Amazon sellers may have heard about Amazon Vendor Central, but what is it? What does it mean for businesses? And how can you join?
The experts at Aritha Amazon Agency have put together seven things you need to know about Amazon Vendor Central to help you find out if it is right for you.
It is invite only
The first big difference between Amazon Seller Central (ASC) and Amazon Vendor Central (AVC) is that AVC is invite only. Whereas anyone can join ASC and sell their products, which are non-prohibited and adhere to Amazon’s policies of course, AVC requires an invitation from Amazon to join.
There is no way you can force an invite either, Amazon is interested in brands/products which are guaranteed to make them money. This means, your best chance at receiving an invite is to ensure that you can demonstrate a strong demand for your products.
You don’t set the pricing, Amazon do
A con for some regarding AVC is that Amazon sets the pricing meaning that if someone elsewhere starts selling similar for a lower cost, Amazon will reduce the price of your item to increase volume of sales, affecting the wholesale price you receive.
Amazon states it honours any MAP (Minimum Advertised Price) request. However, there have been instances of Vendors complaining that Amazon sacrifices this in favour of promising its customers the lowest price possible.
Keep in mind that if you choose to sell on Amazon as a Vendor, you should only expect wholesale margins, with Seller Central you will get retail margins.
They work to more traditional payment terms
Payments for vendors are typically a lot slower compared to Seller Central partners. Amazon will pay most AVC vendors on net 60 terms along with an invoice, but it could also be 30 days (with a 2% discount in Amazon’s favour) or even 90 days, payment times can vary hugely, making it difficult to know when payment will be received.
This means that cash flow can be problematic, considering working with an agency that can help streamline your operations to avoid supply chain issues early on may ease the impact this will have on your finances.
You have access to more advertising options
One of the main benefits of AVC is the access to enhanced advertising options through Amazon Marketing Services (AMS). The Vendor version of AMS includes hyper-targeted keyword based ad-campaigns to drive traffic directly to product pages.
Vendors also have access to advertising opportunities using the pay per click ad model. This is a bidding system which allows vendors to bid to appear for certain keywords, and are charged a cost per click fee for clicks on their ads. This fee is usually nominal, but can be higher during peak shopping times and for highly competitive keywords.
Amazon take care of the hard work
Another pro for joining Amazon Vendor Central if invited is that the fulfilment is completely catered for by Amazon. As a Vendor, you’re entering into an agreement with Amazon to fulfil their purchase orders so they can sell your stock directly to the consumer, meaning that logistics, packaging and other costs are handled by Amazon. Not only this, but you also benefit from their customer service and trusted name, increasing the volume of sales.
Also, as it is Amazon’s best interest to sell as many of your products as possible in order for them to gain a profit on the wholesale products, Vendor Central allows for more scope to create high quality content which will help rank your products better. These product pages are known as A+ Detail Pages.
There are agencies that can help
This can all seem a bit daunting, particularly if you are not a huge operation and are dealing with a force as large as Amazon. Luckily there are specialist agencies out there that can handle one, or all aspects of your relationship between you as a Vendor, and Amazon.
A Vendor Central Agency like Arthia, can offer a unique mix of consultancy and management services across different areas, depending on your specific requirements. These areas include:
- Market Research
- Logistics, including fulfilment
- Reporting & Forecasting
- Inventory Management
- Marketing & Advertising (including Amazon PPC, SEO and Content Writing)
- Inventory Management
- Compliance
- Customer Service
You can reject your invitation
If you have decided that Amazon Vendor Central isn’t for you there is no pressure to accept the invitation. In the majority of cases, the relationship with Amazon will not be affected. If you meet the following criteria, however, issues may arise:
- You are a manufacturer
- You sell through Amazon marketplace (Seller Central)
- You sell to other retailers or distributors
Amazon expects to be treated like any other potential retailer with access to wholesale prices, therefore if you reject their offer to purchase from you in bulk they can potentially suspend your Seller Central account if you fail to reach an agreement.