Amazon Seller Central: What is it and How Does It Work?
Amazon is well-known as the go-to marketplace for both consumers and many B2C sellers. It offers sellers two primary options for listing their products: Amazon Seller Central and Amazon Vendor Central. Each option has its own set of advantages and disadvantages, depending on the seller's objectives. In this post, we'll explore what Amazon Seller Central entails and how it differs from Amazon Vendor Central.
What is Amazon Seller Central?
Amazon Seller Central is a program that allows sellers to list and sell their products on Amazon's marketplace. Here, Amazon acts as an intermediary between the seller and the customer, while the seller retains control over business decisions. For each sale, Amazon charges a commission, along with a platform fee and additional charges for any extra services provided by Amazon.
How Does It Work?
As previously mentioned, sellers can choose between Amazon Seller Central and Amazon Vendor Central. We will delve deeper into these two programs later. Amazon Seller Central offers two fulfillment methods:
- FBM (Fulfilled by Merchant): The seller handles all logistics, including storage and shipping.
- FBA (Fulfilled by Amazon): Amazon manages everything, including returns, while sellers ship their products to Amazon's warehouses.
Most sellers prefer the FBA program or a combination of both models, with few opting solely for FBM. The FBA program requires a logistics management fee and a monthly storage fee for products.
Which Program is Better?
The choice between these programs depends on the seller's type, needs, and priorities, as each has unique characteristics. The FBA program offers the advantage of using Prime shipping, popular among buyers. For those lacking logistics experience, Amazon's robust infrastructure allows sellers to focus on sales. However, this comes at a cost not all sellers can afford. With Amazon managing inventory, customer service, and returns, sellers may lose some control, which can be critical for business development.
With the FBM program, sellers have more control over inventory and packaging. Prime shipping is possible, but Amazon demands high efficiency to access it. Sellers must ensure proper customer service and operations without Amazon's infrastructure.
Differences with Amazon Vendor Central
Amazon Vendor Central differs by having Amazon purchase products from sellers to sell under its brand. Here, sellers become suppliers to Amazon. Unlike Seller Central, which is open to all sellers, Vendor Central requires an invitation from Amazon, typically extended to high-performing Seller Central vendors. In Vendor Central, your brand is replaced by Amazon's.
While Seller Central offers FBA and FBM logistics options, Vendor Central requires suitable infrastructure to handle Amazon's orders. Additionally, Amazon sets product prices, taking a percentage of the sale price.
Accepting an invitation to Vendor Central means relinquishing some product control. However, selling under the Amazon brand can boost consumer confidence and sales. Vendor Central also provides robust advertising tools like Amazon Marketing Service for creating ads and positioning products effectively.
In conclusion, Amazon Seller Central is a starting point for selling on Amazon, offering more control over products and business operations but also more responsibility. Vendor Central is accessible by invitation, providing different benefits. The choice between Seller and Vendor Central depends on the seller's goals. Neither is inherently better; it all depends on specific contexts and objectives.
We hope this post has clarified what Amazon Seller Central is and the options available for sellers on Amazon's marketplace.
