Amazon Vendor Central is home to market-leading brands in almost every category. It’s where you’ll find all the household names; instead of battling it out with hundreds (or thousands) of startups and independent retailers on Amazon Seller Central, they tend to do business on the more exclusive, more strategic platform.
They’ve got good reason to be there. Amazon only invites brands it sees as valuable to its own competitive position to join Vendor Central. Once there, it gives them far more support, guidance and attention than most Sellers ever see.
If you’re a smaller business, your response to this might be that it’s alright for some. But don’t despair – Amazon Vendor Central is actually more accessible and more valuable to you than you probably realise. In fact, managed strategically, it could become one of your biggest generators of revenue.
But how do you figure out if it’s the right fit? And if it is, where do you get started
The benefits of Amazon Vendor Central
Businesses of any size should be careful of dismissing Amazon Vendor Central. Many do – they see it as closed and complex, and generally a worse version of Seller Central. But while it is complex, it’s definitely not worse. It’s just different.
On Amazon Vendor Central, you essentially sell to Amazon on a wholesale basis. They then sell onwards to consumers, rather than you selling to consumers direct, as you would on Seller Central.
This in of itself brings a number of benefits. You don’t have to worry about fulfilling orders, arranging postage and returns, or handling customer support. There’s also less pressure on you to manage inventory and potential stock-outs: Amazon raises a PO for your product and decides how much of it to warehouse. In today’s era of supply chain uncertainty, that’s a big bonus.
Another important upside is the level of brand control Amazon Vendor Central affords you. As anyone using Seller Central will know, that can be a real struggle – and the potential impacts to your business are significant. For retailers with large catalogues, it can be a battle to take ownership of product listings on Seller Central, and to get Amazon to push through changes to them. Basic optimisation requests are often ignored, and support tickets fall into black holes.
On Vendor Central, that’s not the case. There is far more support available: brands are given a dedicated Vendor Manager for the first year to help not only with troubleshooting, but also strategically leveraging deal events and advertising. Broadly speaking, the more you scale and bring value to their platform, the more support and attention they give you in return.
The challenges of Amazon Vendor Central
But that’s not to say it’s all smooth sailing and frankly, Amazon Vendor Central isn’t for everyone.
There’s no denying it’s a complex platform. While the support is better, it’s paired with a clunky interface, frictional processes and opaque terminology. Making it work requires time, effort and expertise – you can’t list and forget like you can (though shouldn’t!) on Seller Central.
The wholesale model had its downsides, too. Vendors get less control over pricing. Though Amazon will take recommended retail price into account, they’ll sometimes reduce it to undercut third party Sellers. This can interfere with margins which, for smaller businesses, might already be tight.
Likewise, the commission Amazon takes from sales is sometimes higher on Vendor Central. Rates set at sign-up are typically similar to the set rates on Seller Central, at ~15%, but they’re subject to increases and renegotiation annually.
Amazon Vendor Central works best for scaling businesses
Clearly, there are pros and cons. Figuring out if Amazon Vendor Central is a good fit for your business depends on your particular strengths, weaknesses and priorities – but there is, at the high level, a business profile that it’s generally better-suited to:
- B2B: Vendor Central is well-suited to businesses familiar with and set up to sell to other businesses, rather than direct to consumers. It’s even better for those who sell wholesale.
- Brand-focused: If brand protection and promotion is important to your business growth plans, Vendor Central is for you. It offers far more control over and optimisation of listings, and prevents you from having to compete with third-party Sellers of your own product.
- Scalable: Vendor Central becomes more valuable to you as you become more valuable to Amazon. If your sights are set on becoming a category leader, this is the place to do it. If you’re not quite at that stage yet, you might not see a return on investment right away.
- Strategic: Success on Vendor Central depends on having the time, resource and expertise to make it work well. Ideally, managing Amazon will be someone in your business’s full-time job, and they’ll have the support of other teams to execute on what needs to be done. Don’t prioritise it, and it won’t pay dividends.
The Strategic Guide to Driving Growth on Amazon Vendor Central in 2024 goes into more depth on the differences between Amazon Vendor Central and Seller Central, and the key things to consider when getting started with the platform. Download it [here], or get in touch to discuss your specific needs.