Amazon ranks the top among the powerful eCommerce platforms with the most extensive client and worldwide reach and managing your delivery. For how to sell to Amazon directly, Amazon Vendor Central and Amazon Seller Central are the two methods.
The first party (1P) on Amazon hints at the users of Amazon's vendor program. Like how they might sell products to a physical store, these businesses serve as Amazon's wholesale suppliers. From a vendor's list of products, Amazon selects the items to be offered and notifies the vendor of the orders to be purchased. The products placed for sale display 'shipped by' and 'sold by' Amazon, establishing the platform as the official seller. Amazon chooses the estimated product cost; not everyone can become a vendor on Amazon. The program is only open to those invited.
What is an Amazon Vendor? Amazon Vendor Central is a platform with a web interface used by wholesalers and manufacturers to sell their products directly to Amazon. Vendors who sell through Vendor Central are considered first-party sellers. When vendors sell products to Amazon, Amazon resells those items to customers, effectively making the vendor a supplier.
Access to Vendor Central is by invitation only. As a vendor, you provide Amazon access to purchase and resell your products, with Amazon taking ownership of the inventory once orders are fulfilled. In contrast, Amazon Seller Central allows you to fully own and manage all aspects of selling on Amazon.
Difference Between Amazon Vendor and Seller The key difference lies in who is responsible for selling the products. Choosing Vendor Central means Amazon buys your products from you and resells them to customers. With Seller Central, you sell directly to customers using the Amazon marketplace.
User Role Your role in the sales process is what distinguishes Vendor Central from Seller Central. As mentioned, with Seller Central you act as the seller, supplying products and making decisions about your offerings. With Vendor Central, you take on the role of a wholesaler, with Amazon being your customer.
Access Registering for Seller Central is straightforward, while getting access to Vendor Central is by invitation only from Amazon. Invites follow a predetermined pattern from Amazon's A9 system. Ultimately, the decision to accept or decline your business lies entirely with Amazon.
Pricing Control With Seller Central, you have full control over your product pricing, aside from normal market forces and competition. However, if you use Vendor Central and sell to Amazon, you relinquish that control and Amazon determines pricing.
Costs Selling costs on Amazon vary depending on factors like your business model and types of products. Vendor Central involves fees like packaging, rebates, partnership fees, and marketing/advertising fees. Sometimes these fees can exceed total sales revenue.
Seller Central fees include referral fees, closing fees, professional selling plan fees, and cost of goods sold (if applicable).
Payment Terms Vendor Central provides several payment timeline options. The standard term is net 90 days - collecting the amount paid by customers within three months of the sale. Faster payment options subtract a 1% or 2% fee respectively for 60 day or 30 day payment terms.
Benefits of Selling Through Vendor Central Only sellers invited by Amazon can access Vendor Central. Once signed up, their products will be designated as "Sold by Amazon", likely increasing customer trust. Additional benefits include:
Increased Customer Trust When Amazon acts as the seller for vendor products, customers see them as "Sold by Amazon" rather than a third party. This badge of approval builds trust in a way that third party sellers don't always experience.
More Advertising Options Vendors can create targeted ad campaigns through Amazon Marketing Services (AMS) to drive demand. While sellers can also use AMS, vendors have access to more extensive campaign options. Managing campaigns effectively and optimizing keywords is key.
Standardized Approach As a vendor, priorities include fulfilling purchase orders, invoicing, and avoiding chargebacks (penalties for non-compliance). With Seller Central, responsibilities like sales tax, inventory reconciliation, and returns fall on your shoulders even when using FBA.
Added Marketing Tools Amazon provides additional marketing resources to vendors, like Amazon A+ Content for enriched listing content. Vendors can also participate in promotional programs like Subscribe & Save and the Amazon Vine reviewer program. Optimizing content can drive significant sales growth.
How to Sell Directly to Amazon If you get approved to sell directly to Amazon, congratulations! The process is long but your products become immediately available. After approval, you can start listing products right away.
If new to selling on Amazon, first create a Seller Central account to list and manage your products. After logging in, access the Vendor Central dashboard where you can add inventory, build your storefront, monitor orders, and track sales and profitability metrics.
What Amazon Controls as a Direct Supplier Even top brands often remain 3rd party sellers when supplying their own products. Getting that coveted invite to become a 1st party seller is exclusive. If approved, you give up a lot of control.
Amazon dictates pricing, factoring in competitor pricing online and offline, and sets it as low as viable. They also handle communications, returns, and order fulfillment logistics. As the vendor though, you still pay Amazon's referral and variable fulfillment fees based on item size and weight.
How to Get Approved as a 1st Party Seller Invites don't come easy. Since your products represent Amazon's brand, approval is selective. Common criteria include:
Optimize Listings and Increase Visibility An established online presence or successful website is key for getting that invite. This means optimizing onsite SEO to drive more traffic, authority, content marketing, and overall visibility - over 90% of website visits are from organic searches.
You should also optimize product listings for Amazon search. Much like SEO, this helps gain exposure, rank well in Amazon's search results, and increase click through rates - all of which drive sales and demonstrate shopper demand. Keep product titles under 60 characters and details accurate.
With over half of online shoppers starting product searches on Amazon, optimizing your listings and search keywords could expedite exposing your products to Amazon's buyer base.
A PIM system stores all your product details in one place for both website and Amazon content. You can also store marketing info like keywords, SEO components, etc. to help optimize Amazon listings in a way that builds your brand and aligns with their guidelines.
Maintain Competitive Pricing Over 50% of polled Amazon customers cited fair pricing as the number one reason they make purchases. Use this insight to stand out from the sea of competitors. Offering attractive prices that align with perceived buyer value gives you an edge. Pricing can be adjusted through discounts, shipping costs, repricing tools, etc.
Build a Branded Store With a branded storefront you can customize an Amazon listing to highlight your brand story and products. This can increase engagement, brand awareness, and clicks from Amazon search results.
Aim for the Buy Box Most Amazon sellers understand the importance of winning the Buy Box, which signals Amazon backing your offer and drives additional sales. To qualify, focus on competitive pricing, high reviews, fast and reliable shipping, and low cancellation/return rates.
Consider Amazon Prime Research shows Amazon Prime members spend almost twice as much as non-members. Over 100 million Prime subscribers take advantage of perks and make more purchases. Use this to showcase products to the most likely buyers. Increased sales visibility could catch Amazon's attention and motivate extending a vendor invite.
Conclusion Selling directly on Amazon takes preparation but sets you up for success. With the right knowledge and support, the platform becomes far less intimidating. We wanted to provide this resource to help you take control of your eCommerce business on Amazon with greater clarity and confidence.
Understanding how to sell directly to Amazon is critical for any modern eCommerce brand. Quickly get up to speed using the tips outlined here. If you still feel overwhelmed, Simpl offers eCommerce order fulfillment solutions tailored for businesses of any size. Reach out and let's talk about how we can help optimize your Amazon strategy!
Recommended: eBay Vs. Amazon - A Complete Comparison Guide
