Selling on Amazon Vendor Central is the business equivalent of having a baby.
In many ways, it’s the best thing you’ll ever do. The platform brings in huge revenue, and offers substantial benefits in terms of brand control and customer support. For many scaling businesses (as well as big, multinational brands), it’s far and away their most valuable sales channels.
But it’s also incredibly challenging. As anyone who’s even lightly dabbled with Amazon Vendor Central will tell you, it’s a complex platform. The UX and interface aren’t great, the language can be opaque and some of the processes are frankly baffling. And these are just the superficial issues. Dig a little deeper, and things don’t get much easier: seeing results from Amazon Vendor Central requires resource, expertise and strategic thinking in large and equal measure.
Like parenting, it’s helpful to have a support network of people who’ve done it before around you. I’m one of them. Over the last 7 years, I've helped lots of scaling businesses build a more profitable relationship with Amazon, and troubleshoot the many issues that crop up along the way.
There are 6 that I see repeatedly. Knowing what they are, and thinking in advance about how to tackle (or even better, avoid) them means you’ll be much quicker to realise revenue and grow on Amazon Vendor Central. As they say, preparation is the best form of defence. So, here’s what you need to prepare for:
Third party sellers can cause big headaches on Amazon. If your products are already in the wider market, there’s a good chance they’re for sale on Amazon via third party sellers.
While elsewhere those additional distribution channels might be useful, on Amazon it can mean you’re often competing against your own products. What’s more, third party sellers can run riot with your listings and pricing. It can be a struggle to prove your authority over those listings, and to make the required changes in order to optimise them and protect your brand integrity. Not having full control of your brand on Amazon can seriously impact your sales potential.
e-Commerce has exploded thanks to Amazon – and though that’s a huge opportunity, it also means there’s much more competition in the market than there was 10 years ago.
Without a strategic approach to the way you list, optimise and nurture your catalogue, you will struggle to drive growth. Understanding what your highest opportunity products are, who you’re competing against and how to leverage your product data is critical. If you’re just ‘listing and forgetting’, you’ll cut some complexity, sure – but you’ll also cut sales dead.
One big challenge with the platform is knowing where to focus to drive growth. While there are a lot of shiny bells, whistles and levers to pull, there’s also a short answer: cut overheads.
Amazon Vendor Central will try every trick in the book to erode your margins – through terms, chargebacks, advertising, you name it. Faced with all this, a lot of business owners get overwhelmed, and fail to recognise the simple ways they can save costs. Amazon isn’t the place to try and run before you can walk. Ensure you have the operational fundamentals in place and optimised first if you want to scale.
Amazon makes a huge amount of its revenue from advertising, meaning that it’s actually in their interests to bump down organic listings like yours. It can be very hard to win customer attention, and that's before you even factor in the enormous amount of competition there is in every category.
You won’t get far without some advertising, and that can be very expensive. There are some cheaper options to supplement your brand position (Google PPC, social PPC, email and influencers, for instance), but it’s worth thinking about what you can realistically afford, and managing your expectations accordingly.
The data Vendor Central offers you isn’t brilliant. While changes and improvements are underway, it can still be complex to understand the platform’s metrics and crucially, your performance.
There are some esoteric success measures you’ll need to get your head around regarding purchases, sales, stock, forecasting, listings, traffic, conversion and Buy Box. Make sure you’re well-equipped to gather and use the data available – otherwise you risk losing money.
With so many challenges to wade through, you can wind up spending a lot of time firefighting on Amazon Vendor Central, and still not driving growth.
As I said at the outset, Amazon Vendor Central requires a lot of resource, expertise and strategic thinking. If you can’t commit to that, it may not be the channel for you. Without a big picture plan and the people to drive it forward, you might struggle to see returns.
The Strategic Guide to Driving Growth on Amazon Vendor Central in 2024 gives more detail on these challenges, some starter questions to help guide your thinking about them, and some tips to get you started.
Like parenting, you’re unlikely to avoid tears and teething problems along the way – but that’s where I can help. Get in touch if you need more support. I’ll be happy to talk you through both the tactical and the strategic choices that will help you scale on Amazon Vendor Central.