It’s no secret that running a successful business comes with challenges, and becoming an Amazon Vendor is undoubtedly one of those.
The Amazon Vendor Central program is offered by Amazon reps to those active Seller Central users (especially manufacturers or distributors) who have built a strong reputation on the platform over time; and of course, who have always abided by Amazon policies.
Continue reading to learn more about what vendors are doing to gain recognition in the Amazon Vendor Central battlefield, and weigh up whether becoming a Vendor is beneficial for your business or not.
How to Become an Amazon Vendor
First, let’s lay out the differences between Sellers and Vendors.
Sellers, on Amazon Seller Central, use the platform to sell their products directly to customers; whereas Vendors, on Amazon Vendor Central, sell their products in bulk directly to Amazon at wholesale prices; Amazon holds inventory in its fulfillment centers, and sells them to end costumers; you may have noticed these products on the Amazon platform before with the tagline “Ships from and Sold by Amazon.com.” Vendors can also ship orders directly to customers.
On March 9th, 2019, Amazon sent a communiqué to its Vendors stating that it is now mandatory to register their brand(s) in the Amazon Brand Registry program – while in the past, this was optional. This allows Amazon’s automated ordering system to continue placing orders more efficiently, giving preference to those companies that are brand registered.
While this initiative is beneficial for those brands already in the program, Amazon suspended many Direct Fulfillment accounts that weren’t enrolled, impacting thousands of businesses and potential millions of dollars in sales.
It is important to mention that with Amazon Vendor Central, Amazon manages your product pricing. Your business sets a minimum advertising price and Amazon adapts this rate to generate sales. Although Vendors can submit a minimum advertised pricing (MAP) request, it is common to hear that Amazon rarely takes action.
The Invitation-Only Party
Unfortunately, the Amazon Vendor program is offered on an invitation-only basis. There are a few ways that you could have an invitation extended to you:
- Through Buyer Reps – Each product category on Amazon has buyer reps that are responsible for managing relationships and orders with their suppliers for their specific category. These buyer reps are also the ones responsible for inviting companies, brands and sellers to the Amazon Vendor program. They make the invitations based on whether they believe your product would sell well for Amazon.
- Being a Top Brand – If you are a well-recognized brand, chances are you will receive an invitation from Amazon for the Vendor Program. Amazon wants to have the largest brands on their platform and will work to have your products sold by Amazon.
- FBA or FBM User – Alternatively, Amazon buyers may also invite you to the Vendor program if you are using the FBA or FBM model with products that are selling really well in their category.
- Attending Trade Shows – Amazon buyers are also regularly on the road at trade shows looking for new products that they believe could do well, or products that they believe will compete with top sellers that are FBA or FBM.
- Requesting an Invitation from a Buyer – There is hope for all FBA and FBM sellers that want to go this route. Your request to become an Amazon vendor will be reviewed by Amazon buyer reps and the invitation will be offered or you will probably never hear anything again about it. The best chance of receiving an invitation when you request one is if your product is a top seller on Amazon, your account health is good and you have an established track record of selling on Amazon.
What to Do Once I’ve Received Amazon’s Invitation?
Once you receive the invitation to join the Vendor Central program, you will have to:
1. Accept the trading terms.
2. Enter your banking details.
You can try negotiating the terms, but Amazon will always have the final say.
Take into consideration as well that Amazon will require margin improvements annually from you; hence, make sure you also include these in your costs.
Setting Up Your Vendor Account
Amazon’s Vendor Setup Process is a bit long and can be somewhat confusing, particularly in the areas of New Items Setup (NIS) and Commitment Plans.
The first thing to do is to make sure that you have properly completed the first steps to set up your vendor account to start doing business with Amazon:
- If you have not received confirmation regarding your account within the prescribed timeframe, contact Amazon to follow up.
- If you have not yet completed the setup process, sign in to Vendor Central as a new vendor and begin setting up your account.
- If you already have access with the email and password that you entered during the setup process, you should be able to log in to Vendor Central.
- Locate the Show Your Progress table on the Setup Process Welcome Check in what stage you are for each module and the steps that you need to take to move forward:
- Incomplete – Enter the required information. Some of these concerns: Accepting terms and agreements, adding banking information, adding contacts, adding return addresses, and Adding warehouse addresses.
- Pending Amazon Action – Waiting on Amazon, no action required. Check back at a later date to verify that the module is Completed, and enter any required information if it is Incomplete.
- Completed – Access this module to review your information and make any necessary updates.
- When all your modules are complete, make sure that you have submitted them for final approval. Locate the Submit for Final Approval button to do this. Once approved, your ordering relationship with Amazon is established and you can proceed to do business.
- Update your contact information, credentials, warehouse addresses, new users and user permissions under the Settings.
Getting Paid as an Amazon Vendor
Amazon Vendor Central payment terms aren’t as a attractive as you may think:
- Net 90 Plan – Amazon will pay you after 90 days.
- 1/60 Net 61 Plan – Amazon will pay you after 61 days. (Amazon will get a 1% discount on their payment if they pay you within 60 days.)
- 2/30 Net 31 Plan – Amazon will pay you after 31 days. (If Amazon pays you within a 30-day period, Amazon will get a 2% discount on their payment)
As a Vendor, you will have to pay Amazon for the following services:
- Marketing – Any fees related to the advertising of your product
- Remittance – Any costs for transferring funds from Amazon to your business
- Co-op – Any fees related to the cost of Amazon hosting of your product
- Packaging – Any costs related to the fulfillment and shipment of your product
Optimize Your New Items Setup
As a new Amazon Vendor, you can manage most areas of your account and orders from your account home page.
One of the first steps at this point is to add your products to the Amazon catalog by creating ASINs to display your items.
Before you do so, however, there are a few steps to ensure that your items are optimized.
Taking the time to do your NIS correctly is vitally important to avoid:
- customer dissatisfaction;
- barcode and delivery errors;
- item unavailability;
- and grave pricing mishaps.
All your product information should be saved in a spreadsheet, whether it is an offline document, in a Google Drive, or in a database that you have prepared for this purpose.
Optimizing Your Items Check List
- Check your UPCs/EANs/GTINs to make sure that each of your products has a unique barcode at the consumer packaging level and not just the master carton identifier. Check also that the proper consumer barcode is labeled on the packaging according to Amazon standards.
- Download and review the Amazon Setup Form to familiarize yourself with how different product titles are created. Some forms will combine information from different columns while others will permit you to enter your desired product title or suggest an alternate product title. In some cases, strict compliance with the <Brand><Model Number><Product Title>, <Size>, <Color> format is observed. Maximize the available flexibility in your product title for readability and to get your relevant keywords indexed in Amazon’s search engine.
- Take some time to compose compelling bullet points for each product. These key features and benefits of your product are what will entice a shopper to read more about your product. Use the third person voice and speak plainly about your product without exaggerations. Explain why the product is good and what value it has.
- Add a description in the same manner, putting in more keywords that will help shoppers find your listing, whether they search on Amazon or Compose your sentences in a positive and matter-of-fact tone, avoiding the sales pitch.
- Have professional images done, and optimize them for mobile. Most shoppers are using the Amazon app, so they need to be able to see your product clearly on their mobile devices. Keep your images in online storage to prevent artifacts and name them by UPC code.
Processing Your NIS Items Check List
- Check your template to make sure that it is ready for upload.
- Navigate to the Items tab to begin adding your products and uploading your images. Each product should have at least one image.
- If you get errors from Vendor Central, check the mandatory fields again and re-upload.
- Request variations of styles such as color or size on a single page. This will aggregate reviews and improve the search relevance of your listing and the shopping experience of your customers. Check the attributes that you select so that bullet points and images will change as shoppers click or use drop-downs to see the different choices.
- Download and browse the Variation template from the Resource Center to become familiar with how it works.
- Review what you have so far to make sure that it comes out the way you intended. Sometimes, what shows up on Amazon does not follow as you entered it on the NIS form.
Make sure your product information, variation sets, and images are correct and render nicely.
- Build your Amazon ASINs in Vendor Central to retain control over the content. If you allow third-party sellers to build ASINs, you will not have much control over its content, including bullet points and descriptions.
To ensure that you maintain control, don’t release your setup information to any channels until you have assigned ASINs from Amazon.
When third-party sellers do this setup, they will likely use your UPC and part number, and Amazon will assign that ASIN to your Vendor code.
Third-party sellers may use a different UPC, and this will create a separate page and ASIN. This means more trouble for you as you will have to create a ticket to get this manually merged into your page and your ASIN.
Amazon will process your submission, troubleshoot errors, and create your ASINs. When the process is complete, you will receive a notification.
When you are done uploading your new items, give Amazon three to five days before you check if they are live.
Within another few days, Amazon should place an order.
Note that Amazon prefers Electronic Data Interchange (EDI) integration for exchanging order-related information. If your company is or might soon be integrated, visit the Technical tab of the Resource Center to get familiar with EDI.
One benefit of EDI is that you will no longer need to provide warehouse address information to send the EDI 856 document.
***Note also that with EDI, your freight terms are set to Prepaid.
Adding Products to a Commitment Plan
You can add products to the Amazon catalog for an existing commitment plan.
You may also be eligible to add product details for an existing commitment plan. Below are the steps.
- Navigate to Items and Add Products in Vendor Central, and select what action you want to process: Add commitment plan products, or Add details for commitment plan products.
- Select a Template to work with and navigate to the Commitment Plans. Choose the commitment plan that you want. Alternatively, click the box in the header row to select all commitment plans listed in the table. Select the version of Microsoft Office that you are using and download the template, or click Import products from Inovis.
- Save your downloaded Excel template. Do not change the default file extension. Open the template and add any missing product details. When you are done making additions, click the Amazon menu and Validate Template. Review once more for errors and save the template.
- Go back to Vendor Central and navigate to the Add Products Click Browse, select the template file, and Submit file.
Once you have submitted your file, all you need to do is wait for Amazon to confirm, and you are all set.
Contact AMZ Advisers to receive personalized information regarding Amazon Vendor Central or anything related to building a successful business on Amazon.