My Seller Pal

What is the difference between Seller Central and Vendor Central?

WHO sells your products is the key difference between Seller and Vendor Central. With Vendor Central, Amazon’s retail team buys your product in bulk and resells them to Amazon buyers. While with Seller Central, YOU will be directly selling your products to Amazon’s customers.

The major difference is simple and the details follow here.

Seller Central and Vendor Central defined

Amazon Seller Central is the web interface used by brands and merchants to sell their products directly to Amazon customers. Seller Central account holders are often referred to as “marketplace” or “third-party sellers”.

As a third-party seller, you have two options for order fulfillment:

1. Fulfillment by Amazon (FBA) – FBA sellers let Amazon handle shipping, customer service, and returns for each individual order. Yet can still provide support to customer concerns.
2. Fulfillment by Merchant (FBM) – You will be in-charged with shipping, customer service and returns for all your orders.

Amazon Vendor Central, on the other hand, is mostly for manufacturers and distributors. Sellers who use this web interface are often referred to as “first-party sellers”. It means you’re acting as a supplier to Amazon. But the main thing about Amazon Vendor Central is that not all sellers would get a chance to be one. Registration on Vendor Central is by invitation only.

You would be able to immediately identify that a company is selling through Vendor Central if the phrase “ships from and sold by Amazon.com” is showing on the product listing.

Let’s get deeper into both and know their pros and cons.

Seller Central vs. Vendor Central

Pricing

As an Amazon seller, you have full control over the pricing of your products unlike if you are an Amazon vendor. Amazon rarely follows Minimum Advertised Pricing (MAP) guidelines from manufacturers and would often adjust retail pricing any time based on internal data without even notifying the vendor.

Note that Amazon will always match any other seller’s price which always ignites price wars and can lead to your product being priced really low that can hurt your margins and in the long run, your business.

Seller Support

Amazon sellers have Seller Support to address their concerns as they arise whether it be about customer issues, pricing, product listing, payments, inventory etc. Amazon vendors, on the other hand, receive minimal to no support at all as they don’t have a Seller Support counterpart.

Costs and Fees

The following are the costs you need to know if you’re planning to become an Amazon Vendor Partner:

1. The wholesale price of your products. As an Amazon Vendor, you should be prepared for a thorough negotiation process with Amazon, as Amazon’s retail team will do its best to negotiate for the best possible wholesale price of your products. Because like you, they are after a healthy profit margin.
2. Slotting costs – 4-10% of the wholesale price
3. You should also be prepared to go back to number 1 should your products sell well as Amazon tends to negotiate the price down even further over time as sales increase.

On the other hand, here are the costs for Amazon Seller partners:

1. Referral Fee – Paid for every item sold and is based on your item category. Fee ranges from 6-20% of the items’ total selling price. Most sellers pay around 15% per item. Amazon also imposes a Minimum Referral Fee to some categories ranging from $1 to $2 per item sold on that category.
2. Variable Closing Fee – This fees for items sold in the media categories amounting to $1.80 per item sold on top of the referral fees. But since these are fixed fees, you can easily account for it in your marketing costs or even increase your price based on Amazon’s fulfillment cost. Though increasing the price isn’t always a good thing as a competitive price is an edge over the fierce Amazon competition among third-party sellers.
3. Storage fees based on the weight and dimensions of your products. Please note that if your inventory stays for more than 6 months on Amazon’s warehouses, you will be charged higher storage fees for those products.
4. Listing fee or a monthly fee depending on your account.
   1. Individual Seller Account – no monthly fee but charges $0.99 per item sold listing fee
   2. Pro- Merchant account – $39.99 monthly fee but no listing fee

Margins

Amazon will try to maximize their profit margins by negotiating lower wholesale prices from Vendor Central partners, so this means lower profit margins for them. But note that Amazon vendors are wholesalers which means they can expect wholesale margins.

Amazon sellers are free to set the price that they like based on their product, shipping, marketing and all other costs they incurred to sell the product. It means Amazon sellers have full control over their prices which Amazon vendors don’t have. But this doesn’t mean that Amazon sellers enjoy healthy profit margins as they need to maintain competitive pricing to get on top of the competition.

Marketing

Amazon vendor partners are most favored in terms of Amazon’s marketing efforts. To simplify things, there are marketing options that aren’t available to Amazon Sellers which Amazon Vendors enjoy. Top on the list is access to Amazon Marketing Services. Amazon vendors also have their own Brand or Store Page. On top of that, they have vendor-powered coupons, headline ads and A+ detail content where they can add high-resolution videos on their product listing which isn’t available to third-party sellers.

Though there are several options for first-party sellers, Amazon Sellers also have their fair share of Amazon marketing tools. Most common is the ad creation. Third-party sellers can create ads for their products and they can choose where they like it to show.

1. Sponsored Products let your products show on page 1 of the results page and on top of the rest of the products through Amazon Pay-per-Click campaigns. This ad is a keyword-driven campaign wherein you will have to set the keywords that would trigger your ad to show. You will be charged for each click your ad gets.
2. Headline Search Ads is also a keyword-driven ad but your ad will show as a headline on the results page. You can include up to 3 products per campaign.

Third-party sellers can also create promotions and offer discounts but driving traffic to those promotions could be a bit tricky.

Inventory

Amazon Seller partners have more control over their inventory as they can easily monitor and manage their stock-levels since they have their stocks with them or through Amazon Seller Central if they are using FBA.

On the other hand, it is quite hard for Amazon Vendor partners to monitor inventory level as Amazon is in full control. It has been known that Amazon runs out of products without any “low inventory” notice.

Receiving Payments

For start-up businesses who are in dire need of good cash-flow, being an Amazon Vendor partner would not be advisable. Amazon uses the traditional Net 30, Net 60 or Net 90 payment terms. If they pay in 30 days, they usually deduct a 2% prompt payment fee.

This is totally different for Amazon Seller Central partners as they get paid every 7 or 14 days.

Customer Confidence

As mentioned in the earlier part of this blog, products sold by Amazon Vendors have this line saying, “Ships from and sold by Amazon”. This give customer confidence that your product is being sold by Amazon. That seal of approval can provide a boost in consumer confidence that you third-part merchants don’t have.

Selling Internationally

If you’re interested to sell across several Amazon marketplace, it is best to opt to be an Amazon Seller Central partner as Amazon Vendor central partners can only sell in the US or at Amazon.com to be specific. While Amazon sellers can create a unified North American account, so they can sell on Amazon.ca and Amazon.mx. They can also create another account to sell on the EU marketplace.

Simplified Business Model

Being a first-party seller, your only concern is to filling purchase orders, billing and avoiding chargebacks which is definitely simpler compared to being a third-party seller where you are expected to deal with a whole lot of things starting from sales reconciliation, lost inventory, taxation liabilities and more if you are utilizing FBA.

Data and Analytics

Sad to say, Amazon Vendors have no analytics to view while Amazon Seller Central partners have full access to customer data and analytics to help them improve sales and marketing efforts all at no cost as it can be easily accessed through Amazon Seller Central.

Messaging Control

Customer messages are fully controlled and monitored by Amazon for Amazon Vendor partners, therefore, customer satisfaction depends on how Amazon handles each concern or issues raised. On the other hand, Amazon Seller Central partners have full control over customer concerns and they can easily access and respond to customer messages through Seller Central.

Setting up Email Autoresponders to provide after-sales services to customers is a great way to ensure customer satisfaction for Seller Central Account holders. My Seller Pal’s user-friendly interface can help you make one for each marketplace you plan to sell in or you’re selling in.

Let’s look at the table below for a side by side comparison of the differences between having a Seller Central or a Vendor Central Account:

To sum up, if you’re planning to start with an Amazon business, your only option is to be Seller Central partner since it is open to anyone. But of course, there’s always a possibility of you getting an invite and having a handful of information when making a decision on accepting the invite or not is a good thing.

FAQs

1. If I’m currently a Vendor Central partner can I opt out and be a Seller Central partner instead?
   Yes, you can always revert to be a Seller Central Partner if you’re not happy being a Vendor Central Partner.
2. Can I have both Seller Central and Vendor Central accounts?
   That is possible. But you should state your intent to keep your ability to list items as independent seller during your negotiation with Amazon.
3. How can I get invited to be a Vendor Central partner? Unfortunately, it’s totally up to Amazon if you will get invited or not. Amazon will usually send an invite to big brands who are selling well in Seller Central.
4. If I get an invite to be an Amazon Vendor Central partner and I turned down the offer, will Amazon suspend my Seller Central Account? Amazon will not suspend your account if you decline their offer, but you will most likely continue to get offers to join as a Vendor Central partner. But this shouldn’t affect your Seller Central account in any way.

References

For detailed FBA and monthly storage fees, please refer to the link below:
https://services.amazon.com/fulfillment-by-amazon/pricing.html

Still, have questions? Send Amazon a note through the link below:
https://services.amazon.com/content/sellers-contact-amazon.html

Detailed Seller Central Pricing Plans
https://services.amazon.com/selling/pricing.html

Amazon Marketing Services
https://ams.amazon.com/

Amazon Sponsored Products
https://advertising.amazon.com/products-self-serve

If you decide to become a third-party Amazon seller, My Seller provides automation and marketing tools for Amazon Sellers.

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