Acting as a third-party seller isn’t the only way to make money off of Amazon. You can also choose to sell your products directly to Amazon itself, which will then sell your products for you.

It’s the difference between being an Amazon “seller” and an Amazon “vendor” – each of which comes with its own unique dashboard and resources.

Not sure which one you should use? Need help transitioning from one to the other? Let’s take a look at the key differences in each below.

Amazon Sellers vs. Vendors

amazon vendor vs seller

The biggest difference between Amazon sellers and vendors is who’s actually selling the product.

  • Sellers list, price and market their products themselves.
  • Vendors sell their products to Amazon-employed buyers, who then list and resell the products to Amazon users.

 

Vendor Central Pros and Cons:

Pro: “Sold By Amazon”

Amazon sellers can join Vendor Central only via invite from the corporate team. Once they’re on board, their products will then be listed as “sold by Amazon” – likely offering a boost in shopper trust and confidence.

 

amazon vendor vs seller

 

 

Pro: Marketing Tools

Vendors also enjoy added marketing opportunities through AMS (Amazon Marketing Services) and are only responsible for the back-end of the supply chain – inventory, billing, etc. 

AMS offers effective tools to help vendors stand out against their competitors and drive traffic to product detail pages and branded pages. As vendors know, every click does not equal a purchase – so it is important to understand how to leverage AMS to its full potential.

amazon-vendors

 

The primary benefit of using AMS over other services, is that it gives sellers/advertisers a direct opportunity to get their products and brand in front of additional in-market shoppers on Amazon.com.

Specifically, the ability to target individual product detail pages gives sellers an opportunity to introduce their products directly alongside competitor products when consumers are at the last stage prior to conversion.

Pro: Avoid Fees

Vendors avoid typical Amazon seller fees, which includes costs for referrals, fulfillment or even just having an account in the first place.  Instead, vendors pay a flat fee for going “pro,” which allows them to sell unlimited products for $39.99 per month. It also includes fulfillment by Amazon and gift wrapping options.

FREE GUIDE: “Evaluating Amazon’s Vendor Premium Services

Still, despite its obvious advantages, Vendor Central isn’t without its drawbacks.

Con: Margins

Since pricing is fully in the hands of Amazon, vendors may not see the profit margins they were hoping for on certain products. There are no minimum pricing policies, so a vendor could, technically, even lose money if the price drops too low.

Con: Inventory Concerns

Being an Amazon vendor also comes with some high stakes logistical concerns. Amazon can be pretty demanding when it comes to inventory and order fulfillment, and new vendors often struggle to maintain the proper stock levels.

Con: New Product Launches

If you are a vendor, it can be difficult to launch products using Vendor Central alone. Amazon has no incentive to buy that product from you because they don’t know the potential of the new product just yet.

Amazon is unsure of how sales will preform. It could be a successful product in the future but Amazon isn’t likely to place purchase orders on an item with no history.

launch new products on amazon

Seller Central Pros and Cons:

Pro: More Control 

Though sellers do have to put in more work (and maybe more money in fees), they tend to have a bit more control than their vendor counterparts. They’ll need to pay various fees per item and per sale, and they’ll also have to manage their own pricing, customer communication and fulfillment (unless they pay extra for FBA.)

 

“Typically, 3P sellers have more control over their products,” David Cooley, Manager, Marketplace Channels at CPC Strategy said.

“They also have more control over their customers because if you’re a vendor you’re selling items (purchase orders) of your product(s) to Amazon (depending on how many they want to buy) and then Amazon sells those products to your customers.”

“But if you’re a 3P account, then you’re selling directly to your customers via the Marketplace and so there’s a little bit less of disconnect between the manufacturer and the actual customer. (Think of Amazon as the middle man – and you’re removing him from the equation). You’re also in control of pricing, promotions, and the number of units you want to sell.”

Pro: Better Analytics

But those using Seller Central also get access to detailed analytics that can help them boost their bottom line, and they’re able to better control their returns by heading off unhappy customers directly. Additionally, pricing control allows them to easily take advantage of high-demand periods or offer sales – something vital to staying competitive in the holiday season.

Con: Not “Sold by Amazon”

Overall though, sellers typically see fewer sales than vendors, simply because they don’t come with the “sold by Amazon” endorsement. For many sellers, the added flexibility of the program is worth the decrease in sales.

Summary of Vendor Central vs. Seller Central:

Let’s do a quick summary of how Amazon’s Vendor Central and Seller Central measure up.

  • Access – Vendor Central: Invite only, Seller Central: Open to any seller
  • Pricing – Vendor Central: Amazon controls, Seller Central: Seller controls
  • Marketing – Vendor Central: Access to Amazon marketing services and A+ content; Seller Central: Access to enhanced brand content
  • Sales – Vendor Central: Sell to Amazon, Seller Central: Sell to Amazon customers
  • Logistics – Vendor Central: Adhere to Amazon’s logistics process; Seller Central: Sellers control their own logistics or use FBA
  • Messaging – Vendor Central: Amazon handles messaging and returns, Seller Central: Sellers handle messaging and returns
  • Analytics – Vendor Central: No analytics to view, Seller Central: Robust analytics to improve sales and marketing efforts
  • Fees – Vendor Central: $39.99 flat rate per month for unlimited sales, Seller Central: Traditional Amazon seller fees

 
Though you can’t outright choose to become an Amazon Vendor, it’s important to study up on these pros and cons in the event you’re offered an invite to the platform. 

Both Vendor Central and Seller Central come with very unique advantages, so the right one for you will depend on your resources as a merchant, the level of control you want and the fees you’re willing to pay.

How can I transition from Vendor to Third Party Seller?

The good news is if you are a Vendor, you can always try to revert back to Seller Central if you’re not happy with the Vendor experience. 

At CPC Strategy we are fortunate to have access to a specific 3P portal which gives us an inside track to Amazon’s 3P onboarding team. It provides a dedicated onboarding contact that can help vendors transition their 3P account, assist with troubleshooting, and set up their product listings.

Unfortunately, if you are transitioning to the 3P side of the business (without access to a portal) – there’s a 60 day waiting period for Buy Box eligibility. CPC Strategy’s portal allows us to bypass this waiting period – so that the brand manufacturer can get Buy Box eligibility right away.

ProTip: Amazon almost always wins the Buy Box when competing against 3P Sellers on a given listing unless the 3P offer is significantly lower in price.

But the transition process can get kind of tricky. For example, if you are an established vendor – your Amazon vendor manager can block you from creating a 3p account. Why, would they do this?

Well, it has to do with the fact that Amazon Vendor Central and Amazon Seller Central are viewed as two separate entities fighting for the same business. Though Vendor Central and Seller Central fall under the wide spread e-commerce platform that is Amazon, they are very different.

If a vendor says they want to transition to the 3P side of the business –  then that’s basically like you as a vendor saying you’re going to take your business away from the vendor side and move it into the 3p.

You can think of it as one company losing business to another, even though it is all housed under Amazon’s roof. That is why vendor managers will sometimes block the creation of the 3p & technically they do have the final say.

To learn more about Amazon Seller Central, Vendor Central or various Amazon seller fees, email tara@cpcstrategy.com.

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About the AuthorTara graduated from the University of New Hampshire with a B.S. in Journalism / Business. Her passion for creative publishing and quality reporting landed her work opportunities at several companies in Massachusetts, New York and California. She is a leading voice behind CPC Strategy’s Blog. See all posts by this author here.