Amazon Vendor Central - Everything You Need to Know

Amazon Vendor Central - Everything You Need to Know

Friday, September 27, 2019Eric Zegarski

Everything You Need to Know About Amazon Vendor Central

There are two ways to sell on Amazon, Seller Central and Vendor Central. With Seller Central, the merchant maintains ownership of the product until a customer purchases via Amazon Marketplace. When it comes to fulfillment, Amazon offers two options, FBM (Fulfilled by Merchant) and FBA (Fulfilled by Amazon). Looking to learn more about FBM and FBA? We have extensive guides for both Fulfilled by Merchant and Fulfilled by Amazon. The Seller Central alternative, Vendor Central, is geared for high volume and well recognized brands.  

What is Amazon Vendor Central?  

Vendor Central is reserved for the elite brands looking to sell on Amazon. The only way to be a part of this program is to be invited by Amazon. As a Vendor Central merchant, you are an Amazon supplier. Amazon is responsible for selling directly to the consumer and fulfilling orders. 

Therefore, your core relationship with Amazon can be boiled down to these 3 points:  
  • Amazon sends you a purchase order for your products 
  • You send Amazon the products they ordered  
  • Amazon pays you for their order

Amazon is always on the hunt for new brands and products to add to their Vendor Central program. Common ways that Amazon scouts brands and products include the following:  
  • Existing brands with strong demand from Amazon shoppers 
  • Amazon marketplace sellers who are doing exceptionally well  
  • Exhibitors at trade shows and fairs with attractive products  

How Vendor Central Differs from Seller Central  

With Vendor Central you submit your product listings and wholesale pricing to Amazon. When Amazon needs a replenishment of your product, they send you a purchase order. The order amount can sometimes be ambiguous from order to order since it is reflective of your products demand on Amazon. If your product is a seasonal one, then you can expect large peaks and troughs with Amazon’s order volumes.  

Unlike Seller Central, Amazon manages the end to end relationship with the customer. They handle everything, including fulfillment and post purchase customer relationship management. On Seller Central, you sell as a third-party vendor on Amazon’s Marketplace. Therefore, those action items remain your responsibility.

How Amazon Sets Pricing for your Products  

As a Vendor Central vendor, you set your wholesale price to Amazon. If Amazon finds your wholesale price attractive, then they will place an order with you. Once in a blue moon, Amazon might not be happy with the wholesale pricing a supplier provides them with. If that occurs, then Amazon will send their desired pricing back to the supplier. As an Amazon supplier, you can take the following action:  
  • Match the price Amazon wants  
  • Lower your price but not as low as Amazon requested 
  • Mark your stock as not available for purchase 

If Amazon’s pricing requirements are too low for you, then you can always sell directly to the consumer at your desired price via Seller Central. However, based on your product’s category, Amazon will collect a commission on each sale. Discover a breakdown of Amazon’s commission structure here.  

Frequency of Purchase Orders from Amazon 

Most vendors tend to receive orders once a week. As mentioned before, due to changes in product demand, Amazon might increase its order frequency. Amazon has their own internal systems and processes to predict demand for your product. As a result, the first initial purchase by Amazon might be smaller than you are anticipating. Amazon’s order model is to order little and often, rather than being stuck with large amounts of inventory on hand.  

Integration Supercharges Your Amazon Vendor Central Relationship  

Did you know that you can be heavily penalized by Amazon if you’re not able to fulfill their order request? Therefore, strict and accurate order and inventory management is a must if you’re a part of the Vendor Central program.  In addition, Amazon Vendor Central requires you to be EDI complaint. If you’re new to EDI then we strongly recommend you learn more about Amazon’s EDI requirements. An integrated solution form eBridge will ensure you're EDI compliant. In addition, you’ll have bi-directional flow between Amazon and your ERP. Furthermore, we have a prebuilt Amazon connector, and as a result can implement an integrated Amazon solution with ease.  

In addition, we are hosted on Microsoft Azure, therefore ensuring an almost 99.99% uptime and industry leading security. With an integration solution, you can ensure that your commerce network is connected and communicating data bi-directionally.

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