotiate the price they pay you over time.
  • There is virtually no control over product pricing. Amazon says they will honor MAP but they frequently do not. Amazon will also match another seller’s price, which means if the price appears lower anywhere else they will match it and your price will drop.
  • The support for Vendors is very limited. While it seems that having a Vendor Manager would give you better and faster access to answers and solutions, this is not the case. Amazon internal communication channels are severely lacking.

Seller Central

Amazon’s Seller Central program was created specifically for third-party sellers that want to sell directly to Amazon customers. As a third-party seller on this platform, you do not necessarily have to own your brand. The two Seller Central options are individual and professional. Contrary to Vendor Central, Seller Central is a place where you can sell individual units or small quantities to Amazon shoppers. The individual selling plan is best if you intend to sell less than 40 items a month, whereas the professional selling plan is ideal if you plan to move more than 40 items a month. Since Seller Central is not a wholesale program, the selling options typically afford more control and flexibility than Vendor Central.

Seller Central Benefits

  • When brands are selling directly to consumers, they’ll likely experience higher margins. The only costs are:
    1. A referral fee for Amazon bringing you the customer (approximately 15% of the sale).
    2. Any FBA fees if you choose to have Amazon fulfill your orders. 
  • The Seller Central program offers extremely fast payment. As a member, you can expect to be paid within 7 to 14 days.
  • When you create a North American account, you have the option to sell in America, Canada, and Mexico. To sell in the European Union, you have to create a unified European account.
  • With Seller Central, you have access to many great tools for analytics and reporting, as well as a wide range of customer data.
  • Marketing tools that were once only accessed by Vendor Central users—clippable coupons, Enhanced Content (Seller Central has a similar version now called Enhanced Brand Content), Storefront/Brand Page, Brand Registry, and Headline Search Ads—are all now available to many Seller Central users.
  • You have more control over your inventory and replenishing inventory to prevent running out of stock.
  • You can easily integrate third-party applications to help with things like inventory management, marketing, customer follow up emails, etc. Most of these applications cannot integrate with Vendor Central since you have no access to customer transaction data.
  • There is superior support for Sellers with immediate help available by email, live chat, and phone.

Seller Central Challenges

  • There are many category/product restrictions when you choose to sell on Seller Central. While there are over 20 unrestricted categories, other sections require that you obtain permission from Amazon to list the products.
  • Not all features are released to all Seller Central users at the same time. Amazon tends to release more features to a Seller Central seller over time, and they also beta test features often, so there is no guarantee which features a new seller may or may not have access to.
  • Unlike Vendor Central where Amazon handles most of the behind-the-scenes work, Seller Central will require a lot more time, work, and attention as you’ll be expected to fulfill orders, create a pricing strategy, provide excellent customer service, respond to buyer messages within 24 hours, and much more.

Vendor Central + Seller Central Account

Now that we’ve laid out the main pros and cons between a Vendor Central and Seller Central account, the next question is: can a brand have both? The answer is yes. If you are considering this, make sure to get Amazon approval when setting either one up by contacting Amazon Seller/Vendor Support, and let them know you intend to have both.

If you receive an invitation from Amazon to Vendor Central, we recommend taking it and then determining which products you may or may not want to sell via Vendor Central. Usually it makes the most sense to leverage Vendor Central for access to the additional tools and features, but use your Seller Central account as your primary selling account.

Interested in learning more about Amazon? We created a comprehensive guide to Amazon Commerce strategy, covering everything from Brand Gating and Policing to product listing SEO and paid advertising on the platform. 
 

Amazon Marketplace Management ,Insights

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