Thinking about becoming an Amazon Vendor? Or maybe you’re happy as a Seller?
We’ll walk you through the differences and help you figure out which way to go.
We will explore:
- Who are Amazon Vendors?
- Who are Amazon Sellers?
- Seller Central vs. Vendor Central: What’s the Difference?
- Exploring the Pros and Cons of Amazon Vendor Central
- Exploring the Pros and Cons of Amazon Seller Central
- Can You Be Both an Amazon Vendor and Seller? Hybrid Strategy Explained
- Choosing the Right Strategy for Your Business
Who are Amazon Vendors?
So, who’s actually selling those “Sold by Amazon” items? It’s the Amazon Vendors! They sell their products directly to Amazon in bulk, and they use something called Vendor Central to manage everything.
Unlike most sellers you’re probably familiar with, Amazon Vendors don’t sell directly to customers. They sell to Amazon, who then sells to the customers.
As a Vendor, you won’t deal directly with customers. Amazon handles all the customer service, shipping, and even sets the prices.
But becoming an Amazon Vendor isn’t like just signing up for a regular seller account. You actually have to get invited by Amazon.
Okay, so we’ve talked about Amazon Vendors. Now let’s switch gears and talk about Amazon Sellers.
Who are Amazon Sellers?
While Vendors sell wholesale to Amazon, Amazon Sellers sell directly to customers. Becoming a Seller is open to anyone, with fulfillment options ranging from self-managed to Amazon’s FBA (Fulfillment by Amazon) service.
Amazon Sellers control their listings, inventory, pricing, advertising, and customer interactions. They set prices, manage stock, and communicate directly with buyers.
Sellers have the flexibility to manage their own fulfillment or opt for FBA service, where Amazon takes care of storage, packaging, and shipping.
Amazon Seller Central Service Overview
- Fulfilled by Amazon (FBA)
- Fulfilled by Merchant (FBM)
- Seller Fulfilled Prime (SFP)
Seller Central vs. Vendor Central: What’s the Difference?
Now that we’ve covered the basics of Amazon Vendors and Sellers, let’s look at how they operate using the different platforms: Vendor Central and Seller Central.
| Platform | Vendor Central | Seller Central |
| Access | Invite-only | Open to all |
| Sells To | Amazon | Customers |
| Price Control | Amazon | Seller |
| Payment Schedules | 30-90 days (bespoke) | Every 14 days |
| Tools | Advanced tools and analytics for product optimization | Advanced marketing & analytics tools for registered brands |
| Fulfillment | By Amazon | Self or FBA |
| Customer Communication | By Amazon | By Seller, unless FBA |
| Inventory Management | By Amazon | By Seller |
| Product Placement | Possible increased visibility and priority | Competition from other sellers and Amazon’s products |
| Logistics Support | Hands off after bulk delivery to Amazon | Optional assistance through FBA |
Exploring the Pros and Cons of Amazon Vendor Central
Deciding to become an Amazon Vendor can have a big impact on your business, with both upsides and downsides. Let’s take a closer look:
Amazon Vendor Central Pros
- More Customer Trust: Seeing “Sold by Amazon” on your products can boost customer confidence and might lead to better sales than an unknown brand.
- Advanced Marketing Tools: When you become a vendor, you automatically get access to advanced marketing tools like A+ Content (formerly enhanced brand content) and Amazon Marketing Services, which can help increase your product visibility and sales.
- Hands-Off Logistics: You can take a load off by letting Amazon handle the heavy lifting with their expert fulfillment services! You’ll have more time and energy to drive innovation in your products.
- Peace of Mind with Wholesale Sales: Selling wholesale on Amazon is super secure because you’re dealing with big orders from a reliable buyer—Amazon itself! They purchase your stock in bulk, which guarantees income at scale
- Higher Visibility Potential: Being a vendor on Amazon can really boost your product’s visibility. Since it makes sense for them to highlight ‘sold by Amazon’ products, you might find your items popping up more often in search results.
- Access to Amazon’s Prime Program: Not only do your products qualify for Prime automatically but you also gain access to powerful marketing tools like the Vine program.
Amazon Vendor Central Cons
- Limited Access: Getting into Vendor Central is tough because it’s invite-only, so many businesses just can’t join.
- Loss of Control: You don’t get to decide on prices or manage your stock yourself—something that might not work well for businesses who like to be in charge.
- Prolonged Payment Periods: Payments can take anywhere from 30 to 90 days, which might squeeze your business’s finances.
- Tight Regulations: You have to follow really strict rules about how things are done—both for safety and operations—which can be tough to keep track of.
- Limited Customer Contact: You don’t get much chance to talk directly with your customers—this can make it tough to figure out what they really want.
- Over-Reliance Risks: Relying too much on one big buyer like Amazon can be risky because if they change their mind about buying from you or alter their rules, it could really shake up your business.
Exploring the Pros and Cons of Amazon Seller Central
Pros of Amazon Seller Central
- Anyone Can Join: Anyone can join Seller Central without significant barriers; it’s open for all businesses looking to sell on Amazon.
- Get Paid Faster: Payments are processed faster with regular disbursements every two weeks compared to vendors’ longer cycles.
- Set Your Own Ads & Prices: You have complete control over setting prices and managing your listings directly on the platform.
- Pick Your Own Way to Ship: You can choose how you want your products fulfilled—either through FBA or handling it yourself—depending on what works best for your business setup.
- Know Your Customers Better: Direct interaction with customers provides valuable insights into consumer behavior through access to detailed customer data and feedback loops that help refine product offerings over time.
Cons of Amazon Seller Central
- Standing Out is Hard: The crowded Amazon marketplace makes it challenging to get noticed.
- Fulfillment Hurdles: Sellers are responsible for shipping and customer service unless using FBA, adding complexity and expense.
- Fee Overload: Sellers face multiple fees like FBA, storage, and referral fees, which can eat into profits if not carefully managed.
- Demanding Operations: Running an Amazon business requires ongoing monitoring and management, making it time-intensive.
- Constant Adaptation: Sellers must stay on top of Amazon’s ever-evolving policies to avoid disruptions.
- Account Vulnerability: Sellers face the risk of sudden suspension, but monitoring account health and working with Amazon’s review team can help resolve issues.
Can You Be Both an Amazon Vendor and Seller? Hybrid Strategy Explained
Did you know businesses don’t have to choose between Amazon Vendor Central and Seller Central? They can actually do both! By combining the two, brands can unlock unique advantages from each model.
For example, as a Vendor, you can tap into Amazon’s streamlined logistics and build stronger customer trust. At the same time, operating as a Seller lets you keep control over pricing and maintain direct relationships with your customers.
Some brands even split their strategy—using Vendor Central for high-volume, low-margin products and Seller Central for high-margin, niche items. It’s a smart way to maximize profitability and reach.
Of course, this hybrid approach comes with its own challenges. You’ll need to manage two separate supply chains: one for your Seller orders and another for supplying Amazon as a Vendor. But if your brand has been invited to Vendor Central, you’re likely in a good position to handle the added complexity.
While it’s not the right fit for every business, this dual approach could be a game-changer for brands looking to get the most out of Amazon’s ecosystem.
Choosing the Right Strategy for Your Business
Deciding whether to use Amazon Vendor Central, Seller Central, or a hybrid approach comes down to your business model, resources, and objectives. Ask yourself these key questions:
- How much control do you need over pricing?
- Can your cash flow handle longer payment terms as a Vendor?
- Which option best fits your business model?
- Have you compared the profit margins for both options?
- How crucial is it for you to manage customer service directly?
- Do you have the logistics capacity to handle order fulfillment, or do you prefer a hands-off approach?
- How important is Amazon’s marketplace to your overall sales and growth strategy?
The right choice depends on your specific business needs and goals. Take the time to evaluate these factors carefully, and consider consulting experts or learning from other businesses with Amazon experience to make the best decision.
Sell with Peace of Mind
As you finalize your strategy for selling on Amazon, remember that managing risks is key to long-term success.
That’s where YAS Pay As You Sell product liability insurance comes in—a flexible solution that gives you peace of mind without unnecessary expenses holding you back. Now you can focus on what matters most: delivering great products and service to your customers.
Explore YAS Pay As You Sell product liability insurance now!