Amazon Seller or Amazon Vendor? – SellerEngine
Vendors use Vendor Central. As shown in this Acadia tutorial, it displays orders, items, payments, and reports. It features tools for Amazon Vine, Posts, Manage Your Experiments, and A+ Content. It also provides access to the AdvertisingAdvertising is a means of communication … More Console and Amazon Retail Analytics (ARA).
Business Model
To Amazon, Vendors are wholesalers. After they receive a Purchase Order from Amazon, they ship their products in bulk using a set of fixed logistical options. Amazon then takes charge of the shipment and manages the entire sales cycle, pricing included.
Sellers are retailers who sell directly to customers. Whether they opt for the Professional or the Individual seller account, they set their own prices and manage their own accounts. Unless they outsource to FBA, they also handle picking, packing, shipping, and customer service.
Vendors have no involvement in how their products reach the buyer. Once they ship the items to Amazon, they hand over every aspect of order fulfillment. In return, they may get an Amazon Vendor Manager to help with negotiations, promotions, marketing, sales, and product quality issues.
As a 3rd party seller, you can switch between FBA, MFN, MCF, and SFP fulfillment as you see fit. Select your courier and the delivery service. Consolidate shipments or choose a 3PL service. Make your mark through packaging, gift wrapping, and package inserts.
Order Processing
Sellers list their products and receive their B2C and B2B orders from Amazon via email. They can keep an eye on FBA orders and inventory levels, deactivate listings, and remove items. They also manage MFN and SFP orders themselves. They handle customer queries, shipments, refunds, and so on.
However, vendors usually process these B2B orders through EDI and API. They must monitor backorders and provide sufficient and accurate stock to fulfill Amazon’s order and avoid chargebacks. They must also time their shipments, manage disputes, and keep an eye on the Financial Scorecard.
Customer engagement
3PThird-party sellers are independent indi… More merchants sell directly to Amazon’s customers using their seller name. They build relationships with buyers through Buyer-Seller messaging, feedbackA performance rating on a scale of 1 to … More replies, discounts, and packing slips. Buyers go to them first if they have questions about their merchant-fulfilled (MFN) orders.
But 1PVendors, first-party merchants or 1P are… More merchants have no means of reaching the buyer. Once Amazon’s order is accepted and fulfilled, the product is “Sold by Amazon”. The vendor has no control over it. Things like brand awareness, loyalty, feedback, milestone notification, and issue resolution are out of their hands.
Sellers have full control over their prices. As long as they are within the limits of Amazon’s Fair Pricing Policy, price validation rules, and daily repricing caps, they can set their prices as they see fit. But they’re often forced to compete with Amazon, vendors, and undercutters for the Buy BoxThis refers to the situation where a sel… More.
Vendors can only accept or refuse an offer from Amazon. Once accepted, the vendor’s price is unlikely to rise. In fact, renegotiations will probably bring it down. This is because Amazon adjusts prices based on algorithms, and factors like demand tend to diminish with time.
Fees and Costs
On Amazon, fees can add up, especially if you store too many FBA items for too long. There are also countless hidden costs when you sell on Amazon, whether it’s an FBA, MFN, or SFP order. But most sellers are chiefly concerned with Amazon’s referral fee, which is usually 15%.
Vendors have costs of their own for market development, freight, damages, marketing, remittances, packaging, and Chargeback fees (30%-50%). But for them, the main issue is negotiating a good price, as it can go down as demand shrinks.
Vendors tend to receive purchase orders every Monday with payment in 60-90 days. Even if the orders are small because Amazon likes to order very little at a time, they make for a good cash flow. But there may be times when no orders come through for weeks (e.g., new rules, glitches, plummeting demand).
Sellers, on the other hand, can receive orders any time. With sellers, liquidity issues are more likely to be caused by slow payouts, withheld funds, or suspensions than lack of orders. But the earliest a seller can hope to be paid for a sale is seven days after a tracked and verified delivery.