Partnering with Amazon and becoming its seller isn’t the only way to earn money. There are a few other ways that you can utilize. Rather becoming a seller, you can think of selling directly to Amazon and in turn, they will sell the products for you. Sounds like a good plan? We call this “Amazon Vendor” and differs greatly from “Amazon Seller.” So, let’s understand what it is and what is the Amazon vendor central pricing.
Vendor Central is Amazon’s portal, which helps
in facilitating business between private vendors and Amazon.
One of the key factors of Amazon’s successful business, especially in selling books is due to this platform. This program welcomes both individual sellers and vendors–the ones who have complete distribution rights or liberty to titles.
help of this program, a Vendor sells directly to Amazon and in turn, Amazon sells
to its buyers. On the other hand, an Individual Seller pays Amazon a specific fee
for using Amazon’s platform as a place for selling to customers and potential
Vendor Central is more like a web interface,
which helps a vendor satisfy his or her customers’ needs, efficiently and
smoothly. The portal of Vendor Central lets a vendor (only the ones who have
received an invitation from Amazon) to do business with amazon.
is set up, a vendor receives payment from Amazon every month, but on wholesale
terms. Now, before this can even happen, a buyer places an order from Amazon directly
and pays the respective amount. Then, Amazon ships the merchandise.
a buyer is purchasing directly from the vendor, the respective product page
specifies this immediately:
“In Stock, Shipped and Sold by amazon.com.”
If you recall properly, you will realize that this business model is pretty much same to Amazon Fulfillment Program and its self-service consignment program.
Amazon Vendor Central Pricing
If you use
Seller Central, the charges work based on pay-as-you-go fee. For an individual
seller, it includes 0.99 cents per item whereas $39.99 for a Professional
about Amazon Vendor Central, you might think that it is not going to cost
anything because it is Amazon who is buying things from you.
To utilize their internal support
(example: “X” person has worked for you so and so hours per day. This is added
up with the annual fee)
To access their Premium Vendor
Services (which starts at $30K per year)
Since Amazon makes use of wholesale pricing for
Vendor Central, it generally asks a vendor to pay 4% – 10% to cover slotting
and marketing costs. Once the sales increase, Amazon might also request for more
active account support fee or marketing fee.
Does Vendor Central Include Any Tax or
entirely depends on where you are planning to sell.
example, in Europe, you will have to pay VAT taxes. Under EU regulations, it is
mandatory for Amazon to charge an appropriate VAT fee on monthly basis – even
if the seller has not made any sale.
Additional fee to consider are:
Shipping cost to send the inventory
to Amazon’s fulfillment centers
International return shipping cost
International shipping cost
Conversion cost associated with
being paid in your home currency
Customer support cost
Taxes & duties
Translation cost for listing
Amazon Vendor Central vs. Seller
you decide to expand your business by selling on Amazon Marketplace, you
certainly will have confusions choosing between Seller Central and Vendor
is not direct but rather depends on how you have positioned your brand in the
market. So, let’s understand the difference between these two in detail so that
you can come up with better conclusions or decisions.
1. Vendor Central vs. Seller Central: The
The day you decide you to sell your products on Amazon, you will sell as any one of these two:
Though these terms rhyme the same, there is a huge difference between the two and requires a proper understanding.
If you become a first-party vendor, you will use Amazon’s Vendor Central either as a manufacturer or a distributor.
Here, you will sell your products to Amazon in bulk, and Amazon will sell those for you under its brand name to its customers.
Amazon features millions of products on its website, you can easily spot the
difference between the items that are offered by Vendors because they generally
come with a blurb in the description, which says: “Ships from [vendor name] and
sold by Amazon.”
If you become a third-party seller, you will use Seller Central.
Here, you still have the option to choose FBA (Fulfillment by Amazon) so that Amazon takes care of all your shipment and order delivery while you sit back and relax. However, you do not wish to do this, you can handle the shipments all by yourself.
2. Vendor Central vs. Seller Central: The Pricing
If you want
to become a seller who has the accessibility to set minimum or maximum pricing
for your products and take complete control, then Seller Central works the best.
that it honors any MAP (Minimum Advertised Price) request. However, many
Vendors have complained that Amazon hardly does so. Keep in mind that Amazon
promises its customers with the lowest price possible and does everything to
match the best price.
In the case
of doing so, if someone reports them that there is better and cheaper price that
you are selling somewhere else, Amazon doesn’t take much time to bring your
price down. This is exactly when the actual war for price begins. And this
It is hard for Amazon to increase the price back. However, the case with Seller Central is different. A third-party seller can set his or her price for a product. They have complete freedom to control the prices.
3. Vendor Central vs. Seller Central: The Support
If you are
looking to associate with Amazon in a way that it supports you when something
goes wrong, then Seller Central is the way to go. If you are going to become a
Vendor Partner, good luck in getting that feature.
is that you are unlikely to get any support from Amazon unless your brand is highly
popular or you are paying lots of money to Amazon. But with Seller Central, you
get a decent support. Amazon provides Seller Support to
problems associated with payments, inventory, and listings.
In Vendor Central, there is nothing. Also, you get more flexibility with Seller Central while updating your product listings. This includes changing product titles, bullet points, descriptions, images, and so on.
4. Vendor Central vs. Seller Central: The Cost
So, how far can you go to bargain? Do you know the right way to negotiate? If this is not you you might struggle as an Amazon Vendor.
Well, Amazon will try to negotiate with you for the best wholesale price possible for your products so they can make an incredible profit margin. And trust us, they are good at this. They have mastered this art already. They talk to hundreds of vendors this way every day. So, handling a vendor like you is no big deal.
negotiating with you, they can ask you for 4-10% pay to cover the “slotting
costs.” And don’t be astonished if Amazon once again negotiates with you for a better
price if your sales increase.
But none of these will be a concern if you go with Seller Central. Rather, you will pay a standard fee (8-20%) and that’s the price percentage for every item that sells. If you opt for FBA, then you will be paying a little extra.
5.Vendor Central vs. Seller
Central: The Profit Margins
above, Amazon will execute every trick to negotiate with vendor partners just
to ensure that their profit margins go up. Good for Amazon but what about a
vendor’s profit margins?
that if you choose to sell on Amazon as a Vendor, you can expect only wholesale
margins. But the case with Seller Central is different. Here, you will get retail
So, this aspect is something you should look into before deciding.
Besides negotiating your price over time, it is also important to note that if you do not comply with their rules, the company may look for a supplier who offers better prices than you.
This is when your profits become zero but only with Amazon sales. However, the case with seller central is different. You will have complete control over the prices. You will still earn decent profit margins while still sustaining a healthy competitive edge.
6.Vendor Central vs. Seller
Central: Stock Availability
If you prefer
to become an Amazon Vendor, do not be astonished if Amazon sells all your
products and then suddenly says “stock unavailable.” Amazon can send that
message without a “low inventory” alert. Amazon trims down the stock of some
products frequently, preventing the risks that they might never sell.
Central, you have better control over your stock. You can either store it in Amazon
fulfillment Center or at your office or if you are using FBA. Note that storing
your inventory at Amazon’s fulfillment centers come with a fee, depending on
the space you utilize.
7.Vendor Central vs. Seller
Central: The Payment
starters, Amazon’s terms can cause cash-flow issues. Generally, Amazon offers
2% Net 30, 60, or 90 terms. And vendors who prefer Amazon Retail will have to
hire separate third-party firms to give Amazon a proof that the goods were truly
delivered to them.
If you cannot
deal with such headaches, you shouldn’t go for Vendor Central. Seller Central
partners, on the other hand, are paid once in every 7 – 14 days. Yes, these
payments are made after subtracting their sales commission and other FBA fees. However,
the payment is faster.
8.Vendor Central vs. Seller
Central: Customer Service
So, this is one point where Vendor Central actually wins. That’s because Amazon takes care of all every aspect in terms of support, even including problems associated with fraud. Seller Central partners can use FBA (Fulfilled By Amazon) to take care of customer service. But, the seller is still responsible for every customer who claims of receiving counterfeit or fake products.
If you sell as a third-party seller on Amazon, you will find it more hard to challenge fraudulent competitors.
9. Vendor Central vs. Seller Central: Selling
If you are
interested in selling your products to customers other than the U.S. market,
you must go with Seller Central. This is because expanding to foreign markets
is easier with Seller Central than Vendor Central.
Vendor Central partners can sell only in the United States marketplace–which is Amazon.com. If you desire to sell on Canada (Amazon.ca) or Mexico (Amazon.mx), you can sign-up for a unified North American account to sell your items across the border.
Quick Facts About Vendor Central
Here are a
few things to make a note of:
Vendor Central Program can be enrolled via invitation only
You will have less control while setting the price for your products
Here are a
few important questions and answers related to vendor central to make a note
1. Can you have both seller central and vendor
can have both accounts. It is a policy violation only when you have two seller
accounts. It can lead to account suspension.
2. Can anyone join vendor central?
anyone can join seller central, enrolling into vendor central program requires
an invitation from Amazon.
3. How can you get invited for vendor central?
Generally, Amazon invites brands who have recorded high sales with their Seller Central account. In that case, even you can request for an invitation, but there isn’t any guarantee you’ll receive one.
4. Who takes care of vendor shipping?
In the case
of vendor central, Amazon ships all the orders to its customers.
5. How long does it take for Amazon to pay its
The payments for vendors are slower when compared to seller central partners. It will pay most contracts on net 60 terms along with an invoice. Payment time hugely varies and you never know when it will be received.
6. Is seller central more expensive or vendor central?
there isn’t any item or monthly fee associated with Vendor Central program, it is
more expensive. Amazon takes out its marketing fee, remittance fee, pre-payment
fee, and packaging fee. You might also come across a few unexpected costs while
buying A+ content and other chargebacks if you forget to label the items or fail
to package your products properly.
compared, seller central is more beneficial than vendor central. However, if
you are running a firm with a manufacturer or distributor, consider becoming a
vendor central partner.
Note that you are more likely to come across a few challenges, especially if you are running a small business. Be patient with payments and managing your own stock carefully.