So you want to sell on Amazon, but should you use Amazon Vendor Central or Amazon Seller Central? Did you know there’s actually three different ways to sell on Amazon? Each method is unique as to how you sell the products and how the products are fulfilled. Not to mention that two of the methods use one type of Amazon seller interface while the third uses its own.
Before you jump in and become an Amazon seller, it’s best you determine which of these three methods is right for you and your business. You might also find yourself starting with one method, then switching to another down the line. Or perhaps even using all three?
Regardless, this guide will show you what each method means for you, as the seller, and for your customers. Then, it will break down the pros and cons of each method. And finally, it will show you how to get started with each method.
What are the three ways to sell products on Amazon?
Let’s say you wanted to find a travel bag on Amazon. There’s tens of thousands of results, of course. And to the untrained eye, it might look like they’re all coming straight from Amazon. Yet looks can be deceiving.
Take a look below:
All three of these bags are right next to each other in the Amazon search page results. And, believe it or not, all three bags are sold different ways by third party vendors.
- The first bag is sold to then fulfilled by Amazon.
- The second bag is sold by and fulfilled by a third party vendor.
- And the third bag is sold by a third party vendor but fulfilled by Amazon.
But how can I tell which products are sold and fulfilled by whom?
The easiest way to tell is to simply click on each individual product page and look just below the “In Stock” badge.
Check out the three different listings:
Another quick way to see the seller type for each listing is to use the Jungle Scout Chrome Extension Pro. In the Seller column, you can see that each product is AMZ, FBM, and then FBA respectively.
Check it out:
The three ways to sell products on Amazon:
- Amazon Sold/Fulfilled (AMZ). In this instance, you sell your products directly to Amazon at wholesale prices. Amazon then creates a listing for your product, prices it, and handles the inventory. Your orders are managed through Amazon Vendor Central.
- Fulfilled-by-Merchant (FBM). With this method, you list your products on Amazon and once a sale is made, you fulfill it as well. Your orders are managed through Amazon Seller Central.
- Fulfilled-by-Amazon (FBA). Finally, you list your products on Amazon just like an FBM seller, but the actual orders are fulfilled by Amazon. Your orders are through Amazon Seller Central.
Each selling method has its own benefits and drawbacks. Therefore, it’s important to understand the differences between each method. Ultimately, the way you choose to sell your products on Amazon is up to you. And ideally, the one you choose will be the method that works best for you and your business.
Let’s review the key differences, pros, and cons of each selling method.
The Key Difference: Selling Through Amazon vs Selling To Amazon
Of the three methods of selling products on Amazon, two methods (FBM and FBA) involve listing your own products and making sales through Amazon. So, you’re selling through Amazon rather than to Amazon. You have complete control over the inventory. The major difference between those two methods are in how the products are fulfilled. FBM sellers store and fulfill their own inventory. Meanwhile, FBA sellers keep their inventory at Amazon fulfillment centers. Then, when a sale is made, Amazon picks, packs, and ships your product on your behalf.
The third method (AMZ) involves actually selling your products directly to Amazon at a wholesale rate. Instead of having your own customers who are–in a roundabout way, mind you–buying from you as they would with FBM or FBA, Amazon is actually your customer. They’re the one placing the order, often for a large volume of inventory.
Amazon Seller Central vs Amazon Vendor Central
Another thing to note about selling FBM or FBA vs selling to Amazon (AMZ) is the seller interface changes depending on your method. FBM and FBA sellers use Amazon Seller Central to manage their Amazon sales and listings.
Meanwhile, AMZ sellers use Amazon Vendor Central to manage their Amazon sales and listings.
This section breaks down the differences between selling with Amazon Seller Central or selling with Amazon Vendor Central.
Benefits of Selling with Amazon Seller Central
For Amazon Seller Central sellers (FBM or FBA), there’s a few major benefits to consider.
Higher Profit Margins
When you sell your products directly to Amazon as an Amazon Vendor Central seller, you sell them at a wholesale discount. That way, Amazon can mark up your product and earn profit. This means that you could be selling your product to Amazon for as low as 20-40% of the final sales price. Then, after sales are made, any remaining profits are pocketed by Amazon.
On the other hand, by selling your own products, regardless of whether you fulfill yourself or through Amazon, you take all the profit. Amazon only takes their referral fees, any variable fees, and FBA fees (if they’re the ones fulfilling your product).
As an Amazon Vendor Central seller selling your own product, other than a few details, images, and some minor copy writing, Amazon has full control of your listing. So if they feel they need to make changes to your product, they will do so.
Meanwhile, as an Amazon Seller Central seller, you’re free to change any of your product’s details you see fit. This helps you position your product more effectively and potentially get more clicks and buys.
Amazon Seller Central offers sellers a ton of reports that are extremely helpful for managing an Amazon business Many of these reports are unavailable to Amazon Vendor Central sellers. Here’s just a few of the reports that you can run through Amazon Seller Central:
- Business reports with 8 sub-reports. All of these reports are fully customizable.
- Advertising reports to see how well particular advertising campaigns are doing.
- Performance reports to help you as a seller and/or fulfiller.
- Inventory reports to forecast demand and plan future supplier orders.
Open to More Sellers
Perhaps the biggest advantage of Amazon Seller Central is that as long as you’re from a country that’s allowed to sell on Amazon and you have all of your ducks in a row (bank account, DBA, etc.) you don’t need an invitation to start selling. All you need to do is create an account, list a product, and wait. Inversely, Amazon Vendor Central is by invitation only.
When you’re an Amazon Seller Central seller, you’re paid every other Wednesday. This is great for a business just starting, as cash flow might be thin. But as an Amazon Vendor Central seller, you are only paid when Amazon places an order. This could be 30-90 days or more.
Benefits of Amazon Vendor Central
Amazon Vendor Central comes with its own benefits, too. But you’ll quickly notice it’s a very different method of selling products on Amazon.
Distribution Model vs Retail Model
The chief difference between being an Amazon Vendor Central seller and an Amazon Seller Central seller is the business model and supply chain approach. As an Amazon Vendor Central seller, you are more or less using Amazon as a distribution channel. Instead of handling one-by-one sales, you are selling larger quantities of your products directly to Amazon. This takes a lot of the burden of marketing and sales management off your hands.
Amazon Vine Program
As an Amazon Vendor Central seller, you have access to Amazon’s Vine program. Amazon Vine invites the most trusted reviewers on Amazon to post opinions about new and pre-release items to help their fellow customers make informed purchase decisions. This is a great jump off point for sellers with new products as it helps you get those much-coveted early reviews.
Hands-Free Inventory Management
Much like Amazon FBA sellers, Amazon Vendor Central sellers send all of their inventory to Amazon. From there, Amazon stores your products, handles orders, and provides customer service all on your behalf.
Sold and Fulfilled by Amazon
It might not seem like that big of deal, but Amazon Vendor Central sellers have the honor of being sold and fulfilled by Amazon. And their product pages show it (just as in the image above). Remember: Amazon’s spent nearly 25 years building up market trust. So when a savvy buyer jumps on Amazon to make a purchase, they’re much more likely to buy from the world’s largest online retail store than some business they’ve never heard of.
More Marketing Tools
Amazon Vendor Central sellers have full access to Amazon’s complete line of marketing tools including Headline Search Ads, Product Display Ads, and Sponsored Search Ads. As an Amazon Seller Central seller you may need to have a brand registered product to gain access to some of those tools.
Now that you know the difference between Amazon Seller Central and Amazon Vendor Central, here’s how you can get started with either or both programs.
How to Start with Amazon Seller Central
Getting started with Amazon Seller Central is super simple!
- Have the following information ready:
- Business name and address.
- Mobile or telephone number.
- Chargeable credit card and valid bank account.
- Tax information.
- Open your browser and go to https://sellercentral.amazon.com
- Click the Register Now button.
- Click the Start Selling button.
- Note: this will set you up as a professional seller and comes with a $39.99 per month subscription fee. If you wish to avoid the subscription fee, but have a flat fee per sale, you can become an individual seller. To become an individual seller scroll down on this page and select the link that reads “Sign up to become an individual seller.”
- Enter your email and the password you want to use for your Amazon seller account. Then select next.
- Using the information you prepared in step 1, enter in all of you and your business’s details.
And that’s it! Once your done, you can start listing products on Amazon.
How to Start with Amazon Vendor Central
Amazon Vendor Central is by invitation only. This means, that you probably need to be an established seller already selling on Amazon or a major brand. Once you receive an invitation, Amazon’s account representatives will assist you with the registration process.
For more information on Amazon Vendor Central, check out Amazon’s FAQ.
Now that you understand the differences between the different types of Amazon sellers as well as the difference between Amazon Vendor Central and Amazon Seller Central, it’s time to make a big decision. Which type of seller are you? It’s not an easy question to answer. If you have any questions, please leave them in the comments section and we will be happy to assist you.