Amazon is the world’s biggest ecommerce marketplace by far, and its huge reach can be transformative for any brand who starts selling there. However, the Amazon platform you choose to sell through can have a huge impact on control, costs, cashflow, and long-term profitability.
The Amazon Seller vs Vendor Central debate can be confusing at the best of times, but it’s crucial to understand if you’re about to launch on Amazon and want to ensure the best fit for your brand’s unique needs.
In this guide, we’ll explore all the key differences between Vendor Central and Seller Central to help you arrive at the right decision.
The Difference Between Vendor Central and Seller Central
The main, basic difference between Vendor Central and Seller Central is in how Amazon handles your products.
Seller Central is Amazon’s third-party (3P) platform, where you sell directly to customers via Amazon’s marketplace. Under this model, you’re in charge of the pricing, fulfilment decisions, customer service, and Amazon marketing strategy.
This channel is open to nearly all businesses who register for an account, and is the primary entry point for many smaller businesses looking to benefit from broader marketplace exposure.
Vendor Central, on the other hand, functions as a first-party (1P) relationship. Under this model, Amazon will act as the retailer, buying products from you wholesale, and selling them on to the end customers. Vendor Central listings can carry a “Ships from and sold by Amazon” label, giving your brand an additional layer of trust and credibility.
Unlike Seller Central, selling your products on Vendor isn’t a simple matter of signing up. Vendor Central is an invite-only program, where Amazon selects brands with existing demand, solid supply chains, and a large operational capacity.
While there’s many more differences in how operating under each model works, the core distinction to be aware of is who owns the customer relationship and pricing control.
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Vendor Central |
Seller Central |
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Registration |
You receive an invitation from an Amazon Vendor Manager to join the Vendor platform. Your brand must meet certain criteria in terms of turnover, market penetration and the quota of new accounts they have for your specific category at that moment in time. |
You can register as an independent seller, sole trader or business at any time. |
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Customers |
You supply products to Amazon in bulk and they sell them on to their customers. Amazon owns and warehouses the stock they purchase from you, and products show as ‘Sold by Amazon’ on the marketplace. |
You create an offer against an existing or new product listing on Amazon. When customers purchase that product from you, you are responsible for processing the order in a timely fashion and ensuring the customer receives a satisfactory level of customer service. |
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Cost |
You supply Amazon on a wholesale basis, providing them with enough margin to sell your products at a competitive retail price (usually 10%-50%, depending on your product category). |
Referral fees (commission on sales), FBA fees (if used), selling plan subscription, with additional fees possible. |
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Price |
Amazon controls the selling price. Whilst they will factor in the retail price you have specified when setting up the product, they will reduce the price where necessary to win the Buy Box against third-party offers if their profit margin permits. They will also scrape other retail websites to see if their pricing is competitive and reduce accordingly. |
You set and have control over pricing, but are still competing for the Buy Box against other third party sellers (and potentially Amazon if they are stocking the product). You can deactivate your offer at any time. |
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Fulfilment |
Amazon fulfils orders automatically from its warehouses (unless the Vendor is fulfilling orders on Amazon’s behalf, via ‘Direct Fulfilment’). |
You fulfil the order from your own warehouse or 3PL, or if you are utilising Amazon’s FBA (Fulfilment by Amazon) service, Amazon warehouses your stock and fulfils orders automatically. |
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Prime |
Prime delivery by default. |
If you are utilising FBA (or ‘Seller Fulfilled Prime’) then your offer will have Prime delivery. Otherwise, you can specify the delivery charge and lead time for orders you are fulfilling, but should expect less search visibility and conversion rates. |
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Customer Service |
Amazon handles all customer service requests. |
You are responsible for responding to customer service requests, unless they are fulfilment related and you’re utilising FBA. In this case, Amazon will respond to enquiries. |
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Payment |
You agree to payment terms when signing up to Vendor Central. This is typically 60-90 days, but can range from 30-120 days. |
Amazon accumulates a balance in your account based on orders received. This is disbursed automatically every fortnight. Some Sellers are allowed to withdraw funds more frequently once an account history has been established. |
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Commission |
You agree to a specific rebate when signing up to Vendor Central, known as Amazon CoOp or ‘Terms’. This is typically 10%-15% initially, but is subject to increases and renegotiations on an annual basis. Amazon applies this rebate to any invoices you raise to them. |
Each product category has a specific commission structure, which is deducted from any orders received. This is usually 15%, but can vary by category. |
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Stock |
When Amazon’s algorithm sees that a product is in demand, they will raise a Purchase Order for that product. POs are typically raised on Mondays, but also Wednesdays and Fridays on high volume accounts. Amazon will typically build a stockholding on products that are selling well, which can often reduce the 60+ day payment terms. |
You are solely responsible for telling Amazon what you have in stock when you are fulfilling products yourself (known as FBM or Fulfilled by Merchant). If you are using FBA (Fulfilment by Amazon) then you are solely responsible for deciding how much stock to send in to Amazon and when to replenish it. Stock that languishes in Amazon’s warehouses due to weak sell-through will typically incur ‘long term storage fees’ after 6 or 12 months. |
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Returns |
You agree with Amazon how returns will be handled when signing up to Vendor Central. In some cases, they will send returns back to you and charge you for them, or agree a fixed rebate (for example 3%) to factor in returns and replacements. |
If you are fulfilling orders yourself, you must deal with returns requests from customers and decide whether they need to return a product to you before you raise a refund. If the order was sent by FBA, the customer can raise a return automatically. The return will be processed in an Amazon fulfilment centre, with that product either being placed back on sale or placed into ‘unfulfillable inventory’ due to a defect. |
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Advertising |
Advertising campaigns are set up and managed through the Amazon Advertising console. |
Advertising campaigns are set up and managed through the Amazon Advertising console. |
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Marketing |
Larger Vendors are often given preference when participating in deal events, such as Black Friday. Vendors can create marketing campaigns such as vouchers, deals and other placements, but they must be funded by the Vendor. Amazon will bill for these separately. |
You can create vouchers and deals within the relevant section in Seller Central. Any discounts will be automatically deducted from remittances. |
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Account Support |
Support tickets are filed through the support console in Vendor Central. They are typically responded to quicker and given more attention than those filed through Seller Central. |
Support tickets are filed through the support console in Seller Central. |
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Account Management |
New Vendor accounts are generally supported by a Vendor Manager for the first 6-12 months. After that you are on your own, unless willing to pay for an Amazon AVS Manager at a cost ranging from 3 to 7% in ContraCOGS, or a chunky additional rebate on invoices. |
Non-existent for Sellers. |
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Brand Registry |
Brand registration and infringement filings are made via the separate Brand Registry account. This can be ‘linked’ to the account when it’s necessary to show to Support you are the authority over that brand, and need to push through a specific listing update. |
Same as Vendor. |
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Data |
Large selection of reports available in dashboard and download views. More brand-focused data available if you are brand-registered and have Brand Analytics enabled. Very limited number of third-party tools due to limited historic API support. Many challenging measures and metrics to understand and comprehend. |
Large selection of reports available in dashboard and download views. More brand- focused data available if you are brand-registered and have ‘Brand Analytics’ enabled. Significant number of third party tools connected to Amazon’s API.
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The Costs of Amazon Seller vs Vendor Central
Like any other ecommerce channel, understanding Amazon selling fees is essential for forecasting your cash flow and the amount of operational bandwidth you need to invest.
Here’s a breakdown of the costs tied to selling through each channel.
Seller Central Costs
Operating via seller central involves a mix of standard fees and optional costs.
Here are the key costs you’ll need to plan for if you decide to launch on Seller Central:
Subscription Fees: Typically, professional Sellers pay around £39.99 per month for access to Seller Central, regardless of their actual activity.
Referral Fees: Amazon will take a percentage of each sale you make through Seller Central, usually around 8-15%, but this can vary depending on the category.
Fulfilment Fees: If you use Fulfilment by Amazon (FBA), you’ll be charged for packing, storage, and handling costs, with sizes varying by size and time of year.
Advertising Spend: Though Amazon advertising is technically optional, it’s practically essential if you want to compete for visibility.
Seller central costs are generally predictable and transparent, and give you the flexibility to only pay in proportion to the sales and services you choose.
Vendor Central Costs
If you opt for Vendor Central, you’ll work with a very different cost dynamic.
Wholesale Pricing Concessions: You’ll sell products to Amazon at a negotiated wholesale price, typically below the standard retail rate.
Marketing and CoOp Fees: With Vendor Central, Amazon will charge marketing allowances and promotion CoOps, typically starting at around 10-15% of invoice value.
Chargebacks and Compliance Deductions: Common issues that cause you to fail to meet Amazon’s strict delivery, labelling, and packaging requirements can result in Amazon chargebacks that can eat into your revenue if they’re not effectively disputed.
Payment Terms: Instead of regular payouts like with Seller, Vendors are paid at 60-90 day terms, meaning your cash will be tied up longer in the supply cycle. Though early pay options do exist, these often reduce margins.
Unlike with the Seller model, Vendors won’t have to account for monthly subscriptions or fees issued on a per-sale basis. However, this nominal benefit is often outweighed by the wholesale discount and various Vendor deductions, meaning there’s no single choice that’s automatically cheaper.
Got questions about launching on Amazon? Our Vendor+ full channel management service lets you tap into a wealth of knowledge from a team of Amazon experts, and benefit from impartial advice to find the best way forward for your brand.
Profit Margins on Amazon Seller vs Vendor Central
At first glance, comparing Amazon Seller vs Vendor Central profit margins may seem straightforward. Seller central generally promises higher headline margins, while Vendor operates on wholesale pricing.
However, focusing solely on gross margin percentages can be misleading, and lead brands into costly strategic mistakes.
The true profitability of selling on Amazon isn’t just about the margin on paper, but about net contribution after operational cost, risk, and cash flow pressure and scalability.
Seller Central Profitability
Seller Central often comes off as the more attractive option, as it allows brands to retain the full retail price, minus Amazon referral, fulfilment and advertising fees. On a unit-by-unit basis, this model can result in higher gross, and even EBITDA margins, particularly if pricing, advertising efficiency, and inventory management are all well-optimised.
The platform’s faster payment cycles (typically issued once every 14 days) can also help to improve cashflow visibility, giving sellers financial wiggle room to reinvest in stock, advertising, and product development.
However, it’s important to note that this margin advantage can often be overestimated. Seller Central profit is highly sensitive to a number of variables, including CPC inflation, storage fees, stock risk, returns, overhead, and Buy Box competition.
As product categories become more saturated, the cost of competitive advertising can also increase faster than prices, which can gradually erode the margins that often make Seller Central attractive in the first place.
In practice, many brands end up finding that Seller Central’s theoretical margin advantage can be offset by increasing complexity, volatility, and cost to internal revenue.
Vendor Central Profitability
Vendor Central margins are generally lower on a per-unit basis, due to the fact that products are always sold to Amazon at wholesale rates.
However, this kind of comparison overlooks a few structural advantages that can make Vendor Central the more profitable model overall, particularly at scale.
With Vendor Central, you transfer fulfilment, customer service, returns, and last-mile delivery over to Amazon, dramatically reducing your operational burden and internal cost. Under this model, inventory moves in bulk, forecasting becomes clearer, and logistics management is greatly simplified. For many brands, this reduction in overhead more than compensates for the reduced margin.
One of the most crucial differences between profitability on the two platforms is that Vendor Central promises greater sales stability. When you’re dealing in large, predictable purchase orders, you’ll reduce your reliance on daily advertising performance and the need to fight Buy Box volatility. When you’re an established brand with high demand, this kind of consistency can unlock a higher total contribution, and minimise the operational risk.
Amazon Seller vs Vendor Central: Pros and Cons
Breaking down some of the broader strengths and weaknesses of each platform can make it easier to understand different features, and better contextualise which choice is right for your business.
Here’s a quickfire list of the general pros and cons of Seller Central and Vendor Central to make your decision clearer.
Amazon Vendor Central Pros
Hands-Off Fulfilment and Customer Support: With Vendor, Amazon will take care of all the packing, shipping, and customer service, reducing the operational burden on you and your team.
Credibility Boost: Carrying the “Ships from and sold by Amazon” identifier can help to increase conversion rates, especially if your product category is particularly competitive.
Bulk POs: Under a Vendor model, Amazon will place large POs, which can be a big help when it comes to manufacturing planning and predictable sell-through.
Access to Marketing Programs: Vendors are favoured for real estate on promotional events like Black Friday, historically are given earlier access to new marketing features, and may find it easier to join programs like Amazon Vine.
Amazon Vendor Central Cons
No Pricing Control: In Vendor Central, Amazon sets retail prices and can discount products without consulting you first, which has the potential to erode brand value or cause channel conflict.
Lower Margins: Due to the wholesale pricing structure and fees, Vendors generally have to work with a lower per-unit profit margin.
Slow Payments: Vendor’s net 60–90 terms can delay cash inflow, potentially straining working capital for smaller brands.
Invite-Only: Unlike seller, Vendor is an invite-only program, often making it inaccessible for new or smaller brands.
Amazon Seller Central Pros
Full Pricing Control: On Seller Central, you get to control the retail price, discounts, and promotions, enabling more strategic margin optimisation.
Flexible Fulfilment: Seller also promises greater control over logistics, giving you the option to choose between FBA, FBM, or hybrid models depending on what suits your business’s needs best.
Fast Payment Cycle: Your account balance is paid out once every 14 days, supporting cash flow and reinvestment opportunities.
Amazon Seller Central Cons
Higher Operational Responsibility: If you don’t opt for FBA, you’ll need to manage inventory, fulfilment, and logistics yourself, something that can put a strain on your resources.
Fees Adding Up: Seller Central’s referral and fulfilment fees can quickly add up to a significant hole in your cash flow, especially if you’re operating in a low-margin category.
No “Sold by Amazon” Prestige: The lack of the “sold by Amazon” badge can reduce trust for some in your target audience.
Amazon Seller vs Vendor FAQs
Though both platforms exist to let brands sell their products on Amazon, the difference between Vendor and Seller Central is crucial to understand so you can match your brand to the right model, and maximise your chances of long-term Amazon success.
We hope this guide has given you a good reference point for choosing the right channel and giving your brand the best start possible. For more support with your Amazon journey, be sure to check out our other blog posts, or find out how our bespoke channel management services can help you.
Is Amazon Seller Central or Vendor Central better for new brands?
For most new or smaller brands, Seller Central is usually the better starting point. It’s open to anyone who meets Amazon’s basic requirements, offers faster payment cycles, and allows full control over pricing and inventory. Vendor Central, on the other hand, is invite-only and typically reserved for brands with proven demand, strong supply chains, and the capacity to fulfil large wholesale orders.
Can you operate on both Seller Central and Vendor Central?
Yes, it’s possible to operate on both platforms, but it’s not usually recommended. Running a hybrid model can create pricing conflicts, Buy Box competition, and operational complexity if not managed carefully. Some brands use Seller Central to fill gaps where Amazon isn’t purchasing on Vendor, but this requires clear pricing and inventory strategies to avoid issues.
Why does Amazon invite brands to Vendor Central?
Amazon invites brands to Vendor Central when it sees consistent demand, strong sales velocity, and confidence in a brand’s ability to supply at scale. Factors such as category growth, brand recognition, and supply chain reliability all play a role. An invitation doesn’t always mean Vendor is the best commercial option, so it’s important to assess the impact on margins and cash flow before accepting.
Do Vendor Central products always win the Buy Box?
Vendor Central listings often have an advantage because Amazon controls pricing and fulfilment. However, that doesn’t mean they automatically win the Buy Box in every scenario. Third-party Sellers with competitive pricing, Prime eligibility, and strong performance metrics can still win against Amazon’s own offer in many cases.
Which model offers better long-term profitability?
There’s no universal answer. Seller Central can offer higher margins on paper, but comes with greater operational complexity, advertising dependency, and volatility. Vendor Central typically delivers lower per-unit margins, but greater stability, reduced overhead, and predictable purchase orders. Long-term profitability depends on your brand’s scale, resources, cash flow tolerance, and growth objectives.
How do payment terms differ between Seller and Vendor?
Seller Central pays out every 14 days by default, which supports healthier cash flow and quicker reinvestment. Vendor Central operates on agreed payment terms, usually 60–90 days, meaning cash is tied up for longer. While early payment options may be available to Vendors, they often come at the cost of reduced margins.
Is Amazon advertising required on both platforms?
Advertising isn’t technically mandatory on either platform, but unless your brand is already extremely well-known, it’s essential to stay competitive. Both Sellers and Vendors use the Amazon Advertising console, and paid media is a large part of helping you maintain visibility in competitive categories. Vendors may also be expected to fund additional marketing placements and promotions as part of their commercial terms.
What happens if Vendor Central is no longer profitable?
If Vendor Central becomes commercially unviable, brands can renegotiate terms, reduce catalogue exposure, or in some cases transition back to Seller Central. However, exiting Vendor relationships can be complex and should be handled carefully to avoid listing suppression, stock issues, or loss of retail presence.
