What is the Amazon Vendor Program and who is it suitable for?

On Amazon, you can generally sell in two different ways: through the Amazon Vendor Program or as a Seller. This blog will discuss how the program works, what benefits it can bring you, and what disadvantages it has.

Amazon Vendors have a B2B relationship with the online giant

In contrast to the Seller Program, as a Vendor, you sell to Amazon rather than selling through Amazon to end consumers. Thus, you enter into a regular business relationship with the e-commerce giant, which then sells your products to consumers.

Amazon Vendors deliver their goods in large quantities to the online giant, which takes care of sales, revenue monitoring, customer contact, and, last but not least, pricing. Interested parties negotiate terms with Amazon in advance and provide price lists. Amazon compares these with competitor offers and creates a proposal based on this information.

If you accept this offer, the first delivery can take place about a month later. Then, as a Vendor, you need to upload product tables in your Amazon account , as these are required for creating the product detail pages. You can add these tables in Amazon Vendor Central under the Inventory tab after logging in.

The Advantages of the Amazon Vendor Program

Those who do not actively participate as sellers in the marketplace also have their advantages. In addition to the ease of work – for example, because Amazon takes care of tasks such as customer support, returns management, and revenue monitoring – there are additional benefits:

Support from the Professionals: The Amazon Vendor Managers

The Amazon Vendor Services program supports you as a vendor on Amazon.de to ensure and strengthen your long-term success. This is the promise of the marketplace operator.

As mentioned above, Amazon vendors essentially act as suppliers to the online giant. Therefore, you will likely work closely with a Vendor Manager at Amazon. This person represents the company and will negotiate the contract terms with you, among other responsibilities.

Other responsibilities include managing marketing activities and customer satisfaction, as well as ensuring profitability and achieving sales targets. However, since managing Amazon vendors is a time-consuming and thus costly task for Amazon, it may be the case that smaller vendors receive less attention than larger ones.

Customer Trust Bonus

One argument that is often made is that customers trust the online giant. Amazon vendors supply the marketplace operator, which then acts as the seller to the customers. Sellers, on the other hand, sell directly to the customers and must therefore earn their trust first. However, the question with this argument is how often buyers really question whether they are buying directly from Amazon or just on its marketplace.

The Disadvantages of Operating an Amazon Vendor Account

Of course, the Amazon Vendor Program also has its limitations, which can negatively impact sellers depending on their needs.

Dependency

On one hand, there is a certain dependency that you enter into as an Amazon Vendor. Experiences from some vendors show that the contract terms of the online giant can be quite stringent. Ultimately, you must decide whether you want to play by the rules of the e-commerce giant or not.

Additionally, Amazon vendors are dependent on the online giant placing further orders with them. For various reasons, such as declining demand or insufficient profitability, it can happen that Amazon orders fewer or not enough goods from you.

Also regarding the product detail pages and their publication, you as an Amazon Vendor in Germany are dependent on Amazon.de. It is suspected that the listings from vendors are subject to more critical review. Therefore, it can take several weeks for your items to be published.

No Influence on Price and Margin

Like any supplier, Amazon vendors also have no influence over pricing, as this is determined by Amazon. Some Amazon vendors have experienced that low prices, such as after a promotional event, do not return to the level they were at before those offers.

Another disadvantage that some vendors see at Amazon is that customers may perceive an inconsistent pricing strategy. The online giant increasingly relies on an algorithm that adjusts its prices to match those of other offers. As a result, there can be price discrepancies between the marketplace and the vendor’s own online shop.

Since Amazon vendors cannot influence pricing, the opportunity to control your margins is also eliminated. Whether the items are more frequently in the Buy Box due to an aggressive pricing policy from Amazon and thus increase sales figures, or whether the price is so low that sales figures can no longer compensate, can vary from case to case.

Anything else?

Of course, there are not only advantages and disadvantages to the Amazon Vendor Program. Here are a few more interesting facts:

You Must Be Invited to the Amazon Vendor Program

While you can relatively easily sign up for the Amazon Seller Program, it takes much more to join the ranks of Amazon vendors. You cannot apply for this; instead, you must wait for an invitation from Amazon. The criteria that the e-commerce giant uses for this remain behind closed doors, as is often the case. However, it is clear that it primarily targets companies that operate in compliance and fairness while achieving high sales. Admittedly, these are also the minimum requirements that any seller should have for their suppliers.

It also seems that the Amazon Vendor Program primarily targets large companies. “Amazon Vendor Express” was a program that attracted smaller and newer businesses that had not yet qualified for Vendor Central. However, it was discontinued in 2018.

Until a Few Years Ago, Amazon Vendors Had More Advertising Options than Sellers

For a long time, tools like A+ Content or Amazon Vine were reserved for vendors. However, this has changed significantly, as Amazon has recognized the revenue potential of its advertising segment.

Currently, there is hardly any difference in terms of advertising between an Amazon vendor and a seller. A+ and Vine have long been made available to sellers as well, and industry experts like Ronny Marx believe that the two variants of seller and vendor will merge in the long term.

The convergence of sellers and Amazon vendors is also evident in the area of data. For a long time, sellers had a significant advantage here, as they had access to much more insight regarding their performance, which was either completely inaccessible to vendors or available only at very high costs. This area has also changed dramatically recently. Now, both Amazon vendors and sellers have access to a wide range of data free of charge.

Amazon Vendor vs. Seller

Which model you should choose, or whether you should even cancel your access to the Amazon Vendor Portal, ultimately depends on your own needs and preferences.

If you do not want to deal with topics such as winning the Buy Box, but would rather negotiate a supplier agreement with Amazon and are willing to forgo margin and control for that, the Amazon Vendor Program might be just right for you.

However, if you want to manage the marketplace yourself and retain control over marketing campaigns, pricing, etc., you are definitely better off with the Seller Program. In this case, it is advisable to take a closer look at tools that can support you, as only with intelligent automation can you sell successfully on Amazon in the long term. This ranges from tools that assist you with inventory management and accounting to those that make you more competitive. A good repricer, for example, can help you win the Buy Box even against Amazon!

If you cannot decide because you see a future in both models, you might also consider being both an Amazon Vendor and a Seller simultaneously. However, keep in mind that this hybrid model needs to be well thought out. If you do not have extensive knowledge of both models yourself, we recommend reaching out to a corresponding agency for assistance.

Frequently Asked Questions

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