What is Amazon Vendor Central?

What is Amazon Vendor Central?

Vendor Central is an invite-only platform for businesses that want to sell their products to Amazon itself. When you sell to Amazon in this capacity, you are their supplier. The core process is very simple:

l Amazon send you a purchase order listing what they want to buy

l You send Amazon the inventory they have ordered

l Amazon pay you

l It’s then down to Amazon to sell your products to their customers. You are not involved in that.

Vendor Central can be an attractive option. It gives businesses a way to get their products on Amazon, with none of the hassle of selling direct to consumers. It’s much simpler than Seller Central, but it does still have challenges. Common downsides include harsh contract terms, low prices and unexpected additional costs.

The whole vendor process is controlled from Vendor Central, which acts as a hub in the same way that Seller Central does for sellers. From Vendor Central, vendors can do things like check their purchase orders, provide product data and manage additional advertising.

How is Vendor Central different to Seller Central?

With Vendor Central you are selling directly to Amazon. It’s sometimes called first-party or 1P because when a sale is made to a consumer it’s sold by Amazon themselves (Amazon Retail), not by a separate company using their marketplace platform.

On Vendor Central, you submit your product listings and wholesale prices, then Amazon sends you a purchase order. They might order just a few units or maybe hundreds at a time. You don’t have to worry about selling to consumers, fulfilling orders or dealing with aftercare. Amazon is the retailer, so all that is down to them.

On Seller Central, you sell as a third-party on Amazon’s marketplace. In other words, you are selling your products directly to shoppers on Amazon’s website. This means that you are responsible for the whole retail process, and will sell single units directly to consumers. You will need to make sure you’re getting sales, fulfilling orders on time and dealing with any customer support issues.

How do you get into Amazon Vendor Central?

Vendor Central is an invitation-only platform so you can’t simply apply to sell there. There has to be an invitation from Amazon first.

Why would Amazon invite a business to sell on Vendor Central, when there are millions of products already available? Well, there are new products being created all the time, as well as existing brands with poor availability on the site. Amazon has vendor recruitment teams around the world whose job it is to find new brands and products to sell.

Amazon sends Vendor Central invites to many different types of businesses, including:

Existing brands with strong demand from Amazon shoppers

Marketplace sellers who are doing exceptionally well with their own products

Exhibitors at trade shows and fairs with attractive products

The process typically begins with an email from Amazon, saying that they are interested in selling your products. If you let Amazon know that you’re interested in becoming a vendor, they will explain how Vendor Central works and provide their terms of business.

There doesn’t tend to be much negotiating on these terms. Generally, Amazon will make you an offer, and you can either accept or decline. There may be more scope for negotiating if you’re a large, influential brand, or if you’re assigned a vendor manager.

When terms have been agreed, Amazon will create an account for you in Vendor Central and invite you to register. You can then start providing product and cost information to Amazon.

What can you do in Vendor Central?

As the main hub for vendors to interact with Amazon, there are a lot of different features provided in Vendor Central.

The most important ones include:

Orders, where vendors receive purchases orders and provide shipment information.

Items, for vendors to provide product information. You can upload images, edit costs and provide other product-related information.

Merchandising, for handling the marketing of products. This is where you access features like Amazon Vine and A+ Content.

Payment, where you’ll find your invoices and remittances.

Advertising, which takes you to the separate Advertising Console (formerly Amazon Marketing Services or AMS) where you can manage ad campaigns.

Reporting, where you can see how your business is doing. Some reports are accessed directly in Vendor Central, while others can be found via Amazon Retail Analytics (ARA).

Like Seller Central, the features in Vendor Central are not always as intuitive and sophisticated as users would like. It can be a big source of frustration!

How often will I get a purchase order as a Vendor?

Once vendors are set up, they will typically receive a purchase order on a weekly basis. This is usually every Monday. However, if there’s a peak in demand for your product, you may receive purchase orders more frequently.

Amazon prefer to order “little and often” rather than order in bulk and risk getting stuck with huge amounts of stock.

Will Amazon order my products immediately?

It’s important to note that setting a product up on Vendor Central doesn’t mean you’ll receive a purchase order straight away. The ordering process is automated. Amazon’s system will look at sales history and current demand before deciding whether to place an order.

This can often mean that the initial purchase order is smaller than vendors expect. Momentum needs to build and demand increase, before the system will make larger purchase orders for your product.

What if I don’t have the stock to fill a purchase order?

If you can’t fulfill a purchase order, you have two options. You can cancel it completely or, if you’ve been authorized, you can place it on backorder.

But if you run out of stock, you should always mark items as temporarily or permanently unavailable so Amazon doesn’t include them in their purchase orders. Otherwise, if you’re placing too much inventory on backorder, or cancelling more than a certain percentage of an order, Amazon will issue a chargeback. Essentially, they will fine you if you can’t supply what they’ve ordered.

How do I set pricing on Vendor Central?

Vendors set their wholesale price when they create their product listing. If Amazon are happy with the price that you’ve set, they will place an order with you.

If Amazon are not happy with your pricing, you will receive an email asking for cost improvements on certain products. You can then go into Vendor Central and see exactly the price that Amazon is asking for.

You can then either:

l Match the price that Amazon wants

l Lower your price but not as far as Amazon requested

l Mark your stock as permanently unavailable

Amazon is aggressive on pricing and businesses may decide not to use Vendor Central at all, rather than sell to Amazon at the price they demand.