Is Amazon repositioning the Vendor Central platform for large corporate brands only?  

We’ve seen Amazon slowly move this way for a number of years. First by shutting down Vendor Express, then reducing how many vendor managers work directly with brands, and most recently there have been waves of termination notices going out to existing vendors. Just recently many received a notice that looked like this:  

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We’ve made the decision to stop sourcing products from your company as part of our regular review of product offerings, and a strategic realignment to optimize our operations and better serve our customers. 
 
Effective [date], our vendor relationship will be terminated. We won’t enter into any new agreements, or extend current ones, beyond this termination date. 
 
If you'd like to continue selling your products on Amazon, we welcome you to list your items as an independent seller. As a seller, you’d maintain access to the same customer base. You could also choose from fulfillment options, as well as a range of tools and services designed to fit your business needs and support your continued success. 
 
If you don't have a seller account, you can sign up today. We appreciate your support during this transition, and thank you for your understanding. Contact us if you have any questions. 

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What is a brand to do? Many I talk to are hesitant about setting up their own Seller Central account. They don’t understand how it works, they don’t have a team to manage it, or they feel it’s not a good fit for their business model. Whatever their reason, unfortunately Amazon is taking away the choice to sell on Vendor, leaving Seller Central the only option if you want to sell your products on the Amazon platform.  

The good news is that when I talk to brands who do have a choice between Vendor and Seller Central, the majority of the time I recommend Seller Central as, most of the time, the benefits to the brand are greater than what they will find on the Vendor platform. So while you may be panicking thinking this is going to be a hit to your business, there is actually a lot of upside. Let’s talk about what that upside is:  

The Benefits of Seller Central 

Launching New Products: Amazon has little incentive to order new products with no attached sales history, so launching new products through Vendor Central can be difficult. On Seller Central, brands are empowered to promote and market new and existing products as they see fit.   

Inventory Control: No more waiting on Amazon to issue POs. You decide when and how much inventory to send into the FBA warehouses. There are some guidelines to follow, you can’t overstock and there are fees for not having enough inventory, but you are able to ramp up or down your inventory levels based on seasonality or other factors.  

Control Your Product Page Content: Once enrolled with Brand Registry, you’ll gain control of the product detail pages on Seller Central, so you can ensure the content is consistent with your preferred brand messaging. And you can still upload rich content like videos and A+ content that improve conversion rates.  

Price Control: Seller Central also gives you direct control of product pricing, which can mean better profit margins and protecting your brand from price erosion. No more hoping that Amazon will honor your MSRP or MAP then trying to explain it to your other retailers when they don’t.  

Data & Analytics: In Seller Central, you gain access to rich analytics and data on your sales and customer base (at no additional cost), enabling you to optimize product listings, fine-tune your advertising, and accelerate sales.   

Robust Advertising: From Sponsored Products to DSP, there is a wide variety of ad products available to Amazon sellers enabling them to launch and optimize full funnel advertising, growing both new to brand and repeat purchases. In fact Sellers use the same ad platform as Vendors, there is total feature parity.  

The Potential Negatives  

You’ll certainly have more control over your account in Seller Central, but you’ll gain more responsibilities too, like price setting, inventory management, running your own advertising and promotions, and customer service. This could be a whole new set of tasks that you aren’t currently equipped to take on, and you’ll have to decide for yourself if you have the resources to meet the demands of Seller Central or if you need to outsource that to an agency partner.  

Planning for the Switch 

So what’s next? There are several things to do to prepare for the switch to Seller Central. 

Amazon Brand Registry -  Enrollment in Brand Registry strengthens your probability of success with a Seller Central account. Brand Registry gives your business greater control over your brand’s representation on Amazon, and it grants you access to robust analytic tools, and protects your intellectual property.  

To be eligible for Brand Registry, you must have a registered and active trademark and meet country-specific requirements. Be advised: registering your trademark can take several months to complete, so plan accordingly. If you’re already enrolled through Vendor Central, you can transfer your Brand Registry to your new Seller Central account.  
 
 

Operational Capabilities - Migrating to Seller Central’s direct-to-consumer model requires different operational capabilities. 

Order Fulfillment: Are you prepared to fulfill customer orders yourself (FBM) or will you utilize Fulfillment by Amazon (FBA)? Consider the costs of each fulfillment model carefully and evaluate your profitability at the SKU level to ensure you choose the right fulfillment method(s) to meet your profit goals. Understand that Amazon is obsessed with delighting the customer, so they hold marketplace sellers to very high standards. If you are unable to meet Amazon’s seller performance targets, you risk having your account suspended. Make sure you review and can meet all Seller Performance standards, particularly if you are FBM.  

Inventory Control: Do you have the resources and tools in place to monitor and forecast inventory, rather than fulfill Amazon’s purchase orders? If you are fulfilling your own orders, can you maintain adequate stock levels across your various sales channels and keep your Amazon listings up-to-date with your available quantities? Amazon expects sellers using FBA to maintain efficient inventory levels and monitors their in-stock rates, sell-through rates, excess inventory, and stranded inventory. FBA sellers who do not meet minimum inventory performance metrics can incur additional storage fees, as well as have FBA storage limits imposed. 

Customer Service: Seller Central requires a higher level of customer support and engagement: responding to customer emails/feedback, answering product questions, and abiding by Amazon’s rules regarding seller engagement with customers. FBM in particular entails customer service responsibilities that you will need to take on. While many brands like to have this direct customer contact, be sure you can handle the extra workload, and that you can absorb the associated operational costs. 
 
 

If any of this sounds overwhelming, it would be well worth it to consult with a full service Amazon agency or advisor. There are a lot of new tasks to manage, different terms of service to follow, and missteps can be costly. But once you are up and running you may actually see your sales increase on Amazon as you gain control over your presence on the marketplace.  

Remember, Seller Central is a different model than Vendor Central, but it does not have to be overly difficult. An experienced e-commerce team that specializes in optimizing your Amazon account can guide you through the transition that will keep the sales from Amazon coming in. If you have questions, want someone to review the steps for you, or are ready to hire a partner to manage the Seller Central platform, contact us and we’ll be happy to jump on a quick call to explore your options.