Amazon presents a huge opportunity for brands to build online sales by having access to Amazon’s already well established customer base. For many looking to sell on Amazon, the journey starts with Amazon Seller Central. But for bigger and/or more established brands there’s a different, exclusive option that can take your brand to a whole new level, this is Amazon Vendor Central.
So what is Amazon Vendor Central? Well, whereas Seller Central is very seller led throughout the whole process, including stock, delivery, returns and customer service, Vendor Central is almost completely hands off for vendors. Amazon places a bulk order of your products at a wholesale price, then from there almost all of the fulfilment lies with them.
There are aspects of the consumer journey that you still have a part to play in as a vendor, such as still managing the wholesale price, product descriptions and PPC & other advertising activity, however, your main job is to fulfil Amazon’s purchase orders.
How do I join Amazon Vendor Central?
Perhaps the biggest difference between Amazon Seller Central and Amazon Vendor Central is the fact that Seller Central is open to everyone and has very few barriers and restrictions and Vendor Central is strictly by invitation only.
How d I get invited to Amazon Vendor Central?
Your next question then is probably “how do I get an invite?” and the unfortunate answer is, you can’t. There is no application to fill out, no subscription to sign up to and no referrals from other businesses on there. It is Amazon and Amazon alone that can invite a business to join their Vendor Central and there isn’t a lot a brand can do to influence this.
There are, however, a few common ways brands are “discovered” these include:
- Demonstrating that you are a brand focused business through Amazon Marketplace as a Seller with your own branded products
- Being a brand where Amazon can see evidence of strong demand
- Exhibiting at Trade Fairs where Amazon scouts notice your business
Amazon will only be looking to invite businesses they believe will help them turn a profit from the sale of products, so by having a quality product, at fair prices with good customer service and reviews is going to help get their attention.
If/when you are invited, Amazon will then lay out their terms, including the wholesale price they’re looking to pay.
Can I Set the Price They Sell my Products for?
Amazon sets the pricing to ensure maximum profitability. This means that if necessary to compete with others in the same space, Amazon will reduce the price it sells your product for in order to increase volume of sales.
Amazon states it honours any MAP (Minimum Advertised Price) request. However, there have been instances of vendors claiming that this is a false statement and Amazon will do what it takes to offer its customers the lowest price possible
It is important to take into consideration that if you choose to sell on Amazon as a Vendor, you should only expect wholesale margins, not retail margins.
When do Amazon Vendors Get Paid?
Unlike the 14 days (on average) that those selling on Seller Central have to wait for their payments, Amazon pays vendors under one of three different sets of terms. These are:
- 30 Days (with a 2% discount in Amazon’s favour)
- 60 Days
- 90 Days
For many vendors the longer two payment terms can create cash flow issues which can mean that the brand has to take out a bridging loan to plug the gap in order to keep up with stock. This is a reason why Amazon Vendor Central is better suited to those already accustomed to these more traditional payment terms.
Is there support available?
Those new to wholesale may be daunted by doing business with what is literally the biggest company in the world, however there are agencies that can be employed to help you along the process.
These agencies can handle one, or all aspects of your relationship between you as a vendor, and Amazon, across different areas such as:
- Logistics, including fulfilment
- Reporting & Forecasting
- Customer Service
- Marketing & Advertising, including Amazon PPC, SEO and Content Writing
- Inventory Management
- Market Research
Amazon agencies include Arthia for example, a full-service Vendor agency based in London.