E-commerce Expert Jens Armbrecht in Interview: The Advantages of Amazon’s Vendor Program
Amazon sellers can sell their goods not only as sellers but also as a vendor. This means that they do not sell directly to end customers but become a supplier to Amazon. This creates a classic B2B business relationship with the online giant.
However, many forums contain frustrated vendors reporting difficulties with the program. Additionally, it seems that more and more content that was originally reserved for vendors is being made available to sellers. So what are the advantages of the vendor program?
The online giant is rather reserved with information about the program. Only in Vendor Central do sellers learn more. However, registration as a vendor is required for this.
Therefore, we spoke with Jens Armbrecht, e-commerce expert and founder of Shopvires, about the advantages of the vendor program.
SELLERLOGIC: It seems that Seller Central and Vendor Central are increasingly converging. What advantages do you see in the vendor program compared to Seller Central?
Jens Armbrecht: “First, it is important to keep in mind who the vendor program is actually intended for. Most vendors are the manufacturers of products that sell directly to Amazon.
Even though sellers and vendors are increasingly converging in terms of ‘functionality,’ such as A+ Content, the vendor program will still remain attractive for manufacturers.
There is a simple reason for this: Many larger manufacturers cannot or do not want to sell directly to end customers for various reasons and therefore need someone like Amazon.”
SELLERLOGIC: Who would you recommend switching from Seller to Vendor? Would you also recommend some vendors to switch to the Seller program?
Jens Armbrecht: “This cannot be answered in general terms. In most cases, a hybrid strategy makes the most sense, meaning being both a vendor and a seller at the same time.
However, one should be very clear about what they want on one hand and what they can do on the other.”
SELLERLOGIC: There are complaints in many forums that the costs of the vendor program are very opaque, such as advertising cost contributions. Are you familiar with this issue? What would you advise those affected?
Jens Armbrecht: “Yes, I do hear that from time to time. However, it is by no means opaque. A look into Vendor Central shows why certain ‘penalties’ have been paid.
Certainly, there are real challenges, such as the SIOC program – but 90% of the time, it lies with the vendor, as they do not have their processes under control.”
SIOC is a method used by Amazon to package goods for the customer. The online giant aims to produce as little packaging waste as possible.
Amazon’s requirements are indeed very high, but every vendor knows this in advance – at least if they have done their research and not just had dollar signs in their eyes.
A clear tip: Everyone should seek external advice beforehand, for example from us, to have a neutral assessment of whether they can even meet the requirements and to ensure that the endeavor does not become a bottomless pit.
SELLERLOGIC: A few years ago, one of the arguments for Vendor Central was access to advanced advertising formats like A+ Content and Amazon Vine. However, these are now also accessible to sellers. Is a vendor status still worthwhile?
Jens Armbrecht: “Yes, especially larger manufacturers have no way to send an item with an invoice to an end customer, so they will still need the vendor program.
However, all manufacturers/vendors should fundamentally reconsider this or position themselves differently to be more agile and not so dependent on a single customer (which is essentially what Amazon is in the vendor program). We are also happy to assist here and highlight the corresponding advantages and disadvantages.”
SELLERLOGIC: Another advantage mentioned in many blog posts is that vendors no longer have to worry about logistics and customer support. However, FBA sellers also have this advantage. How do the systems differ in this regard?
Jens Armbrecht: “It’s not that easy to compare. Yes, fundamentally, Amazon (to some extent) takes over customer support when using FBA.
However, an invoice must be issued for each order. While this can now also be done through Amazon, larger manufacturers particularly have a problem with this.
If a vendor contract is negotiated properly, there are also no returns, which is another point I don’t have to worry about as a manufacturer.
A vendor business can be a classic B2B operation, even though there are certainly some pitfalls.”
SELLERLOGIC: Are there any announcements about additional benefits for vendors that will remain exclusive to them and not be opened to sellers?
Jens Armbrecht: “I’ve actually heard one or two things about that, but I can’t say anything yet.”
SELLERLOGIC: Thank you!
Image credits in the order of the images: © alexmishchenko – stock.adobe.com / © thodonal – stock.adobe.com
