What’s the difference between an Amazon Vendor and an Amazon Seller?

Let’s get an understanding of what both are so you can see if you would like to consider one of them.

An Amazon Vendor uses the 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.

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

An Amazon Seller uses a Direct-to-Consumer 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.

For a more in-depth look, here’s a guide on the pro’s and con’s of both models.

As an Amazon Vendor, why consider opening a Seller Central account?

To understand why you might want to consider adding elements of the Seller Central model, let’s first look at the disadvantages of having a Vendor account:

• Limited brand control
  If you are a brand or a wholesaler you are unable to directly contact consumers if there is a quality control issue or to prevent a negative experience, which is a key component 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 its 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 you cannot 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.

Here are the reasons you should consider switching to Amazon Seller Central.

So, based on the above here are some of the reasons why you may want to consider switching to an Amazon Seller Central account completely or use a hybrid approach.

1. You can 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. There is the oiption to set a Bor to Run offer. This programme allows Vendors to request orders by telling Amazon how many units they expect to sell in 10 weeks. Amazon can approve or decline the request but if there isn’t any issue they can typically accept it. However, ball is in their court.

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. Reviews are important when launching a new product and to enroll in the Amazon Vine programme – which gets you faster reviews – and if you’re a vendor its £1000 to enrol vs only £140 if you’re on Sellar Central.

Also, 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.

2. You can 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).

3. Glean better customer data

Reporting on the Amazon Vendor’s is very limited – there’s no additional data such as conversion rates, sessions, market-basket analysis, etc., to guide your Amazon strategy. You can only check shipped revenue, which makes it harder to analyse sales like after Black Friday. This is because products are only shipped a few days later, the sales for Prime Day are spread on the following week, which doesn’t allow analysing the performance of promotions effectively.

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 (US only) on your customers, purchase behaviour, and basket analysis (available if you’re on the Brand Registry)

4. Speak directly with your customers

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.

Our thoughts

There are lots of reasons why a Seller Central account is worth considering, but think of it as a new tool in your strategy.

Considering a hybrid approach might be a viable option for you if you love a lot of the features being an Amazon Vendor gives you. Switching to hybrid allows you to reap the logistical benefits of the Vendor Central channel while having the hands-on control of Sellar Central.

Or you may be just totally over the Amazon Vendor Central model then switching completely to the Sellar Central model would be the right move for you.

Want to get a little more detail before you do that? Our team of Amazon experts have helped hundreds of businesses to navigate Amazon and are on hand to answer any questions. Just send us a message or book a call.