Selling on the Amazon Marketplace as a third-party seller is getting more profitable with each passing year. As of the second quarter of 2021, 56% of sales on AMZ were by third-party sellers, according to Statista. Because of this rapid growth, many vendors are already thinking of switching from Amazon Vendor Central (V.C) to Seller Central (S.C.). And it is not surprising, given how many vendors feel that they can make more money as a seller.
But before we can get to the bottom of this, we should first ask ourselves: what is the difference between a vendor and a seller on Amazon? While it may appear to be one and the same in layman’s terms, the two are quite different. In this article, we’ll talk about the difference between a vendor and a seller when it comes to AMZ. We’ll also tackle the process of switching from Amazon Vendor Central to Seller Central to help aspiring third-party sellers.
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Seller vs Vendor: What’s The Difference?
With over 300 million registered subscribers on the platform, AMZ has one of the biggest marketplaces in the world. And because of that, it can be easy to get lost when it comes to the business part of this platform. There are two main terms used to describe the people selling on the platform: Sellers and Vendors. But in reality, what’s the difference between the two?
The main difference between vendors and sellers is who will be primarily selling your products. Vendors sell their products directly to the AMZ retail team, which then purchases and resells these products to their customers. Sellers, on the other hand, do not directly deal with AMZ. Instead, sellers interact directly with Amazon’s customers. Since there are many significant differences between the two, fully understanding the differences as well as potential opportunities between them is important. This could even influence your decision with regard to how you want to run your AMZ business. More importantly, it can make you think about switching from Amazon vendor central to seller central.
Amazon Seller Central holds huge profit potential, and many vendors are looking to switch to Seller Central as a result. Besides, vendors suffer many downsides from heavy reliance on their relationship with AMZ. vendors have previously been affected by reductions in or cancellations of purchase orders. Also, with limited control over their prices and inadequate support, it is only logical to seek a viable alternative.
If you’re already a vendor who is wondering how to switch to S.C., we’ve got you covered. In this article, we’ll help you learn the differences between the two platforms. We’ll also learn how to switch from Vendor Central to Seller Central.
Comparison of Amazon Vendor Central and Seller Central
Vendor Central (V.C.) is the online platform on which first-party sellers do business with AMZ. These first-party sellers are manufacturers and distributors who sell goods wholesale to Amazon. in turn, sells the goods to customers under their brand. V.C. is an invitation-only platform.
Seller Central (S.C.), on the other hand, is the online platform on which third-party sellers sell goods directly to buyers. Unlike being a vendor, S.C. is open to anyone, and businesses of all sizes, as well as individuals, sell goods on the platform.
Here’s an overview of the differences between both platforms:
|Amazon Vendor||Amazon Seller|
|Seller sells to AMZ and has no direct contact with customers||You sell directly to customers|
|Amazon sells goods to customers and ships orders directly to them.||You fulfill orders either by themselves (FBM) or through Amazon (FBA)|
|The seller has no control over retail prices||You have full control over retail prices|
|The seller has less control over product launches||You have greater control over product launches|
|Greater customer trust because items are indicated to be “shipped from and sold by Amazon”||You must learn to earn customer trust|
|Less control over inventory||More control over inventory|
|Higher volume of sales||Higher profit margins|
|Access to data and insights on Retail Analytics||Access to data and insights on Brand Analytics (for sellers enrolled in Brand Registry)|
What Being A Seller offers
Before you decide whether you should switch from Amazon Vendor Central to Seller Central, it is important to know the differences between the two seller accounts. Here are the main things that separate the two:
The opportunity to sell is open to everyone
In this platform, the opportunity to register as a seller is open to anyone who wants to join. Aside from the requirements such as bank accounts, name, identification, etc, there isn’t really any gatekeeping that happens here. As long as you can fulfill the registration requirements, you are free to sell.
Sell directly to customers
One of the biggest differences that this platform offers is the ability to sell to customers directly. You don’t need a middle man to cut in between your transactions. The customers can simply go to your store, add to the cart, check out the products, and pay for the order. This means that you can also create your own customer list to market to.
More logistical and fulfillment options
When it comes to S.C., you can either choose to use FBA (fulfillment by Amazon) or FBM (fulfillment by merchant) to send orders to your customer. Under FBM, you are the one who picks, packs, wraps, and ships the product using your courier of choice. On the other hand, FBA uses the network and logistics of AMZ to fulfill your customers’ orders. All you have to do is send your product over to their warehouse and fulfillment centers, then they will do the rest.
You control the retail price of products
Since you are directly selling to the customer in this method, then it only makes sense that you also have total control over your pricing. During shopping holidays such as Black Friday or Thanksgiving, you can offer hefty discounts to your customers in order to attract more sales. This flexibility in pricing can also help increase your profits if you can find a winning product that you can sell for more.
Limited advertising options
As a third-party seller on the platform, you are limited when it comes to the kind of ads that you can run. Mostly, pay-per-click ads that target certain keywords related to your niche product are the most popular way to market your listings. While this method works, having a much wider option is always a welcome addition to third-party sellers.
Sales Process can be complex
Since you are selling directly to consumers, the sales process can be a bit more complicated. Aside from selling, you also have to deal with customer relations, refunds, returns, and exchanges. While this can be mitigated by using FBA to handle your customer service, the multitude of avenues in selling can still be daunting.
What Being A Vendor Offers
Now that we know what being a seller offers, here are some things that being a vendor offers. After reading this, you can decide whether you want to switch from Amazon vendor central to Seller Central.
Vendors are accepted via Invitation only
Unlike sellers who can easily register and sell as long as they have an inventory ready, vendors can only sell if they are invited by AMZ. Because of this, it can be difficult to enter the platform if you don’t have a huge capital or a big manufacturing facility that can handle the bulk of AMZ’s orders. This can really influence your decision to switch from Amazon vendor central to seller central.
Sell directly to Amazon
When you are a seller, you transact with customers. However, when you are a vendor, you are dealing directly with AMZ and its personnel. This means a stricter procedure that you have to follow before your product can be accepted. It also means more quality checks to ensure the highest quality of products sold. If you find it difficult to deal with these conditions, you might want to try switching from Amazon vendor central to seller central.
Fixed Logistical and Fulfillment Options
Since you are sending products directly to AMZ, you have no flexible fulfillment and logistical options. This is contrary to the S.C. where FBA and FBM can be viable options for fulfillment.
You don’t control the retail pricing
Since you aren’t selling directly to consumers but instead you are selling to AMZ, you cannot simply change your price anytime you want. Once you have agreed on a price per unit with AMZ, you have to commit to that price until you are able to re-negotiate another contract. If the ability to change pricing is somewhat important to you, changing from Amazon vendor central to seller central is something you might want to explore.
Traditional Sales Process
Since you are basically dealing only with AMZ and their personnel, you don’t have a complicated sales process. All you have to do is deliver AMZ’s bulk orders and you are good to go.
Switching from Amazon Vendor Central to Seller Central: What to Expect
As noted above, the Vendor Central and Seller Central seller accounts are quite different. The key difference is who is involved in selling the product to customers: Amazon is for vendors. Third-party sellers are for S.C. As such, any vendor looking to switch to S.C. should expect to be more involved in the sales process. If this is a deal-breaker for you, then switching from Amazon vendor central to seller central is something to consider.
Let’s take a look at some new processes a vendor should anticipate when becoming a Seller.
- Pricing: You have control over your pricing and can set the price of your product as you wish. However, competitive pricing also requires monitoring your competitors, demand level, and other factors, so that you can adjust when necessary.
- Fulfillment options: You have to decide what fulfillment model you want to use. You can fulfill customers’ orders by yourself under the Fulfillment by Merchant (FBM) model. Alternatively, AMZ can handle the fulfillment process for you under the Fulfillment by Amazon (FBA) model. If you choose FBA, you will have to pay FBA fees.
- Costs & Fees: Third-party sellers have to pay several fees to sell. They include subscription fees, referral fees, fulfillment and inventory storage fees (if using FBA), and so on. You will have to factor in these fees in your pricing and profitability model.
- Inventory Management: Sellers have greater control over their inventory, and are responsible for maintaining it. You will have to calculate your inventory turnover so that you can figure how much inventory is needed at different points in time.
- Customer service: As a seller, you are directly involved in customer communication and support. You have to handle inquiries, refunds, and returns. You have to put in your best to ensure your customer is satisfied, in order to get positive reviews. If you use FBA, Amazon will manage customer support for you. However, you may still need to handle some aspects.
- Analytics and reports: On your S.C. dashboard, you have access to different statistics and metrics that you can use to monitor your business performance.
- Accounting: As a seller, your financial responsibilities are greater. You have to handle sales reconciliation, tax compliance, and so on.
How to Switch Vendor Central to Seller Central: Step-by-Step Guide
- The first step is to contact your Vendor Manager to inform them of your intention to migrate your business operations to S.C.
- Create and set up an S.C. account. While adding your product listings, use the same ASINs, otherwise, you will have to start from scratch.
- If you intend to sell restricted products, obtain the necessary approval.
- Decide on the fulfillment method you would like to use, either FBA or FBM.
- Recreate your ad campaigns. You should also run a few test ads on to gain an overall sense of how it works.
- If you’re enrolled in the Brand Registry, transfer it from Vendor Central to Seller Central.
- Ensure that you can track inventory levels on S.C..
Both seller accounts have pros and cons. But Seller Central makes up for certain disadvantages of the Vendor Central platform, such as lower profit margins and less control over retail pricing. This makes S.C. a very attractive opportunity for vendors looking to make more money. First-party sellers can follow the above-listed steps to switch from Amazon vendor central to seller central.
To make the most of our business on S.C., you will need a seller tool to manage your processes. And this can be done with the help of third-party selling tools such as Zonbase. Voted as the number one most accurate and best-value software for AMZ, Zonbase can help you with its 13+ tools and services designed to make your business more productive.
With Zonbase, you can get reliable data for your product research, keyword research, product listing optimization, competition analysis, and more. You might want to switch from Amazon vendor central to seller central once you see the potential that Zonbase can bring you as a third-party seller.
See what Zonbase can do for you. Sign up for a free trial of Zonbase.