Hi there,
Goodbye 2021, hello 2022 - Happy New Year, Page One subscribers!
Just like we did the other week, I think it would be advantageous to dive further into a trend we saw highlighted in our Ecommerce Trends for 2022. This week, I would like to take a look at Vendor Central.
When collecting trends in the ecommerce industry this is what we heard from David Dayon, CEO of AmazonXperts;
“I think Vendor Central is going to play a much bigger role. There was a little bit of a lean toward Seller Central. I think that vendors are going to have a comeback, just because of some of the benefits you have when you’re working on a Vendor Central account. I’m hopeful for 2022 and I think that you’re going to have people having a little bit of a better handle on the situation.”
We see David note the previous lean towards Seller Central versus Vendor Central so I think it's important to take a second to address the differences between the two.
The main difference to understand when it comes to Seller Central and Vendor Central has to do with who you are selling to. On Seller Central, you are selling to the end-user, and on Vendor Central you are selling your product to Amazon. Now, this comes with a caveat. Are the customers you sell to on Amazon ever really your customers? No. With Vendor Central, Amazon is your customer and issues a purchase order to you. You send them the requested items and they take it from there, because they are the seller AND the fulfillment method. With Seller Central, you have more flexibility. Because, as stated above, the end consumer is your customer, so you can list items to fulfill yourself, or you can send inventory into Amazon FBA for Amazon to fulfill the orders.
Another major difference to note is that Vendor Central is invite-only. This means that Amazon must reach out to you in order for you to utilize it, whereas, Seller Central you are able to join without an invitation.
Learn more about the key differences between Seller Central and Vendor Central in this series from Peter Beke, Co-Founder of The Hawker’s Club. Throughout the five articles, he dives into what factors to take into consideration if you’re entertaining moving even a single ASIN from 1p to 3p.
What Vendors Miss When Considering Switching To Seller Central
On Seller Central, I Have More Control - Is It Really True?
Can You Replicate The Same Experience After The Move?
Your Baggage Goes With You From Vendor Central To Seller Central
Should I Try The Hybrid Approach?
According to Peter Beke, Co-Founder of The Hawker’s Club;
“The trend I see is that Vendors that proactively manage Amazon’s profitability on Amazon’s behalf (both netppm and contribution margin - CM) gain an unfair advantage over the ones that decide to rely on the algorithm setting the boundaries. The first group of vendors have the opportunity to get only minor annual trading terms increases or even avoid the terms increase entirely, in addition to getting wholesale increases accepted.
Needless to say, to have the ability not to concede trading terms increase and have wholesale increases accepted boosts margins. In today’s environment where container prices are higher than ever and raw materials have been constantly increasing coupled with the US Dollar’s inflation means these businesses will be able to enjoy profitability benefits, others won’t. This will enable them to spend more on advertising, acquire higher market share and more new customers, reduce out-of-stock periods, develop new products while being still more profitable than their competitors who choose to rely on the algorithm governing Amazon’s profitability and so sub-optimize.”
My point in sharing this specific trend is to show how many different aspects a seller needs to pay attention to on Amazon. The switch between Seller Central or Vendor Central or vice versa can mean the difference between making page one of search. Ensure you do your research before hopping on to this trend.
Cheers,
Madeline
P.S. - As always, here are some resources that you may find useful when thinking about Vendor Central vs Seller Central in the new year.
