For most people, the start of a new year is a great time for goal-setting; for ambition and excitement about all the achievements still to come.
Unless you’re a retailer. If, instead, you’re feeling overwhelmed by challenges, exhausted at the prospect of having to pivot (again), and confused about where you should be spending your time and money in order to drive growth, I don’t blame you. And you’re not alone.
Retailers have been fighting strong headwinds in order to stay competitive and attract customer attention for years. The landscape, it seems, won’t stop changing. First, ecommerce came along and disrupted everything. As a result, customer needs and shopping habits started to change – first a little, then a lot. And then there was the pandemic, and everything shifted again.
Of course, it’s not all bad news. While the pace of change is a challenge, it’s also a huge opportunity – especially online. Ecommerce is booming: total global sales reached nearly $4.29 trillion in 2020 as more shoppers moved to digital channels.
A lot of that new traffic went to Amazon. With 5.2 billion visits per month, it’s now the world’s biggest marketplace by a significant margin. Attracted by its unparalleled access to consumers, retailers are registering on the platform in their droves; the seller marketplace grew by 60% in Q1 of 2021 alone.
But therein lies the problem. As Seller Central grows, scaling sales through the channel gets harder. Nearly two thirds of sellers are concerned about Increased competition pushing prices down, and a third say they plan to diversify their ecommerce strategy in order to keep up.
If you’re one of them, you should focus your attention on Amazon Vendor Central instead.
Is Amazon Vendor Central just a worse version of Amazon Seller Central?
Amazon Vendor Central is a little-understood, often overlooked and much-maligned platform. But for retailers looking to scale their ecommerce growth in 2022, it’s the smartest strategic choice.
That might come as a surprise to some of you. There are a lot of misperceptions in the market about what and who Amazon Vendor Central is actually for. It’s opaque and hard to use, leading many – including those already on the platform – to the conclusion that it’s simply an inferior version of Amazon Seller Central.
That isn’t true.
It’s worth taking a step back here to understand where Amazon Vendor Central came from, and why. The first party (1P) model is actually where Amazon got started. It worked in the same way as most traditional wholesalers do: Amazon built relationships with suppliers, bought stock from them, warehoused it and re-sold it on their website.
But that was always going to be limited in terms of the amount of product Amazon could afford to stock. In order to scale the platform, Amazon launched Seller Central – the third party (3P) platform we know and love today, and which enables retailers to sell direct to the consumer. Seller Amazon Central now far outstrips Vendor Central in terms of volume. But just because it’s bigger, that doesn’t mean it’s better.
In fact, there are a lot of issues with Seller Central. Its recent explosion in growth is because anyone can register as a Seller – and many did, as they pivoted to ecommerce during the pandemic. But that hasn’t just increased competition. It’s at risk of turning the platform into the Wild West.
Amazon Seller Central proliferates with small brands jostling for space, making optimisation, ranking and competing for the Buy Box a near-constant struggle. And that’s assuming you have ownership over your brand. If your products have already been listed by a 3P reseller, it can be an uphill battle trying to prove your authority over and make changes to listings. Customer support is patchy at best: automated responses cause frustration and routinely fail to resolve issues, with some tickets disappearing into black holes. Sellers know that it’s becoming a time and resource suck, with more and more work needed to outstip competitors, troubleshoot issues and ultimately see value.
You’re probably aware of some of these issues. What you might not know is that there is another way.
Why Amazon Vendor Central makes sense for scaling brands
A disclaimer here: Amazon Vendor Central has plenty of problems of its own. It’s not for everyone – literally. Access to the platform is by invitation only, and so there are some very small brands for which it won’t be an option.
Once you do get into Vendor Central, it’s not exactly easy to use. It’s received less attention than Seller Central over the years and as a result, the interface is clunky and the terminology can be confusing.
But get past all that (my how-to Guide can help), and Vendor Central could become your most valuable sales channel. Despite being significantly smaller than Seller Central, Vendor Central is responsible for about half of all products sold on Amazon amounting to hundreds of billions of dollars in revenue annually.
Vendor Central punches so far above its weight because it’s the more strategic channel. It’s the home of the huge multinational brands that help Amazon retain its competitive position in the market. As a result, Amazon treats its valuable Vendors very differently to its ten-a-penny sellers – and as a scaling brand, you can leverage that to your advantage.
Perhaps the biggest upside to Vendor Central is the amount of support available. Even when submitting tickets through the standard channels, support requests from Vendor Central are prioritised over those coming from Seller Central. On top of that, there are several layers of free and paid brand and account management packages on offer. These help you troubleshoot and optimise listings, so you can retain critical brand governance as you scale. And they go further, with specialists on hand to guide you through the offers, advertising and marketing tricks that will turn your brand into a category leader.
That enables you to not just scale, but to scale strategically. And because Vendor Central is Amazon’s strategic arm, they’re invested in helping you do so. The more valuable your brand becomes to Amazon, the more attention and infrastructure Amazon offers you in return.
Undoubtedly, Vendor Central is an investment: it’s a complex platform, and takes time and specialist understanding to manage it successfully. But those that use the 1P platform strategically find it pays dividends.
For retailers facing an uncertain future, it’s a safe bet. To find out more about Amazon Vendor Central, figure out if it’s right for you and start building the foundations to scale, read The Strategic Guide to Driving Growth on Amazon Vendor Central in 2022 or get in touch.
