Will Amazon Ban the Hybrid Approach for Sellers & Vendors? [Update]

If you’ve been following the Amazon Vendor community on LinkedIn, you’ve probably noticed an influx of articles stating that Amazon will begin actively approaching brands operating under a “hybrid model” and remove their Seller Central privileges.
 

10/31 UPDATE: Amazon Closing Seller Accounts

 
As of now, we can confirm Amazon is taking action and some hybrid brands are being told that their Seller Central accounts will be closed.

Here’s an example of email received by a Vendor earlier this week:

Amazon obsesses over the customer experience and your brand has opportunities for improvement that will be possible by transitioning your full business to Vendor Central. As a result, we have made the decision to source your products for sale by Amazon only and your existing Seller Central account will be closed within 30 days of this email.

Here’s what we know so far about the recent update to the Amazon’s Terms of Service Policy located in Seller Central.
 

What is the Amazon Hybrid Model?

 
The Amazon hybrid model is the business model of selling both to Amazon as a first-party Vendor (1P) and selling on Amazon as a third-party Seller (3P).

More businesses today are using both Vendor Central and Seller Central to leverage the advantages of both platforms on Amazon’s Marketplace, known as the hybrid model.

Each side has their mutually exclusive advantages; lower fees and more sophisticated marketing tools for Amazon Vendors — while Amazon Sellers enjoy greater control, analytics, and margins.
 

How Will Amazon’s Policy Update Impact Brands Using the Hybrid Model?

 
The below policy (documented within Seller Central) was changed and published sometime in 2018, but since we haven’t seen anything change from an enforcement standpoint as a result.

The documentation we have around the “Standards for Brands Selling in the Amazon Store” below was pulled directly from Seller Central:
 

Standards for Brands Selling in the Amazon Store:

 
“Amazon obsesses over providing our customers the best possible shopping experience. Since the inception of our store, one way we have ensured a great customer experience is by sourcing products directly from Brands and selling them to customers in our store ourselves.

In order to preserve that customer experience, we may choose to source products from some Brands for sale by Amazon only. Other Brands can operate as sellers in the Amazon store if they can consistently maintain our standards for customer experience.

However, to prevent customer confusion, if any of the Brand’s products are sold by Amazon, the Brand may not also sell those products as a seller in the Amazon store.

We measure customer experience in a number of ways, including high instock rates, delivery experience, price competitiveness, and selection coverage. We offer several tools and services to help you meet our standards and sell successfully in the Amazon store, including tools for inventory management and automated pricing, fulfillment services like Fulfillment by Amazon (FBA), and services to grow and protect your Brand like Brand Registry.

If you cannot maintain our standards for customer experience, you might lose certain privileges associated with operating as a seller in the Amazon store (including having your offers featured on product detail pages), or you might lose the opportunity to operate as a seller in the Amazon store altogether.

In that case, you can still offer to sell your products to Amazon so that we can sell them to our customers.”

Frequently Asked Questions:

Who does this policy apply to?

This policy applies to Brands and manufacturers, as well as their agents, licensees, and other representatives selling on their behalf in the Amazon store.

What is the purpose of this policy?

To ensure that Amazon is providing customers the best possible experience while shopping on the platform.

Does this policy impact my ability to sell through other retailers?

No. You are free to sell through other retailers.

How will I know if I need to take any action under this policy?

Amazon will notify Brands if they are impacted by this policy, whether they need to take any actions to maintain a great customer experience, what options they have to take those actions, and the deadlines for taking them.