In 2019, Amazon already had more than 2.5 million active sellers. The Marketplace platform has more than 30 different categories of products. Among them there are cosmetic, technological or children's leisure products. In this way, it covers all kinds of companies and individuals who decide to diversify their market and open up to new horizons.
Within the platform, there are two main types of sellers: vendor or seller. Each one has its own characteristics, advantages and negative points. Therefore, it will depend on each specific case to choose one or the other. Read on to learn the difference between vendor central and seller central.
Amazon Vendor Center
What is Vendor Central?
Amazon Vendor Central is a service through which a seller, whether a company or an individual, can sell their products through the platform. However, Amazon does not act as a bridge for the product to reach the customer, but acts as a client.
To make it easy to understand, the seller acts as a supplier. In this way, your products are sold like Amazon. At the same time, the platform is in charge of deciding the price of the product, removing all responsibility of choice from you. All you have to do is create a product that is attractive to the e-commerce giant and wait for it to do it all for you.
How to enter Amazon Vendor?
You cannot enter Amazon Vendor for free, the decision is Amazon. In this way, not everyone can access this service. In this case, it is the platform that sends you an invitation in the event that it considers that you are suitable to be part of the Amazon Vendor.
Amazon follows an algorithm to include its suppliers. Taking this into account, we could mention several situations in which the company could be interested in you. The first one is that you are a seller with many sales. If you are selling a series of products, which are climbing the rankings of that category and generating many conversions, Amazon alarm bells may go off.
In case you are a well-known brandYou will not need to go through this process. Amazon already knows that you have a strong, loyal audience and that your products are in high demand. In this way, they know that your offer succeeds in the market and does not need further proof.
On the other hand, if you are vendor in Amazon Seller CentralAmazon will likely find you and invite you to join Vendor Central.
How much does it cost to get into Amazon Vendor Central?
Entering Amazon Vendor Central does not imply no financial expense, since you are selling your product. However, becoming part of Amazon's suppliers ends up having economic costs.
First of all, when entering Amazon Vendor, you will have to dial a Minimum Advertised Price or MAP. This translates into your pricing policies, the cost you want consumers to pay for the product you are offering. However, if it doesn't sell well, Amazon will proceed to lower the price, seeking to please customers. In this way, it is difficult for you to sell your product in your other sales channels, since users will always prefer the cheapest option.
In addition to this, you will have to pay for the marketing and advertising fees that Amazon does to make your product sell. There are also packing fees and cooperatives, the latter referring to the cost you must pay to be able to benefit from carrying the Amazon name.
Amazon Seller is the platform through which you can sell your products to the final consumerl, taking care of all the procedures, choosing the sale price and taking care of returns and shipments. This is undoubtedly the main difference between vendor central and seller central.
Amazon FBM or FBA
Regarding logistics, you can decide between doing it yourself or having Amazon do it. The first option is the call Fullfilled by Merchant either FBM and in this case you will have in your store the stock of your products and you will have to take care of distributing them. Clearly, both the packaging and everything it entails the logistics will be on your account.
One of the benefits of Amazon FBM is that you will have at your disposal the geographic and demographic data of your clients. This information is very valuable and with it you will be able to reorient the firm's campaigns or improve the product to achieve more sales. At the same time, since returns will be part of your responsibilities as a seller, you will be able to know what your product is failing and what does not convince the client, in order to solve it.
As for the disadvantages, you will have to meet a series of very demanding requirements. Among them is the response time to the messages that users write to you through the chat. The answer should be received in less than 24 hours. Otherwise, Amazon will penalize you. In addition, the company will also monitor the quality of the service. It does this based on 3 criteria: Negative feedback and claims. In addition, Amazon will also review late shipments, allowing a maximum of 4% of the shipments of the last 30 days. Finally, the cancellations of shipments that you make will have to be less than 2.5% in orders placed in the last 7 days.
If you choose the FBA or Fulfilled by Amazon plan, the company will take care of everything, both for the storage of the products and for shipments or returns.
With this plan, sales get an increase, because the visibility of your products will be greater since you will be able to opt for the free shipping and to prime service. On the other hand, you will be able to sell outside of Spain and expand your market to those countries where it has the greatest potential. As if that were not enough, Amazon FBA includes a 24/7 customer service, which works 24 hours a day, 7 days a week.
As expected, the FBA plan also has its drawbacks. The first one is that you lose access to all information about your buyers, so you will not have valuable information to personalize your products and services and make them more attractive to your target. Besides, Amazon can cancel you if you don't meet their requirements.
How to enter Amazon Seller?
On Amazon Seller All those people or businesses who want to sell their products can enter on the great Marketplace platform. The first thing you will have to do is decide the account plan you want to use: individual or professional.
Regarding the individual seller account, it is designed for all those who want to start selling on Amazon and who are going to offer a maximum of 40 products per month. By choosing the individual plan, you will only have to pay Amazon when you make a sale, which in this case would be €0.99 per product.
As for the professional seller plan, this type of account can be present in all Amazon categories, create new products in the company listings or allow your products to be purchased just by clicking. Here, the cost is €39 per month.
Finally, you can create your seller account from your own customer account or do it with a new email.
How much does Amazon Seller cost?
Beyond the fixed cost of the individual or professional account, when you become a seller on Amazon you will have to pay certain fees.
- Referral Fee: refers to the percentage that the platform charges you per sale and is calculated including shipping costs in the price. This percentage varies according to the category of product in question. The minimum is 5% and the maximum is 45%.
- Sale Closing Fee: It is the one that must be paid only by individual seller accounts and supposes a closed cost of €0.99.
- Fee per item sale: This is only applicable to some product categories, such as those related to music, software or video games. It varies between €0.81 and €1.01.
Difference Between Vendor Central and Seller Central
The main difference between Vendor Central and Seller Central is What role do you play in the sales process?. In Amazon Seller, as we have explained previously, you perform the seller's function, the supplier being the one that you decide. As for Amazon Vendor, you are the wholesaler and Amazon your customer.
While to access Seller central you only need to register and access is not limited, in Vendor Central you need an invite by Amazon. This invitation will arrive by email and will follow the patterns set by the Amazon algorithm when choosing or discarding you.
In Amazon Seller Central, you you freely decide the price for which you want your products to be sold. Obviously, competition and the market will play a big role when choosing a price, but the decision will always be yours. On the other hand, with Amazon Vendor you assign that right to Amazon, being unable to do anything about it.
Rates are other elements that change. In Amazon Vendor Central, the fees to be paid are marketing and advertising fees, remittance fees, packaging fees, and cooperative fees. Sometimes, the sum total of the fees is greater than the revenue earned with sales.
As for Seller Central, the rates are the reference, the closing of the sale, the items sold and the Professional Plan fee if chosen.
Regarding payment, within Amazon Vendor there are different options. The first one is to receive payment for the sale in a within 90 days. In the event that you want to receive it in a shorter period, Amazon will keep a 1% if the term is 60 days and with a 2% if it is done within the first 30 days.
Instead, Amazon Seller makes payments in a minimum period of 7 days and within a maximum period of 14. Depending on whether buyers pay before or after the order, payment will be made by Amazon Payments, Inc. or Amazon Services LLC.
The last difference between vendor central and seller central is order delivery. By being part of Amazon Vendor, you will not have to worry about shipping orders or that they arrive within the agreed period. This responsibility falls on Amazon, who will be in charge of everything going as it should.
However, with Amazon Seller you can choose between putting it in the hands of Fulfillment by Amazon or doing it yourself. If you choose this second option, you will have to take into account that failure to meet deadlines entails a penalty.
The same goes for inventory. In the case of being a seller, you will have to take into account your inventory and replenish it so as not to run out of products in stock. If you are a provider, you will not have to worry about this matter.
In short, depending on the magnitude of your company and your situation, it will be more convenient for you to associate with Amazon Vendor Central or Amazon Seller Central. Both methods have their advantages and disadvantages.. Therefore, you will have to see in depth which role brings you the most benefits, whether that of a seller or that of a supplier. In the end, it's about seeing how the pros side of the scale outweighs the cons.