Amazon has changed the world of e-commerce. Getting your product into a major retailer used to be a monumental feat. Now, with Amazon Vendor Central, and its baby brother Vendor Express it is easier than ever to sell your product to a major retailer.
With that being said, Vendor Central is something that should be considered carefully. Let’s first explore the differences between Amazon Vendor Central and Amazon Seller Central. Then we will examine reasons why selling directly to Amazon might not be as good as it sounds.
What is Amazon Vendor Central as compared to Amazon Seller Central?
Amazon Seller Central is Amazon’s third party seller platform. Anyone can create an account and list their products against Amazon’s extensive catalog. With Seller Central, you own the inventory. You can either ship it yourself, or send it all in bulk to a Fulfillment by Amazon Warehouse, where they will ship it for you.
Seller Central gives you complete control over any listing you create. The downside with Seller Central is that you don’t get paid until after an item sells. The upside is that you have complete control over inventory, pricing, and (in most cases) the listing description.
Amazon Vendor Central is Amazon’s portal for first party sellers to sell their products directly to Amazon. Products sold directly to Amazon through Vendor Central are listed as “Sold and Fulfilled by Amazon”. Amazon places purchase orders with your company, and they own and sell the inventory. While Vendor Central is by invitation only, Vendor Express is a hybrid program that is open a to a wider range of sellers.
The upside to Vendor Central is that Amazon has the potential to sell high volumes of inventory and they offer premium listing content. The downside is that Amazon controls the inventory, pricing and listing descriptions. You do get some say in how your products are presented, but ultimately any changes are made at Amazon’s discretion.
Empty Promises by Amazon Vendor Central
When Amazon sends an invitation to join the Vendor Central program, it is accompanied by many promises about initial purchase estimates, enhanced brand content, and future sales volumes. Unfortunately, these empty promise are seldom realized.
The cold hard truth is that when you sell your product directly to Amazon, you give up control. Once you sell to Amazon, the inventory is theirs. They control the listing, they control the price, and they control the inventory.
Amazon promises a Vendor Manager (VM) that will personally manage your Vendor Central account. Your VM is your main point of contact. What they don’t tell you is that your VM is hard to get a hold. Worse yet, your VM is literally your ONLY point of contact. While issues in Seller Central are typically resolved in minutes by a large team of associates, issues in Vendor Central get bottle-necked and can take days or weeks.
There is a new problem arising in the Vendor Central community as well. Amazon is now demanding “additional funding” from sellers on product they have already purchased. It seems that if Amazon runs into market challenges, they reserve the right to come after you to help with the cost.
Amazon Vendor Central does offer enhanced brand content, but these enhancements have not proven to convert sales as effectively as promised. Ironically, certain portions of this enhanced content are now available to Seller Central sellers as well. With the newly revamped Amazon Brand Registry in conjunction with certain aspects of Vendor Express, it is now possible to benefit from enhanced brand content WITHOUT selling your inventory directly to Amazon.
Stay in control
The appeal of selling direct to Amazon is understandable. Do not brush the opportunity aside in haste. Take the time to learn all about the Vendor Central opportunity and weigh the pros and cons to determine if it is right for you.
At the end of the day, nobody cares more about your product than you. Can you really trust that a behemoth company like Amazon won’t mothball your product at the first sign of struggle?
Selling direct through Seller Central is the best way for most most products to have the best chance of success. It will require more work, but you will remain in control. You will control the inventory, the price, the listing description and the brand content.
If the work involved in selling direct to consumers sounds daunting, consider hiring a competent consulting firm like us (KCS Marketing Services). We specialize in Amazon product launches, Amazon SEO, Amazon keyword research, Amazon Sponsored Products, Amazon Brand Registry and Amazon Marketing Services. We commit to your success, and we prove that with our promise that we don’t make money unless you make money!