Amazon Vendor vs Seller Central; Should You Make the Switch?

There's no shortage of ways to sell products on Amazon, and at some point, some sellers have the opportunity to decide between being an Amazon Vendor vs Seller. The primary difference between both options is whether you sell your products directly to buyers or Amazon buys your products and sells them to marketplace customers. This article explains the difference between seller and vendor on Amazon so that you can determine which option is best for your company.

difference between seller and vendor central on Amazon

1. What is the Difference Between Amazon Seller Central and Amazon Vendor Central?

As a vendor, Amazon buys your products directly from you and resells them to marketplace customers. Alternatively, as a merchant seller, you list products on Amazon.com, and shoppers purchase items directly from your business. Let's discuss the pros and cons of both of these options and learn how they can impact your company.

What is Amazon Seller Central?

What is Amazon seller central?

When speaking about the difference between seller and vendor on Amazon, it's hard to ignore the most significant differences between the two fulfillment options—the platform interfaces. 

But what is Amazon Seller Central exactly? When merchants log in to Amazon, they access Amazon Seller Central to sell products directly to consumers. This interface is different than Amazon Vendor Central in several ways.

Amazon refers to merchants that have an Amazon Seller Central account as third-party sellers. As a third-party seller, it's the seller's responsibility to create, manage, and maintain their seller account. You can use inventory reports in Amazon's seller central to help you manage some aspects of your business.

There are two types of seller accounts for third-party sellers. Sellers can register as individual sellers, which is for those just beginning on the platform. While there's no monthly fee to become an individual seller, they'll pay a set fee amount whenever they sell items on the marketplace.

There's also a professional seller account, which, unlike the individual seller account, requires an ongoing monthly subscription. Professional sellers are for those who expect to sell more products each month than individual sellers. They can also access analytic tools, marketing programs, and other features that help scale an eCommerce business using an Amazon sales channel.

What are your fulfillment options as a third-party Amazon merchant?

Sellers that decide to become third-party merchants have several ways to fulfill orders. They can either opt for seller-fulfillment through the Fulfilled by Merchant (FBM) option or have Amazon fulfill orders through the Fulfillment by Amazon (FBA). Later on, in this article, we'll discuss how to register for either program, so let's discuss the reasons why sellers decide to handle fulfillment themselves or utilize Amazon's services for sellers.

Fulfillment by Merchant - when does FBM make sense?

If you want more control over the shipping and handling processes, customer service, returns, and inventory management, then the FBM program makes the most sense. You have the option to perform all these tasks yourself or rely on a third-party logistics company to complete these tasks for your business.

The main benefit is that you likely won't pay as much persistent storage, shipping, and packaging fees as you will as an FBA seller. However, as an FBM seller, you can manage many processes that will require resources as you scale, such as handling customer service requests while your business grows.

Fulfillment by Amazon - why should you use the FBA program?

Fulfillment by Amazon - why should you use the FBA program?

Your second option is to use the FBA program to fulfill orders for your customers. Amazon sees the FBA program as the gold standard for packing, shipping, warehousing, and customer service. There are also additional perks as an FBA seller, such as the ability to sell products in the Prime 2-day shipping program, listing your brand name on Amazon order pages, and earning higher organic listing product placements.

As a merchant that sells using the FBA program, expect to pay several FBA fulfillment fees. The exact amount you pay per sale depends on the product types you offer, inventory size tiers, shipping weights, and several other factors. There are also monthly storage fees and other cost considerations, so if you're looking to save money as an Amazon merchant, you might want to consider the FBM program. However, the costs of the FBA and the ability for your company to scale often outweigh the costs.

What is Vendor Central?

What is Amazon vendor central?

Now that you understand Amazon Seller Central, it's time to speak about another way to sell your products on Amazon with a Vendor Central account. It's understandable that not every business wants to deal with customers, fulfill orders, and shipping products to individuals. Amazon Vendor Central provides a solution by allowing direct manufacturers and distributors to sell to customers through Amazon without dealing with customers first-hand.

Amazon considers Vendor Central sellers to be first-party sellers rather than third-party sellers. Therefore, you supply products directly to Amazon in bulk, and they manage sales to their customers.

Often, businesses start on Amazon as third-party sellers and start generating their first sales on the platform. As these businesses grow, Amazon notices the demand for its products and extends an invite to their Vendor Seller program. Because registering a Vendor Central account is by invite only, most sellers will begin as third-party sellers. Exclusivity is a significant difference between sellers and vendors on Amazon.

After switching from a seller to a vendor, these businesses will sell products in bulk directly to Amazon. Most other companies like BestBuy and Target similarly work with direct manufacturers. Unlike third-party sellers, vendors' names do not appear on Amazon order pages. Instead, customers will see the term "ships from and sold by Amazon" whenever they purchase an item Amazon buys from vendors.

Amazon Vendor vs Seller Central

So now that you understand the difference between seller and vendor on Amazon, we should compare both options, so you know exactly which one makes more sense for your business. Here's a glance comparison between Amazon Vendor vs Seller Central programs.

Amazon Seller Central Benefits:

  • Anyone can start an individual or professional seller account.
  • You have complete control over selling to Amazon's customers.
  • Sell items yourself or with a third-party fulfillment partner.
  • Your brand controls the pricing of your products.
  • Register your brand into the Brand Registry Program to access A+ content.
  • Access several Amazon Advertising options for merchants and brands.

Amazon Vendor Central Benefits:

  • The program is exclusively by invite only by Amazon.
  • Vendors can sell directly to Amazon instead of dealing with direct-to-customer sales.
  • Vendors don't have as many fulfillment challenges since they bulk sell products to Amazon.
  • Fewer payment challenges since there are standard payment terms.
  • Amazon sets pricing controls.
  • Have access to a complete collection of Amazon Advertising options.
  • Use the conventional sales process and build product listings with A+ content.

There's a lot to both ways of selling on Amazon, and there are benefits and downsides to both. Now that you know Amazon Seller Central benefits, how do you make a decision between both programs? Providing the basic information often isn't enough to make a clear decision, so let's discuss what you should know before making a switch to vendor or seller.

2. Should I switch from Amazon Vendor Central to Seller Central?

Does it make sense for your business to be an Amazon merchant or vendor? The answer? It depends! Understanding the benefits and challenges of both programs will make a choice easier. Here's what to know about Amazon Vendor and Seller Central before making a switch.

What are the benefits and challenges of Amazon Vendor Central?

As a vendor, you receive predictable cash flow with standard financial terms. However, you give up the ability to set your prices. Yet, as a vendor, there's a lot less your business must handle, such as fulfillment and customer service. If you want to focus on producing products and prefer not to take all the steps to sell on Amazon, becoming a vendor will free up your time and streamline the selling process.

Amazon Seller Central Benefits and Challenges

If you prefer to use Amazon as a sales channel where you direct everything about how you sell and what price, then you'll enjoy Amazon Seller Central more. Your business will handle customer service, complaints, fulfillment, and other selling processes on Amazon. However, the market will determine your sales results. You'll work with many customers instead of one major customer (being Amazon,) and there's a lot to learn about successful selling on the marketplace.

3. How do I create an account in Amazon's Seller Central?

Creating an account in Amazon's Seller Central

As a new seller on Amazon, account creation is the vital first step to selling products on the leading eCommerce marketplace. Here's everything you should know about creating an Amazon Seller Central account, including the information you should collect before beginning the process.

Information to collect before registering as an Amazon Seller

The nice thing about writing as a seller on Amazon is that you can do it in less than an hour. Although there are several Amazon Marketplaces, we're going to focus on the US version, Amazon.com.

There are several steps to the process of registering for Amazon, which you can come back to at any point. However, if you have this information before beginning the application process, you'll have a much easier time with the registration process.

  1. Business and contact information. This should include a contact name, address, and the legal business name on file with the state or local government. You will also need to provide a phone number since Amazon will contact you during the registration process.
  2. An email address. You'll use this email address to log in to Seller Central. Amazon will begin emailing you immediately after creating your account, so be sure to set up a business email before starting the process.
  3. A credit card. Amazon needs a card on file to charge you for any selling expenses. It should also have a valid billing address, which they'll check. If for some reason, your credit card billing address isn't correct, you cannot create a merchant account.
  4. Your business tax ID number. You must complete a 1099-K tax form during the registration process, so you should have all your business tax ID information ready. It's an IRS requirement to provide this information since you will most likely earn enough money for Amazon to require tax filings. Amazon will tell the IRS how much you collect from their site, and your business will pay taxes on the earnings.

Most likely, you have all this information on hand. If not, take time to register your business in preparation to become an Amazon seller. Once you have the information you need from the list above, then go ahead and apply. You'll have a much easier time taking care of these requirements before beginning the application.

How to sign up as an Amazon Seller

How to sign up as an Amazon seller on Seller central

Now that you have all the information you need to complete the registration process, here's how to sign up. There are several ways to register for a Seller Central account, including:

  • With the "Start Selling" link at sell.amazon.com.
  • Using the "Register Now" or " Selling on Amazon" links at sellercentral.amazon.com.
  • At the bottom of the amazon.com homepage, where you'll find the "Sell on Amazon" and "Make Money with Us" sections.

Where you start the registration process doesn't matter. They'll essentially all take you to the sell.amazon.com site, where you'll sign up.

Should you register as an Individual Seller or a Professional Seller?

The actual decision you should make is whether to be an Individual Seller or a Professional Seller. Which one you decide depends on your business, how many products you plan to sell in your first few months on Amazon, and what you plan to sell in the future.

If you want to start small, you can begin as an Individual Seller. If your brand already sells items on other platforms and has an existing customer base, then becoming a Professional Seller might make more sense to start. Either way, you can switch at any time by paying the Professional Seller fee.

What are the differences?

There are some significant differences to note which may impact your decision about selling on Amazon:

  • Individual Sellers don't have a monthly fee, while Professional Sellers pay $39.99 regardless of which items they list or sell during the month.
  • However, Individual Sellers don't get to avoid all the fees. To make up for the lack of monthly expenses, Amazon charges Individual Sellers $0.99 for each item that sells. Professional Sellers don't have the per-item fee.
  • Individual Sellers must convert their accounts if they sell more than 40 units per month. There's no limit to how many units a Professional Seller can sell in a month.
  • Professional Sellers can set their shipping rates. Individual Sellers cannot and can only collect shipping fees that Amazon collects on their behalf. Usually, this will be less than a seller prefers to earn for shipping and handling.
  • Individual Sellers cannot list new items to Amazon. Instead, they must create offers for products that already exist on the site. Professional Sellers can create their listings, even if the product is not yet on Amazon.
  • Professional Sellers have more flexibility and can sell in categories that Individual Sellers cannot offer. Although there is an application process for Professional Sellers, Individual Sellers are unable to apply.

4. Enroll in Amazon's Brand Registry

Enroll in Amazon's Brand Registry

Professional Sellers also can join the Amazon Brand Registry program. But what is it, and what are the benefits of doing so? Let's discuss why you should enroll in the Amazon Brand Registry program and what you'll need to start selling as a brand on Amazon.

Why should you enroll in the Amazon Brand Registry program?

Enrolling in the Brand Registry program will give you access to exclusive benefits relevant to sellers on Amazon. To join, you'll need a registered trademark for your brand name and an image file showing how your brand uses its mark in commerce. If you don't have either of these things, third-party services can help you set up a brand registry account.

Once your application is approved, and you become an official member of Amazon's Brand Registry, benefits include:

Create A+ Enhanced Listings

You'll be able to optimize the content on your product listings by adding enhanced brand content (A+ information). To support your listings and tell your story, you can add images, editorial copy, bullet points, and more.

View metrics for your products

With the Brand Registry program, you'll be able to view data specifically about your brand's sales performance on Amazon. You can report on net revenue, the number of units sold, and more with this information.

Access exclusive reports

Some reports are available only to sellers enrolled in the Brand Registry program. Common reports include:

Your Product Launch Planner

This report shows your product launch calendar and helps you track the progress of all your products throughout their life cycle. Manage Your Inventory with Sales and Trends Report The Sales and Trends report provides information about your products' sales performance, price, ranking, marketing events, and consumer demand.

What to know when applying for Amazon's Brand Registry program

There are a few things Amazon needs before you earn acceptance into the Brand Registry program. Before applying, collect this information:

  • Active text-based or image-based trademarks.
  • The trademark registration number is given to you by an Intellectual Property office.
  • A list of the categories where you want to sell your brand's products.

The three-step Brand Registry application process

Once you have all that information, enrolling in the Brand Registry program is simple. There are three steps:

  1. Review the eligibility requirements. They're different for each country.
  2. Sign in to the Brand Registry program using your Seller or Vendor Central account. Yes, both Sellers and Vendors can join the program.
  3. Enroll your brand. Amazon will confirm, and you'll have access to Brand Registry features that protect your brand after confirmation from Amazon.

5. Order Fulfillment Setup

Setting up order fulfillment is simple if you choose to have Amazon fulfill orders for your business. There are a few ways to fulfill orders, either by doing it yourself as a seller-fulfiller, having Amazon do it for you by becoming an FBA seller or using a combination of both.

Fulfillment by Amazon (FBA) vs Fulfillment by Merchant (FBM)

Every seller that starts will fulfill their orders until joining the FBA program. You can begin in the FBA program after creating your professional account, which is the first option.

Fulfillment by Amazon (FBA) vs Fulfillment by Merchant (FBM)

Option 1: Start selling via FBA

After you start a Professional Seller account, you can create listings and send the item to Amazon. Amazon will receive, warehouse, and fulfill your customer's orders if you choose.

Option 2: Convert existing inventory to FBA

Your other option is to convert existing products to the FBA program. You'll do this in the "Inventory" tab of your Seller Central homepage. After navigating there, click "Manage Inventory." Next, click the "Actions" drop-down option and select "Change to Fulfilled by Amazon."

Your listings will disappear until Amazon receives your products at a fulfillment center, which is why there's a third option to use both the FBA and FBM programs at the same time.

Option 3: Create a unique SKU to use both fulfillment methods

If you don't like the idea of your listing changing, you can duplicate your products to generate two SKUs. From there, you'll fulfill one listing and have Amazon meet the other, allowing you to decide which orders you want to achieve and which ones you'd prefer Amazon to manage on your behalf.

6. Create or Transition to Amazon Advertising

How to transition to Amazon Advertising

In addition to joining the Brand Registry program, you may also want to start advertising as a Vendor or Seller on Amazon.

Amazon Advertising as an Amazon Vendor vs Seller

You have the option of creating or transitioning your Amazon Advertising account as either seller type. Here is the process you'll follow as a Vendor or Seller respectively.

Creating an Amazon Advertising account as a vendor

  1. Register for Amazon Advertising with your Vendor Central or Advantage Central account
  2. Select an ad type and product that you want to advertise
  3. Set your click bid and budget
  4. Launch your advertising campaign

Creating an Amazon Advertising account as a seller

  1. Log in to Seller Central and visit the 'Advertising' tab
  2. Create your ad campaign
  3. Wait for the review process to complete (unless you're creating Sponsored Product campaigns)
  4. Set your click bid and budget
  5. Monitor performance and optimize campaigns

As can tell, transferring or establishing an advertising account is straightforward. Vendors have access to more advertising options, although that shouldn't be your only reason for selling directly to Amazon rather than managing the sales process yourself.

There's also one additional factor to consider while deciding between becoming a Seller or Vendor, so let's discuss account management.

7. Monitor your account closely

Vendors and Sellers both have ongoing account maintenance, and you must monitor your account closely, regardless of how you decide to sell. However, vendors have far fewer tasks to manage on a daily and weekly basis. Here's what you should know.

Manage orders in Amazon Seller Central

As an Amazon merchant, monitoring and maintaining your account health is an essential task that never ends. That’s why it’s necessary to manage orders in Amazon seller central using the account health tab and other sections on the site. You can monitor your account health by:

  • Visiting the Seller Central home page
  • Hovering over Performance and clicking "Account Health"

On the Account Health page, you'll see your Account Health Rating, Order Defect Rate, Cancelation Rate, and several other metrics that require your immediate attention. Failing to monitor your account can lead to listing or account deactivation, so don't forget to review your metrics often!

Monitor account health as an Amazon Vendor vs Seller

As a vendor, you're only dealing with Amazon, which makes the process of monitoring your account a lot easier. Here are some daily tasks you should complete as a vendor:

  • Review new orders
  • Resolve any pending or incomplete shipments
  • See whether you have approval on new products
  • Review your performance
  • Resolve existing disputes
  • Check your Case Log
  • Resolve any chargebacks
  • Manage inventory levels

8. Conclusion

A lot goes into selling on Amazon, but at some point, Amazon might grant you the ability to sell as a Vendor rather than a merchant. Which route you decide depends on your business and where you want to focus. Hopefully, this guide helps you select between both options and clarifies what you can and cannot do as an Amazon Seller or Vendor. Each option has pros and cons, so choose the selling method that helps your business succeed.

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