E-commerce expert Jens Armbrecht in an interview: The advantages of Amazon’s vendor program
Amazon sellers can sell their goods not only as a Seller but also as a Vendor. This means that they do not sell directly to end customers but become a supplier to Amazon. A classic B2B business relationship is established with the online giant.
However, many forums contain frustrated vendors reporting difficulties with the program. Additionally, it seems that more and more content originally reserved for vendors is being made available to sellers. So where do the advantages of the vendor program lie?
The online giant is rather reserved with information about the program. Only in Vendor Central do sellers learn more. For this, registration as a vendor is necessary.
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, one must keep in mind for whom the vendor program is actually intended. 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 very 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 to switch from Seller to Vendor? Would you also recommend some vendors to switch to the Seller program?
Jens Armbrecht: “This cannot be answered in a general way. 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 one wants on one hand and what one can do on the other.”
SELLERLOGIC: In many forums, there are complaints that the costs for the vendor program are very opaque, such as the advertising cost surcharges. Are you familiar with this issue? What would you advise those affected?
Jens Armbrecht: “Yes, I actually hear that from time to time as well. However, it is definitely not opaque. A look into Vendor Central and you can see why you paid which “penalty”.
Certainly, there are also real challenges such as the SIOC program – but 90% of the time it is due to the vendor not having control over their processes.
SIOC is a method that Amazon uses to package goods for the customer. The online giant pays attention to producing as little packaging waste as possible.
The requirements from Amazon are indeed very high, but every vendor knows this in advance – at least if they have informed themselves properly 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 in the end of whether they can even meet the requirements and to ensure that the project does not become a bottomless pit.”
SELLERLOGIC: A few years ago, one of the arguments for Vendor Central was access to advanced advertising formats such as A+ Content and Amazon Vine. However, these are now also accessible to sellers. Is vendor status still worthwhile then?
Jens Armbrecht: “Yes, especially since larger manufacturers have no way to send an item with an invoice to an end customer, the vendor program will still be needed here.
All manufacturers/vendors should fundamentally reconsider this or position themselves differently to be more agile and not be so heavily dependent on a single customer (which is essentially what Amazon is in the vendor program). We are also happy to support here and highlight the corresponding advantages and disadvantages.”
SELLERLOGIC: Another advantage that is 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 written for each order. Certainly, this can now also be done through Amazon, but especially larger manufacturers have a problem with this.
If a vendor contract is negotiated properly, there are also no returns, which is another point that I, as a manufacturer, do not have to worry about.
A vendor business can be a very classic B2B business, even though there are certainly some pitfalls.”
SELLERLOGIC: Are there any announcements about further advantages for vendors that will remain exclusive to them and not be opened up to sellers?
Jens Armbrecht: “I have actually heard one or two things about that, but I cannot say anything yet.”
SELLERLOGIC: Thank you!
Image credits in the order of the images: © alexmishchenko – stock.adobe.com / © thodonal – stock.adobe.com
