earning how to become a vendor on Amazon isn’t easy. The program can often feel a bit secretive, like an exclusive club that offers all of these promising opportunities and benefits, but with no simple way to get in. That is a big part of this program. It is exclusive. You do not call them – they call you!
So, what is Amazon Vendor Central, and should you be interested in what it offers?
Amazon Vendor Central is a unique program. It connects Amazon to vendors – the manufacturers and distributors of various products. This program is not readily available to every seller, but it is available to many companies.
If you take a look at product listings on Amazon, you’ll notice many of them are sold directly from Amazon. In most cases Amazon doesn’t make those products, they just sell them. Amazon Vendor Central, is the way Amazon bridges the gap between manufacturers and distributors to help them get their products to the end consumer.
If you are a member of Amazon Vendor Central, you can sell your product to Amazon directly. That allows you to potentially sell more or minimize some of the costs of selling your product to Amazon customers.
However, there is much to know about how it works. And, there are a few limitations you need to learn, too.
What’s the Difference Between Being an Amazon Seller and Amazon Vendor?
If you are a business owner, you can work with Amazon in two different ways. You can work as a vendor or a seller. A seller is a retailer that sells directly to the consumer – the person buying the product to use. A vendor, on the other hand, has a relationship with Amazon and sells to Amazon directly. This is more of a wholesale relationship. Amazon, then, sells to the end buyer of the product.
In this relationship, Amazon purchases items from the vendor at a discounted or wholesale price in bulk. The products are received and organized in warehouses to meet demand, and then Amazon fulfills orders.
Amazon Seller and Vendor Systems
In some situations, there are opportunities for vendors to ship the product directly from the business’ warehouse to the end buyer. This can be done if Amazon is the chosen fulfillment company for the business.
With Amazon Vendor Central, Amazon is your customer. Once the products ship to Amazon, they own those products and have the right to sell them to their customers. This means Amazon manages nearly the whole process for the product’s sale.
To be clear, being an Amazon seller still offers plenty of benefits. You can use the site to build a very profitable business model. Amazon Vendor Central is simply a different way of working with the company.
A More Detailed Look at the Differences
When you operate as a seller, you gain a number of benefits:
- You are selling your product to Amazon’s customers. It will be listed on the Amazon site and will be in front of tens of millions of customers.
- You can select Fulfillment by Amazon, which means your listings gain access to what consumers want – Amazon Prime and Free Shipping.Amazon handles the shipping process for your sales.
- Amazon advertising is something you can do to market your products on the platform.
- You can sell in Europe, Canada, Mexico, Japan, and more using your Amazon Seller account.
One key aspect of being an Amazon seller is that you have a lot of control. You create the actual listings for your products. You can manage the pricing and the entire process overall. You control sales, discounts, and advertising. The bottom line is that you can control your Amazon listing if you are a seller.
That changes with Amazon Vendor Central. If you are an Amazon Vendor Central member, you will log into your Amazon vendor account at VendorCentral.amazon.com.
When you register as a vendor:
- Amazon buys your products from you.
- Amazon loads up its warehouses with your products and manages the inventory.
- Amazon becomes the distributor of your products.
- Amazon also controls the pricing.
- Amazon handles the shipping of the products as well as any customer service and return needs.
Amazon Vendor Model
As you can see, Amazon handles the entire process. The company itself sets up the listings and you lose control of the listings. For many business owners and manufacturers, that is a concern.
What Is Amazon Vendor Express?
If you are researching and doing your homework on the best method for working with Amazon for your business, you may hear about Amazon Vendor Express. It is easy to confuse Amazon Vendor Central with Amazon Vendor Express. The two are very different, though.
First, Amazon Vendor Express is no longer available or accessible. If you were using Vendor Express, you probably are selling your products on Amazon yourself, or you may have moved off the site.
Still, it can be helpful to learn a bit about what it was. It is somewhat like Vendor Central but a more streamlined version of it. With Vendor Express, you did not pay for your products to be handled or stored. You could choose to use drop shipping, also known as direct fulfillment if you thought it would be a better option for your business.
Vendor Express also required companies to offer free tester products to sell on the site. When that happened, you would then gain the ability to sell bulk orders to Amazon. In short, it allowed Amazon to find out if buying your products was worth doing so.
Vendor Express did not have a wait for signing up, and because of its high turnover, you could get hot selling items out faster. Payments took longer, though, often at the 90 day point. It also had other limitations, such as being capped at 85 items (Vendor Central does not have a limit).
Vendor Express attracted a lot of manufacturers and distributors who did not want to wait for an invitation to sign up with Vendor Central. It was a faster way of getting products on the site without being a direct seller.
What is Amazon Vendor Central by comparison? As you learn how to become an Amazon Prime Vendor, you now, of course, have no other option to choose from with Vendor Express defunct. There were differences, though.
- Amazon Vendor Central means you are selling to the retailer directly.
- It’s possible to sell in bulk right away without any waiting period to earn profits.
- It tends to be best suited for distributors and manufacturers, including first-party sellers, who want to just work as a supplier for Amazon.
How Do I Become a Vendor on Amazon? Here’s Where It Gets Difficult
It sounds like you want to learn how to get an Amazon Vendor account. Which is a good opportunity! You don’t have to deal with customers or worry about shipping. Amazon does it all for you!
The problem is, you cannot learn how to set up a vendor account like that. You have to get an invitation to do so, there is no such thing as a log in or sign up in any way. There is no way to learn how to register at Amazon as a vendor without first receiving a message from Amazon directly asking you to do so.
That may have taken some of the wind out of your sail. After all, it’s not easy to get a company like Amazon to pay attention to your smaller or new product. Amazon selects and invites many different businesses to the program. This may include:
- Brands that have a strong demand from shoppers on the site
- Amazon Sellers who are doing well on the site with their own products.
- Others who have attractive products Amazon thinks will be beneficial to the site, such as from trade shows or research.
Amazon often sends an email saying they are interested in selling the products on the site. It’s as easy as responding to an email and telling them you are interested. They will then explain the process and offer a term of service agreement to you.
To be clear, you don’t usually have a lot of room for negotiations here. Amazon often makes an offer to you. You can accept it or just say no. Larger brands and more recognizable products – especially those that customers want – are more likely to have access to the program.
Amazon Vendor Central may not be accessible to you right off the bat, but once you get an invitation, you’ll want to make the most out of the opportunity. How do you do that?
How to Use Amazon Vendor Central to Build Your Business?
You can learn how to use Amazon Vendor Central by simply working through the setup process. We will go through much of that right here.
Let’s assume that you want to learn how to be an Amazon Vendor – when you have the invitation in hand. The process is rather easy. You will get access to create an account on the Amazon website.
This video from Jungle Scout is a great tool to help you get started. It informs you more on Amazon Seller Central but walks you through the account setup process.
Navigating the Amazon Vendor Platform
There are a lot of features on this platform for you to use. It’s worth getting to know them so you can make the right decisions for your products. Here are some of the most important.
- Orders: Where you will receive purchase orders from Amazon. You will also provide the shipping information here.
- Merchandising: Where your Marketing tools are located for your products. You can access some of the tools Amazon offers here – like A+ Content and Amazon Vine.
- Items: The place to update and include all of the valuable information about your product. It includes images.
- Payment: Invoices are paid out here. It is also where you will find all remittances as well.
- Reporting: It’s a good idea to keep an eye on this area. Your reporting will give you insight into how well your business is doing in the marketplace. The Amazon Retail Analytics feature also provides even more detail.
- Advertising Feature: The place for you to create and manage pay-per-click campaigns and increase visibility to your product.
Amazon Vendor Central Dashboard
Now that you’ve navigated the dashboard, you may want to know how Amazon places an order. Once your account is up and running, you will receive a purchase order. Most businesses will see these about once a week, often on Mondays. You may see them more often if the company wants more of your product in stock, for example, if there’s a big spike in demand.
According to the Amazon business model, they don’t want to house too much inventory in the warehouses. Rather, it prefers more frequent but smaller deliveries. The company doesn’t want to spend money warehousing large quantities of products.
So far, what you’ve learned about Amazon Vendor Central may have you itching to see that first purchase roll in. It’s not always going to happen immediately. You’ll quickly learn about this automated process, someone needs to pull the trigger to get the product rolling in to Amazon. Amazon’s system is complex, but it is also very efficient. It looks at sales history, determines the current demand levels for the product, and then makes an automated decision to invest.
The initial order is likely to be small. Amazon is just conducting a trial run. As your product sells, and sometimes sells out, you are likely to see larger orders. Don’t be alarmed if that first order is small. That doesn’t mean you’ll have limited sales long-term.
Ready to Fill Orders?
It’s fantastic when you see that first purchase order come in. You’ll feel like you just won the big contract you’ve been waiting for (and you may have!) But, there’s a fine line that most people worry about when it comes to selling on Amazon. “What if I don’t have enough stock to fill that order?”
Most businesses don’t have a lot of cash on hand to have large warehouses or stock rooms of products. Yet, you need to be as prepared as possible to meet the demands of Amazon. If you cannot fulfill the order, you might have to cancel. Amazon sometimes gives you the option to place the order on backorder. Any time you run out of stock, the product will display as unavailable on the site. If you forget to make the product unavailable, and too much ends up on backorder, Amazon can create a chargeback, which is a fee you have to pay.
How Does Amazon Pay Vendors, Then?
This is a common question, and luckily, it’s pretty straightforward. Like most other aspects of the site, it’s automated.
First, vendors can set their own wholesale price within the platform. You will do this when you create the item listing in the system. Amazon then decides if that price is acceptable. If not, at times they will send you an email asking you for a lower price point. You can also see the price they are willing to pay. You can accept this or negotiate with them to some degree.
There is no doubt Amazon will be aggressive in their pricing. It’s one of the factors that helps them succeed. Yet, if you don’t want to be dictated by the corporation, you can choose not to use Vendor Central. Instead, you can list your products as a seller and avoid it.
Once a price is in place, and an order is paid, you will receive payment. Generally, this is done between 60 and 90 days out.
Associated Costs With Amazon Vendor Central
The cost to use Amazon Vendor Central, first and foremost, comes from the reduction of your prices to meet the wholesale pricing the company requires. In addition to this, Amazon will also charge a 4 to 10 percent cash payout for co-op costs.
This is not the same pricing found with an Amazon Seller account. There, you pay a flat referral fee, which is generally 8 to 20 percent of the price paid for each item you sell plus the cost of Fulfillment by Amazon.
You should expect wholesale margins when it comes to making a profit on Amazon Vendor Central. The infographics below provides tips to harden your position in negotiating vendor terms with Amazon.
Tips for Vendors to Negotiate Terms With Amazon
What Are the Benefits to Your Business?
When you consider Amazon Vendor Central benefits, there are a few things to notice. The biggest benefit to many companies who are manufacturing products is that you no longer have to handle customer service. With wholesale, all of the responsibility to market and attract buyers, to some degree, falls on Amazon. They handle the questions, concerns, and shipping for you.
If you want to earn a higher profit per sale, Amazon Seller accounts tend to do better with this if you can leverage the marketing and listing optimization that is critical to doing well here. When you learn how to become a vendor in Amazon’s marketplace, you most certainly lose a bit of control over your product’s listing details and pricing. For some companies, this can be a concerning factor with this method.
Are You Ready to Become a Vendor for Amazon?
What is Amazon Vendor? Is it right for you? How do I become a vendor for Amazon right now?
It is a complex process initially. We mentioned a few steps to take to get noticed, such as making sales with your managed seller listings (optimization can make a big difference here.) There are no tricks to get Amazon to send you that invitation, but building a strong brand, on and off the site, can help you grab their attention.
What should you do now?
- Create optimized listings on Amazon as a seller to get the attention of the company.
- When you get an invitation, be ready to act on it by determining the best price you can afford to offer Amazon.
- Work with a team to help you optimize your Seller account and put together a complete Amazon strategy.
Nuanced Media can help you to improve your listings to gain more sales and more attention from Amazon itself. Reach out to us for more help.
What Is Amazon Vendor?
How Do I Become a Vendor on Amazon?
Why Would I Want to Become an Amazon Vendor?
What Is Amazon Vendor Express?
Where and How Do I Log in to Amazon Vendor Central?
Once you’ve received your invitation, you’ll create a login. Similar to Amazon Seller Central, you can log in to Amazon Vendor Central here.