Sound familiar? Don’t worry; you’re not alone.
If you’ve experienced any of these issues, moving to a hybrid model by opening a Seller Central account might be the answer for your brand.
So, what’s the difference between Amazon Vendor and Seller?
Amazon Vendor (Wholesale Model)
If you operate under this model, you’re considered a first-party seller (or 1P). This is much like a wholesale relationship: Amazon purchases your product at a discount 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”. You’ll operate through Vendor Central.
Amazon Seller (DTC Model)
Under this model, you’re 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.
But it’s not all black and white. You can operate a hybrid model by operating under both models in parallel. It’s a model we often recommend here at This is Unicorn.
Why should I open a Seller Central account? What are the benefits for my brand?
Ensure Stock Availability At All Times
Amazon doesn’t always order as many products as you’d like them to. They base their purchase-order quantities on an algorithm, and it’s a bit of a chicken-and-egg situation.
The algorithm looks at previous sales history: if the product hasn’t had strong sales historically, then Amazon won’t order a large quantity. But the reason you haven’t demonstrated strong sales for the product is that Amazon hasn’t stocked enough units thus far. Right?
Now if you’re lucky enough to have a Vendor manager, you can ask them to place a manual order for you, but that’s only possible once or twice. And you might not even have a Vendor manager.
This is especially an issue when launching new products. Or when Amazon reduces the number of POs they’re issuing in non-essential categories, like they are right now.
Within Seller Central, you decide what to stock and how many to stock; you’re in full control of your stock and inventory levels.
By operating a hybrid model, you can ensure that when Amazon is out of stock, customers can still purchase your products through your Seller account. That means you can continue to show strong sales volume. In turn, this signals to Amazon to purchase more stock through your Vendor account, too.
Control Your Pricing
As a Vendor, you might notice the price shown to the Amazon consumer fluctuates. Sure, you can give Amazon your MSRP (Minimum Suggested Retail Price), but they don’t always heed it. It’s important to remember that Amazon as a retailer is a “Price Follower,” not a “Price Setter,” and prices are also set by algorithm.
Amazon wants to offer the product at the best price available in the market. So if your product is on sale at John Lewis, Amazon will drop their price to match. As soon as the sale ends, you should see your Amazon price return to the previous pricing. The same applies for your website. If you’re running a lower price on your website, then Amazon is likely to drop their price to match. Conversely, if the price for your product increases on your website, John Lewis, and all other channels, then Amazon will increase their price to match.
In Seller Central, you decide what price you want to sell your products at. This could lead to better margins for your products, as well, by cutting out the middleman (Amazon).
Get Better Customer Data
If you only have access to Retail Analytics Basic, you’ll know that you can’t view your Shipped COGs—the number of goods sold to customers within a specific time period, at the price Amazon purchased them—for more than the current time period and the last period.
Currently we’re in April, so you can only see the monthly data for April and March. Or now that we’re in a new quarter, you’ll only be able to see the current Quarter to date (Apr-Jul) and last quarter (Jan-Mar).
This can be pretty frustrating if you haven’t been downloading your data regularly, as you won’t be able to report further back than the last period.
Plus, there’s no additional data such as conversion rates, sessions, market-basket analysis, etc., to guide your Amazon strategy. Unless you have Premium Analytics, which usually comes at a premium price, you’re in the data-analysis dark.
By contrast, Amazon Sellers get access to better reporting and Brand Analytics. Not only can you report on revenue, conversion rates, and sessions by custom date period as far back as your Seller Central account has been open, but you also get access to improved demographic data on your customers, purchase behaviour, and basket analysis.
Speak Directly With Your Customer
You can add an extra layer of customer service when you’re using Seller Central. If a customer has a problem with a product, they’re able to reach you directly.
That’s great news for your brand. You can better support your customers and resolve any problems they may have. And that means more positive and fewer negative customer reviews.
There are lots of reasons why a Seller Central account is worth considering, but I get that this might sound daunting: it’s a new tool in your strategy, a new platform to manage, and it opens another customer-service channel.
You Don’t Have To Do This Alone
In fact, all of Seller Central might sound scary to you, even if it sounds like the right move for your brand. This is true especially for businesses who haven’t operated a DTC model before.
We’re here to help.
Our brand strategists at This is Unicorn will help you navigate the ins and outs of both platforms and put together a personalized strategy that suits your brand. We’ll ensure you avoid any pitfalls that arise and take advantage of everything a hybrid-model solution has to offer. Get in touch with us today to see how we can help you.