As brands invest more in Amazon and begin to develop a strategic presence in the marketplace, a growing number of Vendors are exploring the utilization of Seller Central.
Using a combination of Vendor Central and Seller Central – an Amazon ‘hybrid’ model – allows brands to reap the benefits of both platforms.
The comparison of Seller Central vs Vendor Central is an often-discussed topic, and for good reason. There is a long list of considerations when choosing which platform is best for a brand, and the implications are important and widespread. Here are four advantages to Seller Central:
1) Inventory Control
As a 1P, Amazon orders the quantity of products it feels is necessary to satisfy demand, based on their algorithms. Conversely, if fulfilling by merchant (FBM), the Seller tells Amazon how much inventory they have on hand. If utilizing Amazon’s fulfillment (FBA), the brand sends the desired number of units to Amazon fulfillment centers. This gives the Seller the advantage of having more control over inventory, and reducing the risk of a stock out.
2) Price Control
3Ps have complete control over pricing. Amazon Retail controls all pricing for 1Ps and has a reputation for causing headaches affecting profitability, MAP pricing, and more.
3) Predicting Profitability
As a 1P, costs are at the discretion of Amazon Retail and it will frequently re-negotiate wholesale pricing and costs. Costs are more clear-cut in the 3P model. As a Seller, it’s far simpler to calculate and understand profit margins by ASIN.
4) Customer Communication
1Ps relinquish all communication with the customer to Amazon. 3Ps have the ability to message individual consumers following a purchase. This creates unique opportunities to elicit product reviews and future purchases.
Given these advantages, it’s easy to start to understand why many Vendors are making the transition to Seller Central and employing a hybrid model.
To get a more in-depth understanding of the differences between Seller Central and Vendor Central and making the best decision for your brand, check out our new whitepaper.