When it comes to selling on Amazon, choosing the right platform can make all the difference. This decision often boils down to Vendor Central vs Seller Central, each offering distinct features tailored to different business models and goals. Each platform has unique benefits but also comes with challenges, so if you're uncertain about which platform to choose, you're not alone. This guide is designed to help you navigate the complexities of these two systems, enabling you to make an informed choice for your business.
Quick Comparison of Seller Central and Vendor Central
Read on to have an in-depth view of each and understand which one is right for you.
What is Amazon Seller Central?
Amazon Seller Central, also referred to as the 3P (third-party) model, is a setup where you operate as the retailer, and Amazon provides the marketplace platform. In this model, you have complete control over setting your product prices, while Amazon charges a transaction fee to facilitate the sales. If you choose to use the Fulfilled by Amazon (FBA) program, additional charges apply for storage, as well as for picking, packing, and shipping from Amazon's fulfillment centers (FCs).
There are two main fulfillment options under Seller Central:
1. Fulfilled by Amazon (FBA):
In this program, you send your products to Amazon’s warehouses, and they handle the entire fulfillment process—including shipping the product to the customer, customer support, returns, and refunds. A significant advantage of FBA is the Amazon Prime tag, which is highly sought after by customers. Over 60% of Amazon users search exclusively for Prime-eligible items, and Prime members typically spend more than non-members.
2. Fulfilled by Merchant (FBM):
With FBM, you are responsible for shipping the products directly to the customer as orders come in. You manage customer service, returns, refunds, and the packing and shipping process yourself. FBM items do not carry the Prime badge unless you qualify for special programs like Seller Fulfilled Prime (SFP).
Benefits and Drawbacks of Using Amazon Seller Central
To help increase your profits by leveraging the programs Amazon Seller Central offers, here’s another blog - how to use Amazon Seller Central FBA Small and Light program by our expert Amazon account managers! Check this out!
What is Amazon Vendor Central?
Amazon Vendor Central or the 1P model is an invite-only model, where Amazon orders the products from you in bulk at a cost price, and Amazon sells the item to the end customers at a competitive price (not always at MSRP/List Price).
Amazon offers 3 programs as part of Vendor Central.
1. In Network – In this, Amazon sends Purchase Orders (PO) weekly and you would have to ship the items to Amazon FC and they will take care of the shipping to the end customer. You have the option of 2 shipping arrangements — Collect, where Amazon is responsible for the shipment pick up and Pre-paid, where you are responsible for the shipment to get to the Amazon Fulfillment Centers.
2. Dropship – Amazon will use your warehouse as an additional warehouse and will route customer orders to you for pick and Pack, shipping is taken care of by Amazon.
3. Direct Import – Amazon will pick up the item from the port of delivery, they take care of international transportation, customs, and Import Duties.
Benefits and Drawbacks of Using Amazon Vendor Central
Costs and Expenses Involved in Vendor Central
- Standard Agreements
Vendors are subject to agreements that often include MDF (CoOp fees), freight charges, and damage allowances. - Shortage Claims
Lost inventory can lead to penalty charges from Amazon. - Chargebacks
Failing to follow Amazon’s strict guidelines can result in various chargebacks. - Limited Flexibility in Pricing
There’s little control over retail pricing, as Amazon dictates final prices on Vendor Central.
Key Differences Between Seller Central and Vendor Central
When debating Vendor Central vs Seller Central, understanding the key differences can clarify which option aligns best with your business goals. Here’s a breakdown of the most important differences:
Pricing Control
- Seller Central Pricing: You have the autonomy to set and change your pricing. This allows you to strategically price your products based on competition and market demand.
- Vendor Central Pricing: Amazon determines the retail price, which means you have no control over discounts or pricing strategies.
Amazon Vine Enrolment Fees
- Enrolment Fees on SC: On Seller Central, the maximum enrolment fee for Amazon Vine is only $200 (11-30 units) but with tiered options of 0 (1-2 units) fee and $75 (3-10 units).
- Enrolment Fees on VC: On Vendor Central, the enrolment fee for Amazon Vine is $1750.
Check out our detailed guide on Amazon Vine to learn more about the pricing and everything you need to get stellar customer reviews for your Amazon listings.
Fulfillment Options
1. Fulfillment by Amazon (FBA):
If you choose Seller Central, you can utilize FBA, where Amazon handles storage, shipping, customer service, and returns. This is beneficial for sellers looking to scale quickly.
New Fulfillment Options with Amazon Warehousing & Distribution (AWD):
Amazon’s Warehousing & Distribution (AWD) program is a recent addition for Seller Central, offering brands the ability to store inventory closer to high-demand areas. AWD provides flexible storage solutions that reduce fulfillment time and shipping costs, allowing brands to improve delivery speed while lowering inventory holding costs.
Advantages
By strategically pre-positioning inventory through AWD, brands can reduce lead times, offer faster delivery, and ultimately enhance the customer experience. This is especially beneficial during peak sales periods or high-demand seasons. AWD’s pay-as-you-go model allows for greater flexibility than traditional storage options, making it ideal for brands with fluctuating inventory needs.
Case Study:
One of our brands preparing for holiday demand started to use AWD to pre-stock popular items in high-demand regions, reducing the risk of stockouts and ensuring Prime-eligible fast delivery times. This proactive approach to inventory placement can lead to increased sales and customer satisfaction.
2. Vendor Central Fulfillment:
In Vendor Central, Amazon controls the fulfillment process. You may have options like dropshipping or direct importing, but you're limited in how you manage inventory.
Brand Control and Customer Interaction
- Customer Interactions: With Seller Central, you can directly communicate with your customers, offering personalized service and engaging feedback.
- Branding Flexibility: Seller Central allows for extensive branding opportunities. In contrast, Vendor Central provides less flexibility, as you are selling your products to Amazon rather than directly to customers.
Premium A+ Page Option
Unlike Vendor Central, Amazon Seller Central has a Premium A+ Page feature that allows brands with established content to unlock additional modules, providing more options for enhanced visual storytelling. To access Premium A+ Pages, brands must have a Brand Story and five approved regular A+ pages.
Advantages:
Premium A+ content includes unique modules such as interactive hover effects, enhanced video options, and richer layouts. This advanced content format can greatly increase customer engagement and conversion rates by creating an immersive brand experience. It’s an excellent way for brands to showcase their identity and reinforce customer trust with more dynamic and attractive product detail pages. Learn more from our detailed A+ page guide.
Advanced Analytics and Customer Insights (Seller Central)
Unlike Vendor Central, Amazon Seller Central offers access to advanced tools like Brand Analytics and Amazon Customer Engagement (ACE), providing rich data on search terms, customer demographics, and purchasing behavior. These insights help brands understand who their customers are and how they shop, which is vital for optimizing listings, product placement, and promotional strategies.
Advantage:
With detailed analytics and insights, Seller Central brands can make data-driven decisions, from keyword targeting to product bundling strategies. By leveraging this information, brands can improve product visibility, tailor advertising strategies, and create more effective content. This customer-centric approach gives Seller Central sellers a significant advantage in responding to market demands quickly.
Suggested Details:
Sellers can use Brand Analytics to identify high-ranking search terms, assess keyword performance, and fine-tune product descriptions based on popular customer queries. ACE further allows brands to communicate with followers and build brand loyalty, fostering a closer connection with their customer base.
Brand Tailored Promotions (Seller Central)
Brand Tailored Promotions in Seller Central enable brands to create customized promotions that target specific customer segments. This feature allows you to reach customers based on criteria like past purchases, engagement level, or spending patterns, providing a way to re-engage or reward loyal customers. Here’s an image for ease of understanding.
Advantage:
By tailoring promotions to particular customer segments, brands can foster greater loyalty and drive repeat purchases. Unlike general discounting, these targeted promotions let you personalize offers that resonate with specific buyer profiles, potentially increasing conversion rates and reducing promotional costs.
Use Case:
For example, a fishing or diving brand could offer targeted discounts during the off-season to encourage brand loyalists to continue purchasing. This type of promotion helps maintain steady sales and strengthens customer relationships year-round. Similarly, incentivizing regular customers through exclusive discounts can encourage additional purchases and foster long-term loyalty.
Which Platform is Right for Your Business?
The decision of whether to choose Seller Central or Vendor Central ultimately hinges on your business goals, resources, and growth strategy. Here’s how to evaluate your options:
When to Choose Seller Central
- Startups: If you are a new seller looking to establish your brand without the need for large orders, Seller Central is likely the better option. It allows for flexibility in branding and pricing.
- Control Over Margins: If maintaining margins is critical to your business model, Seller Central allows you to set prices that reflect your costs and desired profits.
- Branding Flexibility: If building a brand identity and customer relationships is essential to your strategy, you’ll appreciate the control Seller Central offers.
When to Choose Vendor Central
- Large Orders: If your production capacity aligns with bulk orders and you can meet Amazon’s requirements, Vendor Central may be a viable choice. It can provide stable revenue from guaranteed orders.
- Minimal Operational Involvement: If you want to reduce the operational burdens associated with managing customer service and fulfillment, Vendor Central may be preferable.
- Aiming for Credibility: If you believe that being associated with Amazon as a first-party seller will enhance your brand’s credibility and sales, Vendor Central can offer that advantage.
Hybrid Selling: Combining Both Platforms
Many businesses are now considering hybrid selling, a model that combines both Seller Central and Vendor Central. This approach offers the flexibility and scale needed to maximize reach while capitalizing on the benefits of both platforms.
SalesDuo is a great advocate of this Hybrid model and here’s why -
1. Cost Increases and Agreements:
Cost increases on Vendor Central are one of the most common challenges our customers face. Margins can become much thinner due to higher MDF (Co-Op) agreements.
The hybrid model allows businesses to manage margins more effectively. If Vendor Central agreements reduce profitability, businesses can shift products to Seller Central where they have greater control.
2. Amazon Purchase Order Model:
Amazon typically only orders items that have high glance views, strong purchase rates, and good profitability for Amazon. This makes it challenging to launch new products on Vendor Central. By maintaining a presence on both platforms, businesses can mitigate the risks associated with Amazon’s selective ordering process.
3. MAP Adherence:
For brands concerned about minimum advertised price (MAP) compliance, Seller Central provides a better environment to manage pricing strategies.
4. Chargebacks:
Amazon has strict processes regarding standard procedures during various stages, from order acceptance to packaging, meeting deadlines, and receiving shipments. If your internal processes aren't efficient, chargebacks can significantly cut into your margins.
In Seller Central, the most common chargeback occurs when you send an oversized or overweight carton. However, you can avoid many other chargebacks related to late shipments (only in FBA) and packaging requirements, such as Ships in Own Container (SIOC) for larger items.
A hybrid approach allows businesses to diversify their risk. If chargebacks impact Vendor Central sales, maintaining a robust Seller Central presence can provide alternative revenue streams.
5. Shortage Claims
A frequent issue on Vendor Central is the percentage of shortages that Amazon claims for your shipments. While there is a theoretical process for disputing these claims, proving that a specific number of units were sent to Amazon is nearly impossible unless you have a video recording.
In Seller Central, the percentage of shortages claimed by Amazon is noticeably lower. We've often wondered why the receiving process for Seller Central shipments is more efficient than that for Vendor Central orders. Hence by having a presence on both SC and VC, businesses can operate seamlessly.
Conclusion
Deciding between Amazon Vendor Central and Seller Central comes down to your business goals, operational strengths, and market strategy. Each platform offers unique benefits, and a hybrid approach—utilizing both—can help you maximize their potential. As an Amazon agency, SalesDuo brings expert insights and proprietary AI tools to simplify these decisions, ensuring your strategy aligns with long-term growth objectives. Schedule a consultation today to discover the best approach for your Amazon success.
Frequently Asked Questions
About the Author
Giridhara Prasad is an Associate Director at SalesDuo and a startup enthusiast. With extensive expertise in e-commerce, this ex-Amazonian has been instrumental in driving success for businesses worldwide. Apart from his passion for creating innovative sales strategies and optimizing online retail experiences, Giri finds interest in watching and playing sports, including starting to play pickleball, traveling, and exploring political science and philosophy.
