Amazon is, by far, the largest ecommerce company in the world, says Statista — and so ubiquitous it’s now become impossible for consumer brands to ignore.
In 2021, the powerhouse grew to once unthinkable heights when it surpassed Walmart to become the world’s largest retailer outside of China: “A milestone in the shift from brick-and-mortar to online shopping that has changed how people buy everything from Teddy Grahams to teddy bears,” The New York Times reports.
As you can imagine, those who embrace the platform and its powerful features will be equipped to build, grow, and protect business performance over the long term. One such feature increasingly embraced by those who excel on Amazon is Amazon Vendor Central.
As of 2023, AMZ Scout says, Amazon boasted more than 310 million active users and more than 9 million sellers. The ecommerce marketplace is a wellspring of opportunity for global brands looking to connect with new customers. Learning how to become an Amazon vendor could be a game-changer for your company.
Here’s how to become an Amazon vendor, the benefits of adopting this approach, and whether or not it’s the right move for your business.
We tend to think of selling products on Amazon as something akin to a digital farmer’s market: Customers can browse numerous storefronts and conduct transactions with independent merchants — with each seller providing their own products, customer service, brand experience, and so on. But, that’s not the only way to sell products on the platform.
Amazon Vendor Central is a digital portal that allows vendors to sell directly to Amazon itself through the first-party (1P) selling module, and in turn, allows Amazon to offer consumers your products through their own channels — more of a traditional wholesaler/retailer arrangement than a digital farmer’s market.
As a vendor, Amazon itself becomes your customer — and Amazon Vendor Central is your digital portal for managing this relationship.
Both seller and vendor approaches have their respective merits (more on that below), and the best approach for your company will likely depend on several particulars: your key performance indicators (KPIs), inventory reliability, willingness to forego price control, and the relative competitiveness of your market, to name a few.
To start, touch base with your Amazon representative about which approach makes the most sense for your business model. If you’re a direct manufacturer or distributor, or if you don’t have the resources to manage selling directly to consumers, becoming an Amazon vendor is likely the way to go.
If your brand’s invite-only access to the Amazon Vendor Central portal is approved, you’ll begin receiving orders from Amazon. Once you fulfill those orders, Amazon will use its own channels to sell the product, and pay you an agreed-upon price on wholesale terms (typically in 30, 60, or 90 days with a 2% fee).
While Amazon vendors don’t pay the typical per-item fees that sellers do, they’re responsible for slotting and marketing costs, which can be 4-10% of their product cost, according to SellerApp.
Through Amazon Vendor Central, vendors can:
The vendor model is straightforward enough. But what are some reasons a brand might choose to adopt this approach over direct-to-consumer (D2C) sales on the site?
With Amazon taking the reins with regard to marketing, transactions, shipping, and customer service responsibilities, you can direct your attention and efforts elsewhere. In effect, your only concern regarding your team’s Amazon strategy would be fulfilling monthly orders for your one, massive customer.
It’s worth noting, however, that vendors are free to maintain both a seller and vendor account with Amazon, should they so choose.
As Amazon will now sell your products on its channels, the associated name recognition and resulting increase in customer trust can result in a significant competitive advantage. Customers feel confident buying from a well-known retailer like Amazon and — with all other factors being relatively equal — tend to go with the brand/supplier they trust over an unknown entity.
As you know, Amazon is the biggest retailer in the world — both on and offline. The company is constantly tweaking its ranking algorithms to ensure products featured on its channels are given preferential results in customer searches.
Why not let them shine that spotlight on your products?
Vendors have access to a few additional features unavailable to sellers: For example, vendors can participate in Amazon services like “Subscribe & Save” and Amazon Vine.
For better or worse, access to the Amazon Vendor Central portal is available by invitation only. However, there are some steps you can take to make sure your brand is well-positioned for approval.
As mentioned above, your first step should be reaching out to your Amazon account manager and expressing curiosity about becoming a vendor. If they provide you with an application to request an invitation, it’s certainly worth filling out and making your interest known.
That being said, Amazon is already continually searching for new brands and products to integrate into its vendor program. Thus, you’re much more likely to stand out on their radar as a top-selling, customer-pleasing seller who excels in your respective product categories.
As such, if you’re considering how to become an Amazon vendor, start by keeping your sales and customer satisfaction high. Be sure to take full advantage of available tools, like A+ content, customer Q&As, and other third-party applications, such as a product experience management (PXM) solution, to remain a consistent standout from your competition.
Remember, Amazon has a reputation of its own to protect, too. Demonstrating you’re a reliable brand partner will go a long way in winning their confidence.
While becoming an Amazon vendor isn’t a viable option for every business, some — especially those who operate their own manufacturing or distribution centers — could see streamlined processes, increased sales, and improved customer satisfaction while undertaking this approach. Smaller businesses, or those with limited inventories, are likely to have a better time remaining sellers.
Ultimately, the best thing you can do for your customers on Amazon — as either a vendor or a seller — is to provide an immersive, responsive, and consistent brand experience for each one of your product pages.