Amazon Seller Central vs Vendor Central or Hybrid Selling Model – Which is Better? Pros & Cons

Table of Contents
Amazon Vendor Central vs Seller Central
About Carina Mcleod
Amazon seller, vendor, or hybrid?
What is an Amazon vendor?
How to tell if a product is sold be a Vendor Central account
Reasons to become a vendor on Amazon
How to know if a product is sold by a Seller Central account
Reasons to open a Seller Central account on Amazon
What is a hybrid seller account?
What is the best choice for your company / brand?
What additional tools do you get as a vendor on Amazon?
Does becoming a vendor boost your business?
What is the process for becoming a Seller and Vendor (hybrid) on Amazon?
How much does your workload increase when you become a seller-vendor hybrid?

Amazon Vendor Central vs Seller Central

Augustas Kligys:
In this video, we talk about Amazon vendor central. We compare vendor central with seller central. And we also talk about hybrid model where seller is using the seller account and the vendor account. So, you will hear a lot of useful information. You will hear some tips when and how to become a vendor. Is it worth for you? And my guest today is Carina McCleod from e-commerce nurse. She works with sellers and vendors, and actually in the past, she also worked on the vendor team at Amazon directly in UK. So, enjoy this video and don’t forget to subscribe to the YouTube channel of Orange Klik and click the notification bell as well. Because here we talked to different Amazon SEO consultants, software providers, and event organizers. So hello, Carina. It’s nice to have you here. Could you please introduce yourself and tell us how you help Amazon sellers?

About Carina Mcleod

Carina McCleod:
Yeah, of course. And thank you for letting me be on the, on your show today. I’m Carina McCleod and I am the founder and CEO of eCommerce nurse. We’re an Amazon focused agency where we work with both Amazon vendors and sellers in North America and Europe, and help them grow their business on Amazon through account management, marketing projects and consulting. I myself have been in the Amazon space for over 15 years. So, I’ve spent seven years working for Amazon within vendor management in the UK. And then the last eight years have been working with both sellers and vendors with the business e-commerce nurse and also consulting for a number of brands across the globe.

Augustas Kligys:
And as far as I remember, you have a lot of experience in about vendor central, and this is what we’ll talk today. So, we’ll go through the differences between the vendor and seller accounts and we’ll explore the possibilities for sellers to switch to vendors and maybe vice versa. So, I know that you prepared some slides, shall we jump into them right now?

Amazon seller, vendor, or hybrid?

Carina McCleod:
Yeah. So, there’s always this question out there of whether or not a business should be a seller or a vendor or on Amazon or both, and many, many businesses ask that question. And first off there’s the step back as in, what is each of those? Because sometimes it can be a bit muddy in terms of having a clear understanding of the different ways in which you can sell on Amazon. And so, I’m going to look at each of those and then talk about each of them, the seller and vendor, but then also this hybrid, which is a word that’s thrown around a lot, these days in the Amazon industry.

What is an Amazon vendor?

So first off, if we talk about then what is an Amazon vendor? So, an Amazon vendor is also known as one P, first party and really what you are when you’re in a vendor selling on Amazon, you take on this role as a manufacturer, you could also be a wholesaler or a distributor. And the reason being is that you are selling your products directly to Amazon. You’re not selling your products directly to the end consumer, the end consumer will buy your products, but effectively you’re taking on a wholesale relationship with Amazon. Like you would, if you were selling to other stores like Walmart, Tesco and so forth. 
So, it’s a typical, really a traditional way, the old traditional way of working with bricks and mortar, that style relationship.  So, Amazon is the customer, which then means that Amazon of course manages the whole inventory and the customer service. So, Amazon decides how much inventory they want, and they make that decision as to they raise purchase orders based on the stock that they believe that they will sell for your products. And also, they manage the after sales and the whole customer journey when it comes to customer service and returns as well. And another thing that they do is they also control the price and the listings and that being because effectively they’re buying that inventory, they pay for the goods and really, they then own those goods so they can decide what’s the retail price that they want to sell the product at. They can then decide and then control that content on the product pages. 
Now, of course, when it comes to Amazon, you’re providing Amazon with everything in terms of content. But at the end of the day, when you work with Amazon as a vendor effectively, they have the last say and vendors do find that where Amazon start tweaking their content because they have purchased that inventory and then taking ownership. And then when you are a vendor you sell via the platform, which is known as vendor central.

How to tell if a product is sold be a Vendor Central account

Now, often businesses are not sure when they look at competitors or other brands selling on Amazon as to understand, how do you differentiate, or how do you know who is selling what? And a key example here is this is a product that we know is sold by Amazon because effectively on the product detail page, it will highlight that the product is dispatched and sold from Amazon. So that’s a clear indicator that this relationship with this product, of course, this is naturally an Amazon product, but this is sold and owned by Amazon. 

Reasons to become a vendor on Amazon

Now, the question then often comes in is, is why, why be a vendor? Now, because you’re taking on this wholesale relationship as a vendor, this means that you are the idea is that Amazon starts purchasing in quantity. They’re not ordering in single units. Now it might be that you’ve got relationship where Amazon is. If you have got that relationship, you might want to review that because that’s definitely not going to be economically viable when you’re selling a product to Amazon at a wholesale price. So, the idea is that they send in, they purchase inventory in volume. Now volume is a term that could mean many different things. Some businesses are expecting Amazon to order in pallets from day one other businesses are aware that might not be the case in that role ordering in cartons or case packs. But the idea is that they’re ordering in a certain quantity that makes it viable for your business. Now, one thing to highlight here from an expectation point of view when working with Amazon is that Amazon doesn’t have a warehouse where they’re buying huge amount of inventory and leaving it there for six months in storage. What they do is they buy little and often. So, you’ll find that you’re getting purchase orders from Amazon on a weekly or even twice a week basis, because the idea is Amazon has a fulfillment center. So, what goes in, goes out almost immediately that they’re not sitting on loads of loads of stock, and that often results in smaller orders, but more frequent orders as well. Now, as I mentioned, we’re talking about inventory so of course being a vendor is great in the sense that Amazon manages your, your inventory. You don’t have to think about how much inventory to send to Amazon. 
Amazon is placing those orders. And in most cases, giving you a forecast, now that forecast is sometimes questionable. If you don’t have a really good, inventory or your sales fluctuate greatly, then the forecast probably aren’t that great. But if you have a very sort of a static business, predictable business, then the forecast can often help you. Now, Amazon also manages the whole ordering process, the whole returns customer service. So, if you’re a business that’s very wholesale orientated, you’re not necessarily set up for direct to consumer. Then this model works very, very well for those businesses. Now, another key reason why business has become vendors is it does actually can open up doors to new initiatives and programs. So, for example, Amazon Fresh or Amazon Prime now different programs that Amazon start often start within the vendor side. And so often, if you’re a vendor and Amazon is looking to launch a new program, you might then find that you receive an invitation for that, which is definitely an incentive. Another reason why businesses decide to become a vendor because they don’t compete on the buy box as in Amazon does that on their behalf. So, they don’t have to start trying and playing around with pricing because Amazon’s automated systems are already doing that. 
The reason why some businesses might not want to compete on the buy box is partly down to not wanting to, because they may have, retailers, they sell the product to, they don’t want to be seen engaging in price Wars with their own customers. And so let Amazon do it and then hide basically and put the blame on Amazon often is the case with the buy box, but no it’s about businesses that do have a good relationships with their retailers, not wanting to start competing with their products, with people that they’re already selling to. Now, if I were doing this presentation a few years ago, I would probably have a chart that highlights the benefits of vendor versus seller. Today, it’s very much an even level playing field as in seller has advanced a lot and will go on to seller shortly. It’s advanced a lot in the sense that a lot of the marketing tools that were only available in vendor, such as A plus content, brand stores, sponsored brands, all these additional features that made businesses almost want to become a vendor and no longer the case it’s even level. If you’re a brand owner with a registered trademark then, then you have access to everything on seller. What that then does, is it makes it very much an even level playing field. So, the only reason why businesses would then be a vendor or seller is often down to their distribution set up, and how they want to grow their business and the whole infrastructure that they have to manage orders and everything. 
And then just moving on to seller. So, what to sell on Amazon now? I imagine most probably a lot of people viewing this, the question is more about understanding the difference of vendor, because a number of businesses, probably already a seller looking to take that step over to vendor. Now, Amazon seller also known as a three P, third party you’re effectively taking on a retail role. Now you could be a manufacturer. You could be a wholesaler or distributor, but on Amazon, you’re effectively a retailer because you’re selling your product directly to the end consumer on Amazon. So, Amazon’s customer is effectively your customer, and you’re using the Amazon platform to sell your products, which is very different to selling as a vendor where Amazon is basically seller of record. And they’re sending your product. They’ve already purchased that inventory from you. Well, depending on payment terms, but they’ve purchased it from you and they’re selling directly to the customer. So as a seller, you then start managing a lot more. You start managing you then have to manage your inventory. 
You manage your customer service. Now, of course, if you go Fulfillment by Amazon, FBA, then Amazon is going to take that strain away from you. So, they will then manage your inventory and customer service. But even if you do FBA, there is still an element of where you need to decide how much inventory you send to Amazon and have in Amazon’s fulfillment centers. And still customer questions might come your way that are non-order related, which you would need to manage. You would then control your own pricing. So, you then decide completely what retail to sell at the product. And of course, you then control your product listings, the content and everything, as long as it is in line with Amazon’s policies. If not, you might find not necessarily Amazon changing things, but Amazon giving you warnings that your content needs to be changed, but effectively you’re making that decision as to what content you want showing on Amazon. And then of course like vendor central, seller central is the platform that you’ll be selling on.

How to know if a product is sold by a Seller Central account

And again, a prime example here of where I’ve got in the box over here on the right-hand side, you know that this is a seller, because of course it’s a Fulfillment by Amazon. And then it’s sold by the name of that seller on Amazon so that you can be able to highlight the key differences is between the two.

Reasons to open a Seller Central account on Amazon

If your business has the option to decide whether they become a vendor or seller, they may have to set up, they have a wholesale setup and a direct to consumer setup. Why a business would then choose seller over vendor might be that they want to control their own pricing. Because as I said, as a vendor, Amazon sets the retail prices. 
Some businesses don’t like that. Some businesses don’t trust Amazon, they see Amazon as a bit of a discount retailer. And so, they fear that Amazon could start discounting their products. And so, you, as a seller, don’t have to get involved in that. You effectively choose what price you want to sell that product at. Again, some businesses want to manage their own orders. They want to manage the inventory. They don’t want to pass that on to any other business. They have a good setup. They have a direct consumer business already, and they want to manage that themselves and have all that control over their product listings. Now, you’ve seen a lot here about why a business remains a seller, and doesn’t want to take that step to vendor or a vendor might want to be a seller is down to really having that control, controlling their product listings, controlling their pricing, controlling the inventory and orders as well as them having that direct contact with the end consumer. Because when you’re selling to Amazon on vendor, you don’t know who the end consumer is because you’re not engaging with that customer because that’s, Amazon’s customer, not your customer. 
Amazon’s your customer when you are a vendor, but when you become a seller, you have that ability to make direct contact with that end consumer the customer on Amazon. Now, of course, Amazon has its terms of service, and it is quite restrictive in terms of what you can and can’t do in terms of contacting customers. But you still have that door open. It’s not completely closed or hidden, is it or not hidden, visible, um, compared to a vendor and greater margins often you’ll find when you’re a vendor, you have to offer products to Amazon at a wholesale price. So, you’re already giving Amazon a reduction on your pricing. If you’re then selling or as a seller, you’re obviously selling at full retail price. So, you’re able to then get greater margin. Now, this isn’t always the case. We speak with some businesses that actually that business is more profitable on vendor than seller. And that’s often because they have low price point items that the FBA fees and everything don’t make sense for, or it could be a number of different factors, but often you’ll find that seller can have greater margins because you can play around with the retail price and decide what margin you want to have. 

What is a hybrid seller account?

Now, lastly, you’ve got a hybrid. So, what is a hybrid? A hybrid is effectively when you’re basically a vendor in seller. So, you’re taking on both this wholesale relationship selling product to Amazon. You’re also selling product as a seller direct to the end consumer. So effectively, you’ve got access to two accounts, seller central and vendor central, and you’re managing your assortment between the two platforms. Now, this requires a lot more, I’ll go back to this. This requires a lot more of a strategic approach.  It’s not the fact that you just open a seller account and a vendor account mirror, exactly what you’ve got in your vendor account into your seller account. Because effectively what, you know, there’s a question of what’s the point, okay, you might have backup inventory farmers and doesn’t order enough on vendor or, and so forth. Prime examples was with COVID where Amazon wasn’t ordering or letting you send in more inventory. You have more backups solutions, but what you want to avoid is just competing with your own listings and just mirroring it. A lot of businesses manage the assortment in a very more strategic way as in, okay, singles don’t work on vendor because Amazon are complaining that the products don’t bring them any margin. And so, you decide to sell the singles on seller, but you offer Amazon multi-packs on vendor and they start ordering in the case, pack quantities and so forth or vendor, or it might be that you sell to Amazon on vendor, your inventory. 
That’s always in stock because Amazon’s placing orders every week. But the products that you have limited stock available, you only sell on seller, or it might be that you find that seller central is good for launching your products that are more price sensitive when they’ve just come to market. So, you might not want to offer your new products, your effectively your babies that you want to nurture at the start. You might want to nurture them, and it gets sales accelerated on seller. And then when they get to a certain life cycle, you might then want to move them over to vendor. So, there’s a lot more thought behind why you would take a hybrid approach as opposed to just going, yeah, I want to be a vendor and seller and just have all my products on that.

What is the best choice for your company / brand?

Then of course, what’s right for my business. A lot then depends on overall with your business model, as I mentioned and a couple of points here is really about, are you actually set up for wholesale? Are you set up for direct to consumer because that answer will completely eliminate one versus the other. 
Another thing is, if you are a business and you sell to loads of major retailers, let’s say in the UK, and you then say, you want to be a seller and not a vendor, you might even find that Amazon might challenge you on that because effectively, if you’re selling to other retailers, you’ve got a wholesale set up. So why wouldn’t you sell to Amazon? So, there’s lots of things to think about, really with your business set up is, are you set up to manage wholesale? Are you set up to sell direct to consumer? And if you are, is that something that you want to do in the future? Because just because you’re not set up now, doesn’t mean that you’re not going to be able to do that in in six months a year’s time. It may be that you want to get that logistical setup and that’s your three-year goal. But this is something that’s, that’s key that you should be thinking about when distinguishing the two. So, I’ve done a lot of talking there, which I’m good at doing, I must say in terms of giving those listeners a clear distinction between two models, which in all honesty is it can get a bit muddy and confusing when talking about selling on Amazon.

What additional tools do you get as a vendor on Amazon?

Augustas Kligys:
Thank you very much, Carina. It was a nice overview, but I have few questions. So, in the past vendors got additional tools which were not available in seller central, but now we know that sellers are getting more and more of the vendor, previously vendor, exclusive tools. Can you tell us what are now what are the tools which vendors are getting right now, which are not available for sellers.

Carina McCleod:
To be honest, the only key difference in terms of the tools are more promotions. So, you get access to what they call the best deals, which are like a two-week promotion that you don’t get within seller central, or you do as a seller. If you have an account manager, so you have to be a certain size, but what we’re finding is near enough, everything is now available. So, if we look at reviews, the Vine Review program has now moved over to seller, but in actual fact, you have to pay for Vine on vendor at the moment it’s free on seller. Now this happened as well years ago, with A Plus content you used to pay for A Plus content on vendor. It moved over to seller for free. And then everybody was like, well, I might as well setup a seller account, get my listing set up on seller. And that, you know, everybody’s going to find a loophole to avoid these fees, and then it became free. So, it’s interesting to all these different tools and it seemed to be available in the two. And also, if we look at advertising, so brand stores were always, only available for vendors. They became available for sellers, but also almost had an upgrade and was integrated more with advertising, sponsored brands, he old headline search ads, and now available and display ads and more and more so, so really there’s no reason why a business should decide to become a vendor for the tools. If that makes sense, because the tools are almost the same on both platforms, if not better on seller, because you don’t have to pay for them.

Does becoming a vendor boost your business?

Augustas Kligys:
All right. So, I know that a part of your client base are vendors and probably you saw some sellers transforming into vendors. When you are a vendor, Amazon takes care of your listing. So, in that, that means that they might make it worse, the whole listing, probably in some cases. So, you are losing control. So, have you seen cases where a seller’s transformed into vendor and their sales increased like their business really boosted.

Carina McCleod:
Yeah. We’ve seen both, to be honest, we’ve seen it where sellers have moved to vendor and their businesses increased more so, because I started to see these folk orders coming through. And as I say, bulk, I need to be careful with how I use that, because that could, people could imagine these huge, huge orders, but larger orders than they were receiving on seller. So, we’ve seen businesses actually prefer because that’s the model that they want. It’s more economical for them to ship in packs in that way, once a week to Amazon, as opposed to working on the seller side. So, we’ve seen that be effective for them. Often, it’s because they’ve already accelerated the business to a certain level on seller to just all of a sudden become a vendor without having any momentum on the platform is a challenge because Amazon has an automated ordering system and their ordering system is based on demand. If they can’t see demand or there’s nobody’s been looking at the listings previously or anything, it becomes a bit of a tough one because how do you get people to the listings if there’s no inventory and Amazon isn’t ordering inventory because they can’t see people going to the listings. So, Amazon does have initiatives on the vendor side, such as the Born to Run program. The Born to Run program is where you then say to Amazon, can you order X amount of inventory that covers 10 weeks of sales and Amazon, if they agree will order in that inventory. And if it sells great you’ve helped get that product available. 
But if it doesn’t, they’ll return the inventory. So, Amazon is aware of that challenge. So yeah, if you’ve got that momentum already, it can work. Now, we’ve seen it not work as well, where businesses have moved from seller to vendor and they’re sold the dream that get all their listing set up on vendor. Next minute, they know their product images have changed. Their titles have changed all these lovely optimized product pages from seller have completely changed. It becomes a headache because they’ve got to clean it all up and it takes time because if the system in the backend overriding other bits of data and you’ve got to then get the catalog team to override it, and this is a very common issue, which you do get there. We have got through those challenges with our clients, but during that period, that can impact sales as well. You know, because there’s this period where these product listings were doing so great, had lovely images and everything. And next minute, you’ve got a product image of a hand holding a box, like a gray hand and it just looks terrible. And I can never understand for the life of me, why Amazon still uses those images, but they do. So that’s when that requires work. And sometimes some sellers are like, is it worth all that work? Or do we revert back? So sometimes sellers that move to vendor have reverted back to seller almost a bit too quick because of that, that period. So, you’ve always need to make sure that you’ve got that backup strategy. If you are taking that jump over to vendor and aware that there could be an element of disruption. So, you would probably want to time that correctly or start vendor with new products or listings that aren’t already in seller. So, it might be multi-packs or, or just being a bit more creative to get familiar with the platform, as opposed to jumping completely into vendor. I would say be cautious about that because there are some repercussions of doing that.

What is the process for becoming a Seller and Vendor (hybrid) on Amazon?

Augustas Kligys:
So, talking about hybrid sellers what is the process? So basically, the seller has to wait for the invitation and then they decide what they sell on vendor?

Carina McCleod:
Yeah. So that’s the only point with vendor, is that vendor is invite only and vendor it’s like the Golden Gates become a bit more firmly shut these days where Amazon is a bit more selective on who they let in. And a lot of that goes back to what I was mentioning about as in, do you have a wholesale relationship? Are you selling to major retailers? Because if you’re not selling to major retailers in the UK, why would you want to be a vendor on Amazon? Or it probably doesn’t make sense. You’re not probably that size yet. So, they’d ask a lot of questions anyway. It may be that you reach out to them and they want that information. Or if they see your brand in many different places, not only performing well on Amazon seller, they might see it in other stores. They might then approach you and want to invite you to the platform. So, Amazon vendor can be sometimes a tough one, the amount of emails that we get on a weekly basis going, can you get me a vendor account? It’s interesting,

Augustas Kligys:
But your answer is you cannot, unless it’s invited, right?

Carina McCleod:
Yeah. You need an invite or no working with agencies or freelancers that have been working with Amazon that often have a direct connection with the business development team that might then be able to open up that conversation. It’s not to say it’s not about contacts necessarily. It’s just there is a team that are recruiting new vendors. You know, there’s a team that recruit new sellers. It’s whether or not you are on their list or would they want you on their list really? So sometimes you can sometimes reach out to them and they might be open to a conversation at least.

How much does your workload increase when you become a seller-vendor hybrid?

Augustas Kligys:
And talking about workload, let’s say someone gets invited and they decide to try the hybrid method. Is there a lot of like additional work to manage, comparing to just seller central?

Carina McCleod:
Yeah, definitely well you’re effectively, you’re managing two accounts. So, you then need to be monitoring two. Now monitoring vendor is different to monitoring seller because in seller you’re you need to monitor your seller feedback. Your buyer messages, those are things that you don’t have to do on vendor because you don’t have that connection with the end consumer. So that takes that away. But the, the part on vendor is just, there’s a lot more admin with receiving the purchase order, sending those purchase orders, making sure you send the shipment notifications, printing all the shipping labels out, raising invoices, the accounting. So, there’s quite a bit of administration needed on vendor. So, you definitely, if you’re already tight on resource on seller, then you need to question that on vendor because that’s you’re doubling basically the work involved.

Transcribed from the following video:

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