Amazon Vendor versus Seller

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Amazon vendor

Still thinking about whether to become a Seller or Vendor at Amazon? A Vendor at Amazon is very different from a Seller. You need to find out what they’re all about so you can decide what will work for you.

Let’s have a look at what an Amazon Vendor is first.

Who is an Amazon Vendor?

A Vendor sells products to Amazon through the wholesale program and Amazon sells the products to the end clients – Amazon customers. The Vendor is duty-bound to provide Amazon warehouses in different locations with the products needed. Amazon may either hold the inventory in their fulfillment centers or, if the Vendor agrees, to have Vendors ship orders directly to the customers.
Still thinking about whether to become a Seller or Vendor at Amazon? A Vendor at Amazon is very different from a Seller. You need to find out what they’re all about so you can decide what will work for you.

Let’s have a look at what an Amazon Vendor is first.

Who is an Amazon Vendor?

A Vendor sells products to Amazon through the wholesale program and Amazon sells the products to the end clients – Amazon customers. The Vendor is duty-bound to provide Amazon warehouses in different locations with the products needed. Amazon may either hold the inventory in their fulfillment centers or, if the Vendor agrees, to have Vendors ship orders directly to the customers.

Amazon vendor selling

Selling as a Vendor

As an Amazon Vendor, you used to be able to sell in two ways.

Vendor Express

The Vendor Express program is shutting down, but just for comparison, this system allowed you to avail of free handling and storage of merchandise or choose direct fulfillment, otherwise known as drop shipping. You can sell in bulk and this method is open to anyone.

Vendor Central

Vendor Central is the remaining way that you can become a vendor on Amazon, It is an invitation-only system, however. If Amazon allows you into that program, you can collect product orders, oversee their shipment, increase invoices, and handle products and marketing strategies.

The invitation, usually through email, has to come from the retail team that is expressing interest in your brand. On the other hand, you could also try and connect with Amazon using the Contact Us link on Vendor Central. This does not guarantee an immediate reply, however, unless your brand is causing quite a stir in the industry.

Vendor Central Terms

If you do get invited, you will be required to accept their terms of trading and enter your banking details before you can fully access your new Vendor Central account.

Amazon Vendor Central Terms

Note that you should negotiate the terms before agreeing because it would be more difficult to renegotiate later. Many times, the terms will be skewed in Amazon’s favor, so you need to know that this arrangement will benefit you before you put your John Hancock on it. Make sure you read and understand the fine print and include allowances in your computations because Amazon will be requiring you to make yearly margin improvements.

Listing Products

With full access to you new account, you can start setting up your products. Expect to wait a bit before your products appear live on site because the catalog team has to review and approve the products to make sure that they conform to Amazon style guides.

When the products do go live, expect to receive purchase orders from Amazon, and be prepared to fulfill them promptly. Note, however, that a live product does not assure you of repeat orders from Amazon. Amazon has an ordering system that keeps tabs on the sales history, glance views, sales growth, present inventory and lead times of all products.

You can encourage conversions to boost your numbers and increase Amazon’s interest in your products by either offering them through Direct Fulfillment and ship items directly to clients or take full advantage of the marketing opportunities that Vendor Central has to offer.

Before you decide to become an Amazon Vendor, though, look at what is in store for you as a Seller.

What is an Amazon Seller?

A Seller sells products retail directly to customers through the Amazon marketplace. You own your products until your customers purchases and receives them. As a Seller, you use Amazon’s Seller Central Portal to manage your online business without having to maintain your own website. This is the cheapest way to start selling on Amazon.

Selling as a Seller

Selling as an Amazon Seller can be done in one of two ways.

Fulfillment by Merchant

Fulfillment by Merchant means that you choose to fulfill the orders yourself. You pick, pack and ship the items and handle returns, exchanges, refunds and customer service. This is a good choice if your products have longer lead processing times.

Fulfillment by Amazon

The hassle-free way where you let Amazon do the grunt work is called Fulfillment by Amazon. Here, you don’t have to keep and supervise your own inventory. All you have to do is to send your products to one of Amazon’s warehouses and they’ll receive the order and handle all aspects of fulfillment for you whenever somebody orders your items.

You can also opt to let Amazon handle customer service, but it’s ideal to keep this task since you can generally provide a better experience with your knowledge of your products.

Getting Started as an Amazon Seller

Amazon itself provides a How it Works page and the appropriate links to give a step by step guide for newbie third party sellers on how to start selling on Amazon. Here’s how it basically goes.

  1. Decide what you want to sell.

You can choose from 20 different categories that are open to all sellers. Then choose either a Professional Selling plan that allows you to sell an unlimited number of items and pay a $39.99 subscription fee, or an Individual plan where members pay no monthly fee but only shell out $0.99 for every item sold. Both plans still, however, require other selling fees when an item sells. After making the choice, you can then register and create your account Seller Central.

  1. Add your products to the Amazon marketplace.

You can create product listings one by one or upload in bulk if you have the Professional Selling plan. Make sure that you optimize your listings and have a launch plan in place so your new products can get maximum visibility. Don’t forget to get FBA set up if you want Amazon to handle everything.

Amazon seller listing

  1. Prep your bank account.

You need to deposit into your bank account the payment for the balance of your orders. Then wait for the email confirming this payment.

  1. Start selling.

You will receive notifications from Amazon when customers start putting in their orders. If you’re on FBA, just monitor for discrepancies. If you’re on FBM, it’s time to get moving! Amazon is very serious about fast shipping.

Final Thoughts

There are advantages to both selling as an Amazon Vendor and Seller. Only you can say which one suits you best. In general, however, being a Vendor is great for those who don’t want to deal with the nitty gritty of retail and don’t mind leaving most of the decisions up to Amazon. If you want to maintain more control over your products and work directly with consumers, then being a seller is the better choice.

Whichever way you decide to sell your products on the marketplace, what is important is to get started. Then you can work your way up to generating that target five- or six-figure income that you are dreaming of.

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Julia Valdez

Julia Valdez

Julia is a professional teacher and long-time lover of the art of words on paper and the stage. She has an entrepreneurial heart and spends most of her time doing marketing and management, freelance content writing, volunteer work, and sharing lots of laughs over little crazy things.

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