Are you considering setting up a seller account on Amazon?
Are you planning to join one of the world’s largest marketplaces to increase the daily sales volume of your own e-commerce?
Are you a manufacturer or distributor and wondering what the procurement process will be like or who stipulates your retail price on the magenta of the digital marketplace?
If the answer is yes, let me tell you something: selling on Amazon is not as easy as it seems at first glance.
That doesn’t mean it’s complicated either, but if you want your business strategy to work, before you take the plunge, you should get to know its main service platforms: Amazon Seller and Amazon Vendor.
Would you like to know which is the best option to create a seller account on Amazon?
In this article we analyse the main benefits and disadvantages of each option, so you can decide which type of Amazon seller account is best for you.
What is Amazon seller? Benefits and disadvantages
Amazon is a marketplace with a large audience and one of the most powerful ecommerce in the world. Publishing your catalogue on this online sales platform and having an Amazon Seller account will allow you to attract millions of potential customers to your business. In fact, it is estimated that more than half of the sales on Amazon come from independent sellers.
Plus, it’s a great opportunity to offer your products to the world.
Sounds good so far, doesn’t it?
Who wouldn’t want to be able to sell their products directly to Amazon customers?
It seems impossible to say no to a seller account with such a wide range of possibilities, don’t you think?
However, to promote your products you first have to complete a basic registration verification process. Now, in order to promote your products, you first need to complete a basic registration verification process. Once this verification is completed, you will have the freedom to manage the stock and pricing of your products through Amazon Seller Central, as well as feed optimize to maximize visibility and sales on the platform.
However, although there are many advantages to Amazon selling, there are also some disadvantages.
Or rather: there are some nuances that you should be aware of before jumping into the water.
Continue because we are going to go into detail to tell you what Amazon Seller is and what options exist if your goal is to sell your products through Amazon: logistics, storage, sales and returns and how the platform works.
What is Amazon Seller Central?
If in your case, you sell your products directly to the end customer of the online retail giant, you need to create an Amazon Seller Central account. Through it you will manage your business on Amazon, so think of Seller Central as a partner to help you:
- Track sales and inventory updates.
- Manage your account and get customised reports.
- Manage business details and add product information.
- Create listings.
- Evaluate your performance as a salesperson with customer statistics tools.
- Manage sales and payments for all the products you sell.
It will also help you find useful content to help you explore your business on Amazon. As well as being the place where you publish all your products.
And of course, you will be able to respond to customers, contact seller support and open help requests through case registration.
What are Amazon FBM and Amazon FBA?
When we talk about business, let’s say that logistics is a whole field, with many borders between countries and states and with a lot of estimation work and deadlines.
Not to mention the space and costs for product stockpiling.
That’s why Amazon provides you with two different logistics and warehousing methods:
- If you want to offer your customers more than just the product itself or if you don’t want to pay extra charges, then you should handle the distribution, packaging and transport yourself. In other words, every order will be sold and shipped by your company. In that case, you should apply for the Amazon FBM programme (Fulfilled by Merchant).
- On the other hand, the Amazon FBA model (Fulfillment by Amazon) means that if one of your products has been sold in the Amazon shop, the marketplace will ship it to the end consumer, as you have already stored it in your warehouse. This second option has an extra advantage.
As long as there is stock of that product in Amazon’s warehouse, it gives you access to the Prime seal.
If you are looking to delegate as much as possible during the selling process, selling on Amazon FBA is the perfect option for you. Amazon takes care of the complete management: use of the Amazon warehouse, online selling service and delivery of items to customers.
Of course, it’s not all advantages.
Avoiding headaches comes at a price and Amazon knows it. If you decide to join Amazon FBA’s warehousing, sales and logistics system, you will have to pay extra for these services.
So, is it better to opt for Amazon FBM or Amazon FBA?
There is no single answer. It all depends on your type of business and your infrastructure.
At the end of the day, you have to weigh the costs against the benefits and estimate other non-tangible aspects such as time or potential day-to-day problems.
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Selling on Amazon comes at a cost, whichever option you choose.
That’s why it’s important to maximise your return on investment.
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What is Amazon Vendor? Benefits and disadvantages.
We have seen that Amazon Seller Central uses the online retail giant as a bridge to connect your own products with your potential customers.
In contrast, in Amazon Vendor Central, you become a supplier of the marketplace itself.
What does this mean?
Amazon will be both buyer and seller of your items.
Although there are many differences between these two sales systems, there is neither better nor worse. But it is advisable to know the main benefits and disadvantages of both before making a final decision.
We tell you about them in detail in the following sections.
What is Amazon Vendor Central?
This is the sales system that exists as opposed to Amazon Seller Central. You stop selling to the customer and sell directly to the platform. In other words, you become a wholesale supplier of products to Amazon.
From Amazon Vendor Central Spain, you can no longer choose about the logistics and storage of your products. Once you become part of this service, Amazon manages the selling price, storage and shipping.
Among the main advantages of Amazon Vendor we highlight:
- The confidence it generates in the consumer: the “sold by Amazon” label boosts sales.
- Amazon takes care of everything: you avoid the costs and possible logistical problems that may arise.
- Exclusive promotional programmes so that the seller can learn about the performance of their products and the brand ecosystem they are generating on the platform. For example, Subscribe & Save, Amazon Marketing Services or Amazon Vine.
Although if you thought that everything was going to be advantages, we are sorry to tell you that it is not as easy as it seems at first glance.
What initially appears to be a simpler way of selling than Amazon Seller Central, also has its nuances if we delve deeper into the subject.
For example, you have to be willing to adapt your business conditions to the requirements of your business.
That means:
- Giving up the final control over your product as you sell it directly to Amazon.
- The purchase conditions will be those of Amazon (regardless of whether or not they coincide with yours).
- It presents limitations when it comes to positioning a product and represents a cost overrun for the seller.
But this is not the only thing to bear in mind… Not everyone can become an Amazon Vendor.
Amazon Vendor is achieved by those who can, not by those who want to.
What does this mean? We explain it to you below.
Requirements to become an Amazon Vendor
To become an Amazon Vendor you have to be invited by Amazon and the selection criteria is linked to a number of requirements.
Specifically, it has to do with a high number of revenues.
That is, you start as a Seller and if Amazon detects that you are getting a lot of sales it offers you the possibility to ‘upgrade’ to Vendor mode.
Although this is the main reason, there are other occasions when Amazon will contact you.
For example, if your brand is well known, there is a good chance that you will be offered to become an Amazon Vendor.
Alternatively, Amazon may be interested in having you manufacture products under their private label.
Can I be an Amazon Seller and Amazon Vendor at the same time?
Now that you know the main characteristics between Amazon Vendor Central vs Seller Central it is normal that questions arise about whether both modalities are compatible at the same time.
And the answer is yes: selling on Amazon and selling to Amazon is possible.
But be careful! Although the sales channels are not exclusive, in fact both systems are not incompatible, don’t get carried away when it comes to making a decision and analyse your case carefully.
What may at first appear to be the union of two forces, turns out not to be entirely so.
What aspects do you need to assess?
- Keep in mind that Amazon’s sales models are different from each other, they even use different terminology in the applications, so it can take you a long time to analyse and pool the results.
- Another very important aspect is that you can become your own competition. In the eyes of Amazon you will act as two different companies and your own products will compete with each other for positioning. Or rather, your brand will be in direct competition with that of the marketplace itself.
- Focusing on only one modality without taking into account the other could lead to a negative end result.
Therefore, now that you know the main difference between Seller and Vendor, we recommend choosing one of the two sales strategies to avoid a negative end result.
However, each case will always depend on a detailed study according to your objectives.
Which is better: Amazon Seller VS Amazon Vendor?
You have your own ecommerce and you already know how to become an Amazon Seller, but now the question is: which system is better? Am I more interested in selling on Amazon Seller Central or should I sell on Amazon Vendor Central?
Well, when it comes to selling online on Amazon, the choice between one or the other can determine the success of your business.
Each will have pros and cons for your business, but the truth is that there is no one-size-fits-all answer for all Amazon sellers.
The key is always to weigh up the benefit according to:
- The type of business.
- Your business strategy.
- Seller profile. Product categories.
- The interests. Growth potential.
However, if you have already received an offer to join as an Amazon Vendor, before accepting you should assess whether:
- You can sustain and service mass production.
- You do not mind giving up contact with your customers in favour of Amazon itself.
- You are willing to lose control over selling prices.
These points, together with your defined strategic objectives, will give you the answer that best fits your business: become an Amazon Seller in Spain or accept the invitation to Amazon Vendor (in case you are one of the chosen ones).
Whatever you decide, choose Boardfy to help you increase your sales!
We hope that after having come this far, you are now clearer about the difference between being a Seller and a Vendor and you will choose the one that best fits your business strategy.
In any case, remember that if you want to track your prices to become the best competitor, with Boardfy you can!
- Monitor your competitors or distributors in any marketplace.
- Make automated and intelligent price changes.
- Optimise your campaigns with real-time repricing.
And we are the fastest: we track your competitors’ prices 24 hours a day, with a maximum delay of 3-4 hours.
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