Vendor Express

 

Amazon announced thru an email sent to sellers that it was going to gradually shut down Vendor Express. By May 21, 2018, the company will no longer be issuing purchase orders and will entirely and permanently cease operations effective January 2, 2019.

The email starts with, “We’re constantly looking for ways to improve the selling experience on Amazon. After careful evaluation, we’ve decided to retire Vendor Express and refocus the business on other selling programs.”

Here is the email sent by Amazon:

Key dates to take note of:

May 21, 2018:

Vendor Express will stop issuing purchase orders.

Adding, editing, or marketing of products on Vendor Express will no longer be allowed.

June 30, 2018:

Vendor Express will no longer accept invoices.

July 1, 2018:

Vendor Express becomes read-only.

January 1, 2019:

Vendor Express becomes permanently unavailable.

Amazon Vendor Express

In 2015, Amazon introduced Vendor Express as a cross between Vendor Central and Seller Central. This platform was thought to be a more flexible third option. Wholesalers, even without the need of an invitation, would be able to sell their inventory to Amazon in bulk and not directly to customers without worrying about shipping cost, merchandizing, customer service, and customer returns.

Vendor Express had advantages that sellers enjoyed:

1) It was free to join

Unlike Seller Central, there was no monthly/annual or per-item referral fee to sign up.

2) Bulk order option

After a trial period proves a product’s selling potential, Amazon typically responded with bulk orders, which were meant to generate larger sales volumes.

3) “Sold by Amazon”

A vendor’s listing was associated with the Amazon brand name, being “Sold by Amazon” which often lead to increased buy-box competitiveness.

4) Avoided fulfillment concerns

Once a seller became a vendor, Amazon handled the fulfillment of sold products, making the products eligible for free 2-day shipping for prime members and free shipping for some non-prime customers.

5) Amazon customer service

Additionally, Amazon handled customer service 24 hours a day, seven days a week, freeing up the vendors’ time so they could focus on other business demands.

6) Amazon Marketing Service (AMS)

Perhaps the most valuable offering gained by signing up for Vendor Express was being offered access to Amazon Marketing Services (AMS). A valuable feature, AMS allows users to access more robust sales reports, optimize their content, and create advertisements on Amazon.

Even with the above benefits, Vendor Express is being decommissioned.

Two other options for Amazon Sellers remain: Amazon Seller Central and Amazon Vendor Central.

Why is Vendor Express Being Shut Down?

No specific reason was given for why the selling platform is being closed down.

An Amazon spokesperson has only this to say, “Businesses who have been using Vendor Express will be transitioned to alternative ways to sell on Amazon, to continue providing our customers with the products they want, need and love.”

Amazon Sellers told CNBC, “it was fraught with counterfeits from its early days and likely failed to gain traction among high-quality sellers.” Another said, “Although Vendor Express asked for samples and certain registration forms before placing large orders, the process wasn’t strong enough to ensure authenticity.”

Forbes Contributor, Kiri Masters, also reported that vendors faced issues with the program like long payment cycles and test orders. Vendors had to endure long payment cycles under invoice payment terms that were not negotiable.  In addition, the practice of Amazon requesting for ‘test’ inventory to monitor demand before committing to a purchase was slowing momentum on new products and negatively affected cash flow. Vendors also had no control over product pricing or inventory. A computer algorithm determined both the customer selling price and the wholesale buying price over which the seller had no control.

Joe Kaziukėnas, CEO of Marketplace Pulse said, “It might be that Amazon realized that the quality of brands was not there and the return on this program was not good enough. Amazon would rather have those sellers manage their own risk and sell as third-party sellers.”

Lena Liberman of SellerLabs also quoted Masters, who wrote:

Vendor Express was a selling platform [sic] that was a blend between being a fully fledged Vendor who sells on a wholesale basis to Amazon, and the relatively open marketplace where sellers interact more directly with consumers. It was a halfway house with all the cons of both models . . . Between the third-party marketplace and the invite-only Vendor Central program, Vendor Express was stuck in the middle without a clear benefit.

Liberman then adds her own assessment of the Vendor Express shutting down. She says that “Vendor Express was in all likelihood not profitable or beneficial for Amazon. We have enough history of the company to know that if one of the Amazon 3Ps (product, program, and partnership) is not making money or leading to growth for Amazon, the company does not hesitate to eliminate what it perceives to be a burdensome endeavor. In short, if Vendor Express were working for Amazon, Amazon would keep it.”

Next Steps for Vendor Express Sellers

In the email, Amazon encourages Vendor Express Sellers to sell their products through the Amazon Marketplace. However, these sellers don’t have much choice in the matter because they cannot be automatically absorbed into the invite-only Vendor Central platform.

The only other choice is Seller Central, where they can set their own prices and inventory levels and get paid faster for sales. On the other hand, making the transition from a vendor to a seller is not as easy as it may seem. There are several factors to consider before making the transition.

David Cooley, Manager, Marketplace Channel at CPC Strategy, discussed in an interview the differences between a full vs. partial vendor to 3P transition, as well as the advantages and challenges of the onboarding process.

The decommissioning of Amazon Vendor Express does not spell the end of the world for sellers under this platform. There are existing options which might even work better for them, putting them in a better position than when they were selling under Vendor Express.