Maximizing Revenue on Amazon: Seller Central vs. Vendor Central

February 27, 2018

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When you decide you have a product you want to sell on Amazon.com, you have several options to choose from. Most companies will end up using Seller Central or Vendor Central. How do you know which is the best for you?

What is Seller Central?

Seller Central is a self-service platform on Amazon. The process starts with registration at the Amazon Seller Central website. With Seller Central, you own the inventory until it is sold. You can sell items you have in stock and then ship to the end consumer. Many sellers decide to have Amazon stock the inventory in a system known as Fulfillment by Amazon (FBA). With FBA, Amazon ships your product to the customer when a unit is sold. Other than reducing your workload, items sold via FBA appear as Amazon Prime and that will increase the likelihood of selling more than if you ship the items direct to the customer.

What is Vendor Central?

Vendor Central is Amazon’s wholesale buying platform. Think of this as if Walmart had a buyer you worked with who bought in bulk quantities from you. This is a B2B model since the buyer – in this case Amazon – is not the end customer and will instead resell your product.

Which One is Right for You?

There are pros and cons of all three options presented, but following is a quick summary to help you make the right decision.

Seller Central with Self-Shipping

Pros

• Inventory can be fulfilled from your warehouse
• Lower fees
• You control retail pricing
• You choose shipping fees
• This can often result in the highest margins

Cons

• If there is anyone else selling the item with FBA inventory, you likely won’t get the buy box
• If you are the only one selling this item, your rankings will be hurt by not being FBA

Seller Central with FBA

Pros

• Helps your Amazon rankings
• Your control retail pricing
• Inventory is Amazon Prime
• Payment schedule is every 14 days
• FBA calculator shows your exact costs

Cons

• Your inventory is held by Amazon and you pay them a monthly storage fee
• If you have several products, it is difficult to calculate the exact margin you are making on each

Vendor Central

Pros

• Amazon bulk purchases upfront
• Items are listed as Amazon Prime
• If you sell heavy or large items, Vendor Central is often the most cost effective option
• You get access to Amazon Marketing Services (AMS) ads, Amazon’s most powerful marketing platform
• Helps your Amazon rankings

Cons

• Payment schedule is 30+ days
• Amazon pays the wholesale price
• On items under 10 pounds, you normally make less margin than Seller Central
• You often don’t control the retail price (Amazon chooses it)
• You negotiate against one buyer whose job it is to pay as little as possible
• Amazon may restrict you from advertising – or even selling – unless you offer a better price

Conclusion

Although clearly there are many variables list above, the best option often is Seller Central – Fulfilled by Amazon.

Amazon has a complex algorithm to determine where listings should rank on Amazon and the easiest way to rank higher is to sell more. But Amazon Prime also significantly increases your likelihood of ranking higher and only Seller Central – Fulfilled by Amazon and Vendor Central earn you the Amazon Prime designation.

The average product sold through Seller Central – Fulfilled by Amazon will make higher margins for the seller than Vendor Central. This should not come as a surprise since Seller Central is closer to a B2C model and Vendor Central is a traditional B2B model.