Amazon Vendor vs Seller vs Hybrid – Pros & Cons

Elise Jackson

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  • AUTHOR: Elise Jackson
  • CATEGORY: Amazon Brand Strategy
  • DATE: 13/05/2022

When it comes to selling, there is no one-size-fits-all approach and it’s always important to see which solution fits your needs. The same applies to Amazon and the different selling platforms it offers.

There are two types of Amazon selling platforms: Amazon Vendor Central and Amazon Seller Central. Each platform offers distinct benefits, and determining the most suitable one for your brand depends on your goals, size, strategy, available resources, performance on Amazon, and other relevant factors.

Often, some brands that operate via Vendor Central may miss certain aspects of the Seller Central platform and opt for a hybrid approach.

So, what are the different platforms, how do you get invited to become an Amazon Vendor and what is the hybrid approach? Well, let’s get into all of that now!

What is Amazon Vendor Central?

Screenshot from Amazon’s Vendor Central

Screenshot from Amazon’s Vendor Central

 

Brands that operate under this model are considered first-party sellers (or 1P). This is much like a wholesale relationship whereby Amazon purchases your product at a wholesale price via Purchase Order, and then sells the product to the consumer on your behalf.

Products sold through this model are “Sold and Fulfilled by Amazon”.

 

How do you get invited to Amazon Vendor Central?

Great question with a not-so-easy answer. The jist of it is: you have to make Amazon want you to be on there.

Amazon employs a global vendor recruitment team that actively seeks out new brands and products to feature on their platform. These recruiters typically focus on sellers with high sales performance on Seller Central, popular products in the marketplace, and intriguing products showcased at trade shows and fairs. If Amazon shows interest in your offerings, you will receive an email invitation, explaining the process and terms of doing business. Upon agreement, you’ll be granted access to a Vendor Central account, enabling you to directly supply your products to Amazon.

Amazon Vendor Seller Pros

  • Higher algorithm prioritisation
    It might come as no surprise but the Amazon algorithm tends to prioritise itself in the search result!
  • Greater chance of winning the Buy Box
    When several sellers are on a listing, Amazon tends to win the Buy Box.
    Wondering what Buy Box is? It’s the “Buy Now” button on the side of product listings that allows users to click buy now and make instant purchases.
  • No customer service is necessary
    Amazon controls all customer messages and complaints so the load is taken off you.
  • Amazon brand trust
    Customers can be more likely to buy from Amazon directly than from a seller.
  • Avoid Fees
    Vendors avoid typical Amazon seller fees, which include costs for referrals, fulfilment or storage (however, watch out for Amazon Vendor rebate fees!)

Amazon Vendor Seller Cons

  • Limited Brand control
    The brand or wholesaler is unable to directly contact consumers if there is a quality control issue or to prevent a negative experience, which is essential for customer care and happiness.
  • No pricing control
    Amazon has complete control over product pricing. Although the brand can set an RRP for consumers, Amazon will not always follow it, and will match the lowest price available in the market (not just on Amazon). It is also very difficult to implement wholesale price increases.
  • No stock control
    The brand or wholesaler has no control over how much stock Amazon has at any given moment or how large their POs will be.
  • Amazon makes the rules
    Amazon has Chargeback & Shortage fines and can withhold POs if negotiation terms are not agreed favourably. Amazon can also end their Vendor agreement at any time with no notice which can make it hard to plan effectively.
  • Difficult to update the catalogue
    Brands must apply to sell new products and can not control how much or if Amazon will buy.
  • Challenges in Negotiating Contract Terms with Amazon
    When engaging with Amazon as a Vendor Central partner, one notable challenge lies in the limited control over determining vendor fees. These fees encompass various aspects such as damage allowance, freight allowance, coop activities, and others, which are typically agreed upon during the initial contract negotiation. While these vendor fees can potentially affect profit margins, it is essential to recognize that they may also offer certain advantages in specific scenarios, making their impact on profit margins not as heavy as initially perceived.

 

What is an Amazon Seller Central?

Screenshot from Amazon’s Seller Central
Screenshot from Amazon’s Seller Central

 

Under this model, your brand is considered a third-party seller (or 3P). This is a direct-to-consumer relationship; you sell your products directly to customers and pay Amazon a referral fee for the privilege of selling on their platform.

Through Seller Central, you’re able to control what products you stock and sell on the platform, your inventory levels, and your pricing. Take a look at the pros and cons and see if this is the right platform for you.

 

Amazon Seller Central Pros

  • Increased Brand control
    The brand has direct contact with its Amazon customers. Brands can email customers after purchases to follow up and ensure they’ve had a positive experience thereby increasing the number of positive customer reviews. It is also easier to perform listing optimisation.
  • Complete pricing control
    You have control over the price being offered to consumers and can change this whenever needed without stress.
  • Complete stock control
    You can choose how much of each product will be available and ensure shipment is up to quality standards.
  • Easy to add new products
    Adding new products to the catalogue is quick and easy.
  • Better Analytics
    Get access to more detailed analytics on the back end so you can make smart decisions on areas of improvement and what is working! (e.g. buy box percentage)

 

 

Amazon Seller Central Cons

  • Less brand trust
    It’s not a complete loss of trust, but customers can be more likely to buy from Amazon directly than from a seller. However, if Amazon is not on a listing the buyer is most likely to buy from the brand directly.
  • Lower algorithm prioritisation
    The Amazon algorithm tends to prioritise itself in the search results – once again this is only relevant if Amazon is on the listing!
  • Lower chance of winning the Buy Box
    When several sellers are on a listing, Amazon tends to prefer the brand owner unless a distributor has a lower price.
  • Complete stock and customer service responsibility
    The seller is responsible for shipping items – this stress can be reduced by using FBA and also responding to all customer messages and complaints.

 

What is a Hybrid Approach to Selling on Amazon?

This is applicable to those who have access to both platforms and if you do then the hybrid approach is what we often recommend at This is Unicorn.

It allows a seller to maintain hands-on control of a Seller Central channel while reaping the logistical advantages of a Vendor Central channel.

 

Amazon Hybrid Selling Advantages

  • Maximize sales opportunity
    Offering some products via a Seller account and others via a Vendor account creates the most selection for customers for the highest sales opportunity
  • Spread your risk
    If Amazon suspends the account on one side, there is still business on the other to fall back on.
  • Access to all tools
    Access to the full range of marketing, merchandising, and promotional tools that Amazon has to offer.

 

Our thoughts

We’ve delved into the world of Amazon selling platforms, covering two well-known options: Amazon Vendor Central and Amazon Seller Central, as well as a third approach known as the Hybrid approach. Each of these platforms offers its own set of advantages, making it essential to take a thoughtful approach when deciding which one aligns best with your brand. Evaluating your goals, size, strategy, available resources, performance on Amazon, and other relevant factors will be crucial in making the right choice for your business.

New to the platform? You may find helpful our “Where to focus as a new brand on Amazon?” article.

Need some help?

Want to shoot for the stars and optimize your Amazon strategy? Our brand strategists can help you develop a strategy that will not only help you sell more but get the attention of Amazon, just send us a message or give us a call!

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