A Guide to Amazon Vendor Central

vendor central

Amazon Vendor Central serves as an online platform for large businesses to directly sell their products to Amazon as wholesale suppliers. It caters primarily to manufacturers and distributors seeking to distribute their goods in bulk to Amazon. Amazon then resells these products to customers with the ownership of inventory. Compared to Amazon seller central, getting a vendor central account is associated with more benefits such as increased brand value, free marketing, and reach to farther markets.

Amazon Vendor Central emerges as a boon for businesses looking to tap into the vast customer base of the world’s largest online marketplace. This article will discuss the essence of Amazon Vendor Central, its operational mechanics, advantages and challenges of becoming an Amazon Vendor.

What is Amazon Vendor Central

Amazon Vendor Central lets sellers upload their products to Amazon’s cloud. They are third-party sellers. It eliminates the need for sellers to store or ship their products physically, as Amazon handles all storage and shipping. Sellers are only responsible for fulfilling orders to Amazon. Becoming a vendor offers many benefits. These include lower overhead costs, simpler inventory management, and a faster sales process. However, sellers can only join Vendor Central if Amazon extends an invitation.

Upon acceptance, sellers must sign a Vendor Contract. It outlines many business terms. These terms include tax status, payment terms, return policies, and product liability. They also include other relevant details.

Features of Amazon Vendor Central

Amazon Vendor Central offers a variety of functions as the primary interface for vendors to communicate with Amazon:

  • Vendors can receive purchase orders from Amazon.
  • Vendors can utilise a well-organised Amazon dashboard for order and information management.
  • Vendors can submit updated shipment information directly through orders.
  • Vendors can store their product information, including images, pricing adjustments, and other details.
  • Vendors can access the advertising console for product marketing, including Amazon Vine, A+ Content, and other vendor marketing tools.
  • Vendors can review invoices and remittances conveniently on the Vendor Central platform.
  • Vendors can access various beneficial reports for their business needs.

Amazon Vendor Central Vs Seller Central

FeatureAmazon Vendor CentralAmazon Seller Central
Selling ModelWholesale model where vendors sell products in bulk to Amazon. Amazon then resells the products to customers.A retail model where sellers sell products directly to customers on Amazon’s marketplace.
Inventory OwnershipAmazon owns the inventory once purchased from the vendor.Sellers maintain ownership of their inventory until it is sold to customers.
Product PricingAmazon sets the retail price for products purchased from vendors. Sellers have full control over product pricing on the Amazon marketplace.
Product ListingAmazon creates and manages product listings for vendor products.Sellers are responsible for creating and optimising their product listings.
Order FulfilmentFulfilled by Amazon (FBA) or Vendor (SFP). For FBA, vendors ship products to Amazon’s fulfilment centres. Amazon handles storage, picking, packing, and shipping to customers. For SFP, vendors ship orders directly to customers.Sellers can use FBA (Fulfilment by Amazon) or fulfil orders themselves (FBM – Fulfilled by Merchant). With FBA, sellers ship inventory to Amazon’s fulfilment centres. Amazon then handles storage, picking, packing, and shipping to customers.
Customer ServiceAmazon handles all customer service inquiries and returns for products through vendor central.Seller Central provides customer support through FBA. However, sellers are responsible for addressing any fraud and counterfeit product issues.
Product ReturnsAmazon handles returns and customer refunds for vendor products.Sellers are responsible for processing and managing returns for their products.
Payment TermsVendors are paid on net terms (30,60, and 90 days) after Amazon receives and confirms the shipment.Sellers are paid every 7-14 days for their sales on Amazon, minus any fees.
Entry RequirementsAmazon must invite vendors to sell on Vendor Central. Amazon evaluates various factors, including brand reputation, product quality, and sales potential.Seller Central is open to all individuals and businesses.
Selling FeesVendors do not pay Amazon any selling fees.Sellers pay Amazon various fees, including referral fees (a percentage of the selling price), variable closing fees, and other charges. The fees depend on the product category and how the product is sent.
Brand ControlVendors have little control over their brand and product marketing on Amazon. Sellers control their brand and marketing on Amazon. 

How to Become an Amazon Vendor

91.8% of vendors aim to expand their presence on Amazon this year. However, selling on Vendor Central isn’t a straightforward application process—it’s by invitation only. Amazon must invite you to join. That is why Amazon Vendor Central is not popular as much. But it is a great way to boost a brand’s presence and profits. Once you become an Amazon vendor, the value of your products also goes up. 

Essentially, in Amazon Vendor Central you supply Amazon with your products, and they handle the sales. You won’t actively manage the selling process. Instead, you’ll be paid monthly on wholesale terms as a supplier. While it sounds simple to profit without sales hassle, in reality, it poses challenges like low rates, hidden fees, and complex terms. You’ll also be responsible for displaying your items and setting wholesale prices.

  • Major brands and manufacturers.
  • Companies that sell their products directly to Amazon through wholesale transactions.
  • Vendors with a well-established brand presence and a wide product catalogue.
  • Companies can meet Amazon’s strict requirements for managing inventory, product data, and logistics.
  • Vendors that have a proven track record of selling through other major retailers.
  • Brands that align with Amazon’s current product category priorities.
  • Companies that can provide competitive wholesale pricing to Amazon.
  • Manufacturers that can handle large-volume purchase orders from Amazon.
  • Vendors with robust supply chain and distribution capabilities to support Amazon’s fulfilment needs.
  • Brands willing to grant Amazon certain marketing and pricing controls over their products.

Advantage of Becoming an Amazon Vendor

Amazon Vendor Central offers a seamless selling experience, comprehensive analytics, and tools to optimise performance and drive sales growth.

Getting Amazon Vendor Status

Amazon offers various platforms for product sales, including Advantage, Vendor Express, and Seller Central. With Amazon handling inventory, pricing, shipping, and returns, vendors enjoy the prestige of partnering with a globally renowned brand. For vendors, it opens up new business opportunities and sales channels, leading to increased conversions. 

Vendor Central Dashboard

The Vendor Central dashboard offers a full view of available products. It has quick links for adding products, checking shipments, and managing invoices.

The Business Advisor feature provides sales insights and recommendations to optimise performance.

Tabs and drop-down menus offer detailed analysis, including order management and returns tracking. Understanding mechanics of sales informs strategic decisions and helps optimise product reach.

Features of Merchandising Section

The merchandising section offers deeper insights. It recommends campaigns and promos tailored to product categories and seasonal trends. Features like Amazon Vine and A+ detail pages make products more visible and credible. They do this by using the opinions of trusted reviewers.

Get Business Analytics Reports

Vendor Central provides retail analytics, packaging, and operational performance. Retail analytics reports analyse sales metrics, demand forecasts, and product performance. It aids vendors in product selection and optimisation.

The graphs show the products sold by category. They help vendors find top-selling categories and products. The reports highlight areas to improve. They give insights to boost efficiency and solve problems early.

Challenges in Amazon Vendor Central

Though Amazon vendor central is a boon for businesses to grow, there are many challenges as of now. By handlin these challenges, vendor central becomes more vendor-friendly.

No Room for Cost Increases: Amazon doesn’t approve requests to raise product costs, which affects margin protection.

Retail Price Protection Issues: Amazon can adjust prices without consent, violating MAP policies and declining pricing change requests.

Excessive Chargebacks: Vendor Central imposes confusing chargebacks, which impact margins with charges for factors outside vendors’ control.

Lack of Brand Control: Brands experience limited control over marketing, advertising, and brand consistency. Co-op fees offer minimal visibility on advertising spend.

Lack of Communication: Difficulty in contacting Amazon Seller Support, especially without access to a Vendor Manager is the number #1 challenge for 1P vendors.

Difficult to Negotiate: More than 64.5% of surveyed vendors describe their trade negotiations with Amazon as difficult, time-consuming, and inefficient.

Related read: How to File a SAFE-T Claim on Amazon?

Conclusion

Amazon Vendor Central is a beneficial platform for businesses to sell their products to Amazon in bulk. It simplifies the process for manufacturers and distributors, allowing them to reach a vast customer base. By understanding Amazon Vendor Central, businesses can maximise their sales on the platform.

FAQs

What is Amazon Vendor Central vs FBA?

Amazon Vendor Central is for brands and manufacturers selling wholesale to Amazon. At the same time, FBA (Fulfilment by Amazon) allows 3P sellers to store products in Amazon’s warehouses. Amazon then handles shipping and delivery. Vendor Central has less control but guarantees sales to Amazon. FBA provides more autonomy but involves competition in the marketplace.

Is GST required to sell on Amazon?

All vendors must give their GST number to Amazon when registering. If you sell only GST-exempt items, it might be optional. But if you start selling taxable goods, you must follow GST laws and provide your GST number to Amazon.

What is the frequency of payment on Amazon Vendor Central?

Amazon offers three payment options for Amazon Vendors: Net 30, Net 60, and Net 90. That is, vendors get paid after 30, 60, or 90 days. Since all these options involve waiting for payment, vendors might face cash-flow problems.

Who handles Amazon vendor central orders?

Amazon handles vendor-central orders. Vendors ship their inventory to Amazon’s fulfilment centres. Amazon manages the storage, picking, packing, and shipping of orders to customers. Amazon also provides customer service for these vendor-central orders. But, vendors are responsible for maintaining accurate inventory management and product data. Also, they have limited control over pricing, promotions, and the customer experience.