A question we often get is…
“What is the difference between Amazon Vendor Central and Amazon Seller Central?”
This is a loaded question but we’re going to try and help you out.
When you sell on Amazon (right now) there are two main ways to reach the Amazon customer. The first is 1P (or first party) and the second is 3P (third party). When it comes to the purchase in itself, the customer may never even pay attention. However, when it comes to operations – there are loads of differences.
👉 Amazon Vendor Central Basics:
- You need an invitation
- You’ll need intermediate understanding of EDI systems
- You’ll need intermediate understanding of routing ASNs
- You will need basic understanding of traditional payment terms (Net 30, Net 60, Net 90).
- You will need to understand cost/profit analysis in a retail environment
- You will need to understand MSRP and that Amazon ultimately controls it
- You’ll have the possibility to control more brand content
- You’ll typically win the buy-box more times than not
- You’ll gain access to Amazon Vine, Subscribe & Save, A+ Content and other 1P exclusive programs
👉 Amazon Seller Central Basics:
- Anyone can start selling as a 3P merchant
- Payment terms are very different, more like marketplaces and quick
- You will need to understand your margins, your costs and profitability
- You ultimately control MSRP (even better if your Brand Registered)
- You potentially could be competing with other sellers for your shared buy-box
- You’ll gain access to normal deals, coupons, discounts, etc.
- You have the possibility to Brand Register your product (if trademarked)
- You have the possibility to get Enhanced Brand Content (EBC
- You have the possibility to enroll in Amazon Early Reviewer’s Program
Vendor Central operates like traditional brick-and-mortar in many ways. Purchase orders come from Amazon once a week and orders are tracked through traditional warehousing metrics. Orders are in bulk and are purchased based off an internal forecast assigned by the (robots) team at Amazon.
1P purchase orders are determined based off a ton of different things. For this post, we’ll just call it sales velocity or basic demand. Amazon attributes demand to glance views – which is the amount of traffic on your product detail pages. You’ve got to have demand and traffic to your detail pages to get sales.
See what I’m getting at?
It can be kind of tough to generate sales when there is no product in-stock for Amazon to sell. Luckily, Amazon has initiated programs like “Born to Run” that enables 1P vendors an opportunity to initiate a initial buy quantity (at a small investment of 10% of total LBQ cost and 10% Amazon Ad support).
Vendor Central is the backend 1P sellers use to manage their entire interaction with Amazon.
Orders, Items, Advertising, Merchandising, Reports, Payments, EDIs and other settings are all managed within the portal.
Another initiative that we fully support is Direct Fulfillment. If you’ve never heard of Direct Fulfillment and you sell 1P – drop what you are doing and tune in.
Direct Fulfillment allows you to drop-ship from your warehouse.
DF is the ability to drop-ship products from your warehouse without them being in Amazon’s distribution network. Basically, this means you can sell products similarly to 3P sellers. Your warehouse will be under a microscope and will need to meet specific requirements – but it’s massively imperative to have this connected to scale.
Direct Fulfillment also provides vendors the ability to continue selling products if Amazon doesn’t order enough for their warehouse fulfillment. Before you ask, yes – this happens all the time. Contrary to the news lately, Amazon messes up all the time. It’s almost impossible for them to actually forecast correctly on products they don’t know about (…re-enter ‘Born to Run’).
Summary: Vendor Central is great for brands who want to sell directly to Amazon. You’ll have less control over MSRP and inventory but you’ll have a better relationship with Amazon as a whole. If you sell well enough, you might even get assigned a Vendor Manager who can help you manage and grow even more.
Secondly, let’s talk about Seller Central.
Seller Central is the backend that most Amazon sellers are familiar with.
This portal is where you can add products, manage marketing information, route shipping and communicate to customers.
Seller Central is a powerful tool to master. The more familiar you get with understanding the ins and outs, the better you’ll be at managing your business as a whole.
The main tabs are Catalog, Inventory, Pricing, Orders, Advertising, Storefront, Reports, Performance, Appstore and B2B.
There is also a cool “Amazon Selling Coach” that we always recommend sellers pay attention to. There are sometimes some helpful tips to pay attention to.
Seller Central portal is also where you manage Fulfillment by Amazon (FBA) shipments. Meaning, this is where you create orders for Amazon warehouses to receive your products. FBA is a critical piece of running a healthy, scalable Amazon business. Getting familiar with shipping, margins and all the good things that come with profitability analysis is vitally important here.
One of the newest additions to Seller Central is the Marketplace Appstore. There are some fantastic tools in there to elevate your game!
There are all types of tools to help you scale. From listing help, automated pricing tools, inventory management, shipping solutions, advertising bidding, promotions, research and scouting, taxes, analytics, reporting and feedback and reviews. We can’t emphasis enough the power of tools. We have tons at our disposal.
Some brands run a hybrid model ⚖️
It’s not uncommon at all to find brand’s running a dual-approach to the Amazon flywheel. More businesses are deploying both 1P and 3P strategies simultaneously to take advantage of both platforms. This is called the Amazon Hybrid Model.
Sure, it can be a “grey” area and sometimes a difficult process to truly understand if it is or isn’t against Amazon’s ToS but let me just say this… don’t make Amazon mad or conflict with their terms and you’ll be okay.
There are levers to help you grow your business utilizing the hybrid approach. If you want to talk about these specifically, we can help you out.
The Hybrid Model has it’s challenges, too.
Managing your catalog across two separate systems (without making Amazon mad):
Managing your Amazon business with two different platforms that both operate different means that you and your team will need to be educated on both Vendor Central and Seller Central. They are totally different in so many ways (as covered above). When deploying a hybrid model – just make sure you mentally map out the strategy for each marketplace. It’s tough.
Forecasting and inventory is managed differently:
When it comes to selling via 1p – you’ll send orders in as Amazon initiates purchase orders (bulk). When it comes to managing inventory through 3P – you’ll need to send product into Amazon FBA to scale appropriately. Also, in 1P (whether they are good or not) Amazon will manage the forecasting. With 3P it’s all you, brother/sister. There are great tools to help you here (ask us about them).
Control varies, proceed with caution:
Content is viewed through different lenses, whether it’s on Seller Central or Vendor Central. If you are considering migrating an ASIN from Vendor Central to Seller Central, the content control of that specific ASIN will remain on the 1P Vendor side. Basically, don’t mess this up or you could lose control. Make sure you communicate via the Vendor Central catalog, or through emails because Amazon will always continue to try and order via 1P.
Marketing varies by account.
This isn’t as big of a deal as it used to be, because Amazon is giving 3P sellers similar opportunities to advertise as 1P vendors. I suspect 1P vendors will continue to gain access to more advanced tools as Amazon roles them out (like video). We’ll see how that goes.
Want to sell Internationally with Amazon? We recommend Seller Central 🌎
If you sell 1P – there’s a chance Amazon has already field-tested selling your products on other international marketplaces.
If you want to sell to customers in Mexico or Canada, Amazon makes it easy to create a unified North American account. This can be a massive accelerate for brands.
How does customer service vary? Tremendously.
One of the largest advantages of selling 1P to Amazon is scale of personnel. Meaning, as you grow – it doesn’t necessarily mean your personnel has to grow with you. When it comes to customer service (which is typically the first need most seller’s encounter), Amazon handles all of that for you with Vendor Central.
If you sell 3P, you have more customer touch-points. You have to “do” more which entails more time and can typically create more problems. However, if you’re a buttoned-up brand who’ve seen it all – this isn’t going to be a problem.
We can help you get it right! 💪
Look, we know navigating Amazon can be a tedious task – you’ve got to run your business. That’s where we come in and help you out.
We can analyze your current programs and set you up for success with our Amazon Growth Program.
We can also help you manage your day-to-day Amazon operations and help you maximize your Amazon Advertising. Lean our our company and ensure we’ve got you covered. When you win, we win. We’re here to help.