Looking to get started with Amazon Vendor Central but not sure where to begin? You’re in luck!
For Vendor Central, help is here. We’ll guide you through the process of setting up your account and managing the difficulties involved for Amazon Vendors. We’ll help with Amazon chargebacks, fees, shortages and other varieties of difficulties.
But first things first – let’s cover the basics!
What is Vendor Central?
Vendor Central is a platform created by Amazon to give vendors and sellers a centralized place to manage their relationship with the company. It provides Vendors with the tools they need to monitor their performance metrics, receive Purchase Orders and much more.
The key difference between Vendor Central and Seller Central is the sales process, or rather, who you are selling to.
With Seller Central, you sell to consumers. You can use fulfillment services such as FBA, but the method is very much the same: You – Amazon – Consumer
But Vendor Central is very different. With Vendor Central you sell directly to Amazon. Amazon takes your products and whitelabels them under the Amazon Retail brand. While at first glance this may diminish your branding reach, Vendor Central helps your business. But more about that in a moment.
Lastly, in order to use Vendor Central, Sellers must first be invited and approved by Amazon. Vendor Central is an exclusive program only available to promising merchants, however you can maximise your chances. If you want to increase your odds of becoming a Vendor on Amazon, you need to be:
- An existing Seller with an extensive record of successful sales with your own products and little-to-no errors.
- A business with exceptionally high demand for your products.
- An exhibitor with products that Amazon believes have high-selling potential.
You’ll need to exercise a flair for business and unique product creations in order to effectively become an Amazon Vendor. So the easiest opportunity to become a Vendor on Amazon is to increase your effectiveness as an Amazon Seller.
The Benefits of Vendor Central
Does Vendor Central help all merchants? It depends upon your business, products and supply chain. Some businesses elect to stay as Amazon Sellers rather than Vendors. But we’ll identify your personal needs later.
If you’re a business owner who sells products on Amazon, you may be wondering if Vendor Central is right for you. Vendor Central is a program that allows select businesses to sell their products directly to Amazon. In other words, Amazon becomes your customer instead of just another platform where you sell your products.
There are many benefits of selling through Vendor Central, including:
- Increased visibility for your products
- Larger, more consistent orders
- Dedicated account management support
- Less hassle packaging, preparing and shipping singular orders
- Access to Amazon’s powerful marketing tools
- Better chance to win the Amazon Buy Box
- More qualified target audience
- No worries about customer support
Of course, there are also some drawbacks to consider before making the switch to Vendor Central. For example, you’ll likely have less control over your listing and how your products are presented on Amazon. There’s also the potential for increased competition from other vendors.
So, does Vendor Central help businesses grow? With the increase in orders and cutdown in packaging work, it definitely allows businesses to scale up. However, with that said it isn’t perfect. Even Amazon Vendor Central has a few drawbacks.
Drawbacks of Vendor Central
Fees, fees and fees.
Don’t be too scared, we don’t mean our Vendor Central help for beginners to dissuade you! But considering the advantages, Vendor Central fees are a fairly light drawback compared to how much you stand to gain.
There are things such as Market Development Funds which cover catalogue management and marketing initiatives and more. Here’s a full list to help with Vendor Central:
- Vendor Chargebacks and Shortages
- Damage allowances (approximately 2%)
- Market Development Funds
- Potential access to Premium Vendor Services including:
- Amazon Vine
- A+ Content
- Amazon Retail Analytics Premium
- Shipping Costs / Freight Allowances
- International Shipping / Return Shipping
- Taxes and Duties
- Currency Conversions
Chargebacks and Shortages are potentially the most dangerous however. These fees are charged if a Vendor makes a mistake during the process. This can range from incorrect paperwork, to late shipping or improperly packaged products! Each single charge costs a percentage of the cost of each unit, and while not much initially, can soon grow into a massive drain on your profits.
The easiest way to solve this is to remain completely Amazon compliant – but even then, sometimes Vendors are still mistakenly charged. Luckily there is a way to avoid that too, but you’ll have to read about it further below!
How to Use Vendor Central
If you’re a seller on Amazon, Vendor Central is a great resource to help you manage your business. Here are some tips on how to use Vendor Central to its full potential:
- Use the Reports section to track your sales and performance. This information can be helpful in identifying areas of opportunity or potential problems.
- The Inventory section is a great way to keep track of your stock levels and reorder products as needed.
- The Marketing section provides tools and resources to help you promote your products and drive sales.
- Use the Customer Service section to manage customer queries and issues. This is also a good place to keep track of product reviews.
- The Settings section is where you can update your account information and preferences.
Tips to Help Vendor Central
Amazon Search Terms Report
This Vendor Central help diagnosis can vastly improve your keyword research. In the report you can see which search terms lead to more clicks and higher conversion rates. You’ll also identify which bad keywords you should avoid.
Forecast & Inventory Planning
As a Vendor you sell directly to Amazon, but they are demanding customers. On each Purchase Order they will include a time window in order to receive their products and maintain their supply chain efficiency.
Your mean forecast is the best estimate of customer demand for a certain product. You’ll then be able to see:
- P90 forecast
- 90% chance that Amazon will buy the volume indicated or less, with a 10% chance that they’ll purchase more.
- P80 forecast
- 80% chance that Amazon will buy the volume indicated or less, with a 20% chance that they’ll purchase more.
- P70 forecast
- 70% chance that Amazon will buy the volume indicated or less, with a 30% chance that they’ll purchase more.
Sales Performance Trends
Never gloss over this report. This document gives you updated information on views, clicks, conversions, revenue, units sold and many other totals. This is essential for monitoring your KPIs and improving your business.
Identify the products that are making you a profit. Your PPM is the value you retain after deducting the COGS and multiple other values. Once you pinpoint what makes you a profit, the next question is why is it making you a profit? What can you add to other products for them to perform like this one?
Vendor Central Help for Chargebacks & Shortages
Chargebacks and Shortages on Amazon are enough of a problem for vendors, that they deserve their own article. If you want the full breakdown, here is our guide to Amazon Vendor Chargebacks and Shortages.
However, in brief, these Amazon fees can set back Vendors thousands every single month. They are small charges that cut bit-by-bit into your profits. Many of these are also calculated using your Amazon compliance score, so if you make repeated infractions over time, the fees actually make themselves worse.
Occasionally, Amazon charges Vendors incorrectly as well – which is terrible for you if it isn’t your fault!
Obviously the only clear action is to record evidence of every delivery, transaction, Purchase Order, Advanced Shipping Notification etc and challenge each tiny chargeback individually with a folder of evidence.
Only that wouldn’t be efficient, would it? No, for Vendor Central help with chargebacks and shortages you need an automatic tool that catalogues evidence and by itself, challenges these fees.
You need VC Managed Service.
We hope our help has helped you get started with Vendor Central and that you now feel more confident using this powerful platform. If you need more help, we offer a range of services to support Amazon Sellers and Vendors, including VC Managed Service. Talk to a professional today to learn more about how we can help you grow your business on Amazon.