In this episode of Selling on Giants: The eCommerce Marketplace Show, the guest speaker is Will Haire, BellaVix’s cofounder, an expert with extensive experience in the direct-to-consumer retail industry and a proven track record of implementing successful marketing strategies on renowned platforms like Amazon and Walmart, talks about the process of going “ From Vendor to Seller Central: navigating the Transition and Thriving on Amazon”.
Whether you’re an experienced seller looking to decide if you go as a Vendor or Seller on Amazon, what are the main differences between them? Go ahead and see our key takeaways and listen to our newest podcast. With Vendors being wholesalers and Amazon handling the customer experience, including packaging and returns? However, this also limits control over pricing, inventory management, and product launches for your Amazon presence or a newcomer seeking guidance on how to create compelling content. Don’t miss out on From Vendor to Seller Central: navigating the Transition and Thriving on Amazon”.
Key takeaways: / Short Summary:
Key Differences between Vendors and Seller Central
Transition between vendor and seller central on Amazon has become a hot topic in recent years due to the challenges faced by sellers, such as decreasing profitability.
- The main difference is the business model, with Vendors being wholesalers and Amazon handling the customer experience, including packaging and returns. However, this also limits control over pricing, inventory management, and product launches.
The Challenges and Differences Between Vendor Central and Seller Central on Amazon
- Vendors control inventory, pricing, and customer relationships on Amazon’s marketplace.
- 3P sellers have better margins and can control pricing, but must adhere to Amazon’s fair pricing policy.
- Renegotiating pricing on Vendor Central is difficult due to inflation and rising costs of goods.
- Some vendors struggle to make profits on Vendor Central and are forced to switch to Seller Central.
- Amazon prioritizes its own profits, sometimes at the expense of its vendors and sellers.
- Transitioning from Vendor Central to Seller Central is a lengthy process.
Factors to Consider for Seller Transition
- Several factors to consider for a seller transition:
– Not getting enough purchase orders or unable to renegotiate contracts, leading to increasing prices while Amazon remains unaffected.
– Facing chargebacks and losing profit due to Amazon’s policies and penalties. – Consistently not having the buy box, which could harm sales.
– Needing more control over pricing and inventory.
– Transitioning accounts due to profitability and pricing control concerns.
- When Vendor Central is preferred over Seller Central:
– Manufacturers lacking customer service capacity.
– Small teams unable to handle the intricacies of maintenance.
– Distributors selling to wholesalers with existing agreements.
– Benefit of having an Amazon rep and being part of the retail analytics team.
- The hybrid strategy combines seller and vendor approaches for improved margins and ranking benefits in search engine optimization.
Transitioning from Vendor to Seller Central: Best Practices and Scenarios
- Amazon has invested heavily in third-party sellers, offering benefits like A+ content that was previously only available to vendor Central.
- Four scenarios for sellers transitioning:
- (1) Amazon erodes pricing, possibly due to MAP policy issues;
- (2) Unsustainable fees to serve Amazon, including MCF fees and chargebacks;
- (3) Lack of support from Amazon, resulting in difficulties in negotiating aspects of the catalog;
- (4) Transitioning to seller Central for better customer service and improved access to answers.
Diversifying Your Amazon Business with a 3P Account
- It is recommended to diversify your Amazon business by opening a 3P account alongside a 1P account.
- Having a contingency plan in place can protect your business in case Amazon raises fees or shuts down the program.
- Different business models can be discussed to adapt to potential changes in Amazon’s policies.
- Bevi offers marketplace management services to help grow your brand on marketplaces like Amazon.
- Bevi provides personalized support and expertise tailored to your specific needs.
- Switching from vendor to seller central can present challenges, but a hybrid approach is often recommended for better control over stock, purchase orders, and cost structure.
Transitioning from Vendor Central to Seller Central on Amazon
- To use Amazon as a direct-to-consumer channel for private label products, notify the vendor team if terminating the relationship or considering a hybrid approach.
- If going hybrid, migrate listings from vendor to Seller Central and mark the products not wanted on vendor Central as permanently unavailable.
- It takes time to phase out, but it’s important to transition now to avoid Amazon blocking third-party sales.
- Most companies are flexible and prefer 3P, but some agreements may restrict selling on other platforms.
- In some cases, creating a new brand on Seller Central may be necessary to transition, leaving the old brand to die.
- Consider profitability and feasibility before committing to the transition on Amazon.
Transitioning from Vendor to Seller on Amazon
- The transition from being a vendor to a seller on Amazon doesn’t take too long, usually around four to six weeks.
- Using ASINs, sellers can upload a flat file and optimize it for search to ensure their products are available.
- Advertising on Amazon is linked to the buy box, so if sellers are using a hybrid model, they will have to manage two advertising accounts.
- Switching to a seller account means starting new advertising campaigns and understanding that they may take time to perform effectively.
- A full transition, including sales, advertising, and feeling confident, can take around six months.
- Preparing inventory for FBA and working through brand registry are important steps in the transition process.
- It is possible to use the same brand name for both vendor and seller accounts, and this can be addressed through brand registry.
Issues with EIN and Setting Up Amazon Accounts
- It is important to not have any rogue EIN when working as a reseller, as it can cause issues.
- A private equity company bought brands but made the mistake of using a common email address for multiple accounts.
- After four years, the accounts were shut down simultaneously, leading to the need for a plan of action.
- Despite being grandfathered in, the accounts continued to face suspensions, requiring assistance from case support and Amazon.
- It took around 18 months to resolve the issues and ensure smooth account operations.
- Recommendations for starting the process include analyzing profit margins, stock availability, and being ready for additional responsibilities.
- Working with an agency can be beneficial, but cashflow considerations and vendor terms must be understood.
- Communication with the brand services team is necessary for listing contribution and rights transfer.
Challenges of Inventory Control on Amazon Vendor Central
- The algorithm determines the maturity and sales history of an account, affecting visibility and access to certain features.
- Changes made to product listings on Seller Central may not be reflected on Vendor Central, requiring case management to resolve the issue.
- Maintaining consistency across both platforms is important, but can be challenging.
- Having brand rights is necessary for certain actions on Seller Central.
- Vendor Central can be advantageous with the right terms in place, offering a hands-off approach and regular payments.
- Increasing purchase orders and getting more attention from Amazon is possible by spending more money.
- Lack of control over inventory is a major drawback of Vendor Central, especially during times when Amazon’s warehouses are overstocked.
- Amazon may request fewer purchase orders before big events, leading to inventory shortages and potentially causing problems for sellers.
Common Mistakes in Transitioning from Vendor Central to Seller Central
Many clients experience forecasting inaccuracies when ordering inventory from Amazon, leading to frustration and discrepancies in sales projections.
- A major issue during the transition is having excessive inventory of top-selling products, causing delays in moving to Seller Central and hindering marketing strategies.
- To ensure a smooth transition, clients should time the transition when inventory levels are low and mark listings as permanently available.
- Communication with the vendor team is crucial to terminate the agreement and determine which ASINs can be listed.
- Clients often do not seek help or guidance, resulting in product listing shutdowns or premature transitions.
- Checking whether a vendor is exclusive to Vendor Central can be done within Vendor Central, although the specific location is unclear.
Or listen to the previous episodes on the different platforms:
Links:
- LinkedIn – Personal: https://www.linkedin.com/in/willhaire/
- Branded – Linkedin: https://www.bellavix.com/
“Selling on Giants: The eCommerce Marketplace Show” is sponsored by BellaVix. To learn more, head over to https://sellingongiants.com/
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