Amazon Vendor central vs Seller central

Vendor central | Seller central | Can I sell on Vendor AND Seller central? | Vendor central vs Seller central costs

Last year, 86% of UK shoppers used Amazon1, 30% of UK retail eCommerce went through the Amazon UK site2, and a quarter of the UK’s population have an Amazon Prime account3.

Every retail business must seriously consider how Amazon fits into their multichannel eCommerce strategy. There are 2 main ways of selling your products into Amazon: as a Seller (3rd party or 3P), or as a Vendor (1st party or 1P).

Seller central requires businesses manage all their own stock, product pages, store pages and customer fulfilment logistics.

Vendor central involves shipping wholesale stock to Amazon at pre-agreed rates. Amazon then handles all the pick-pack, dispatch & returns logistics and customer services.

Vendor central

Where responsibilities in the Vendor model lie:

Vendor CentralAmazonYour business
Dispatch
Returns
Refunds
Pricing
Product quality
Amazon Ad campaigns
Product listing page content*
A+ content
Store page content
Customer Services*
*Some detailed product questions may need to be answered by the brand owner.

Amazon sends you a PO for the stock they want to sell, you send them the product, they later send you the cash for the sales – after the pre-agreed rate.

For some businesses, the promise of Amazon’s full support and the immediate cash flow, make the Vendor option a no-brainer.

Amazon’s eCommerce logistics services are unrivalled; combined with the volume of Amazon’s massive customer base, the lure of large instant additional sales may be irresistible.

But, there are some potential downsides to consider with this model:

  • Amazon controls the product price, via a lowest-price matching algorithm.
    • competing with your own website eCommerce store.
  • Amazon can sell your products through its other country sites;
    • This can create conflicts with subsidiaries you may have in other territories;
  • You will be expected to commit significant budget for Amazon advertising campaigns;
  • Once you achieve significant sales, Amazon will push to renegotiate a further discount on their wholesale prices;
  • If you later decide you wish to switch to the Seller model, Amazon can penalise/blacklist your business for a period after you have terminated your Vendor contract.

Seller Central

This option gives sellers complete control over all aspects of their Amazon sales activity.

Unless you use FBA (Fulfilment by Amazon) with Seller Central, you won’t just have to manage all the logistics, you’ll also be responsible for all the customer service tasks.

  • Provides the greatest level of freedom;
    • Complete control over pricing;
    • Complete control over product range;
    • Control over where your products are sold.
  • Sales will grow more slowly than with the Vendor model.

Where responsibilities in the Seller model lie:

Seller centralAmazonYour business
Dispatch
Returns
Refunds
Pricing
Product quality
Amazon Ad campaigns
Product listing page content
A+ content
Store page content
Customer services

Can I sell on Vendor AND Seller central?

You cannot sell the same SKU in both.

But, for example, you could sell you big volume items through the Vendor model and your more niche and end-of-line items through a Seller central store.

Vendor central vs Seller central costs

Vendor central costs

  • You are selling stock to Amazon at wholesale prices;
  • Budget for AMS campaigns (Amazon Marketing Services)*;
  • Budget for AMG campaigns (Amazon Media Group)*;
  • Shipping stock to and from the Amazon warehouse;
  • Premium Vendor Service fee;
  • Any Amazon specialist support, like copyrighting or other specialist assistance you may request.

*typically Amazon can demand you pay 4 – 10% of the total value of the account towards marketing costs.

Seller central costs

Amazon offers Basic and Professional versions of the Seller central service. This list looks at the Professional version.

  • Monthly subscription fee;
  • Sales commission – dependent upon your product categories (7-15%, with device accessories at 45%;
  • Fixed fee per item (£0.75). Sometimes partially or completely waived for larger accounts.

For more specific information, Amazon provides a list of Seller central fees or use the Amazon fee calculator.

From 1 September, 2020 Amazon are passing on the new UK Digital Services Tax to their sellers, this will lead to a small increase in some of these fees.

References

  1. https://www.theguardian.com/business/2019/mar/07/almost-90-of-uk-shoppers-use-amazon-research-reveals
  2. https://www.uktech.news/need-to-know-2/amazon-dominates-30-of-uk-ecommerce-market-in-2019-20191213
  3. https://www.theguardian.com/business/2019/mar/07/almost-90-of-uk-shoppers-use-amazon-research-reveals