Amazon Seller Central vs Vendor Central: How to Choose

Posted on June 10, 2017 by

Amazon Seller Central vs Vendor Central: Which way should you go?

While the ecommerce landscape ebbs and flows there remains one constant we can’t escape (for now):

Amazon is the single most important platform you can be selling through if you want to stay competitive and profitable.

A 2016 study conducted by Bloomreach Inc., an internet marketing firm, revealed that 55{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of consumers use Amazon to search for products as their initial step on the buyer’s journey.

Those figures are up from 44{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} the previous year and the trend doesn’t seem to be slowing down.

Most wholesalers and retailers begin with Amazon’s Seller Central since it’s the most accessible platform when starting out, but at some point, you’re probably going to consider becoming an Amazon Vendor.

We want to help you make the best decision between the two, so we’ll share with you exactly what these platforms offer, the benefits and drawbacks of each, and how they can help or hinder your ecommerce business.

But first, let’s start by defining their differences.

What’s the Difference Between Amazon Seller Central vs Vendor Central?

The 2 primary ways to make money on Amazon: as a 3rd party seller (Seller Central) or a 1st party seller (Vendor Central).

Let’s take a look at exactly how these interfaces work and what they offer to you.

Seller Central

Seller Central is the interface that allows wholesalers and retailers to list their products for direct purchase from consumers. Amazon considers you a “marketplace” or “3rd party” seller and gives you nearly full control over your brand messaging and marketing.

If you’re selling 40 items or less, you can sign up for an Individual plan without a subscription fee, and you’ll simply be charged $0.99 per item sold plus other selling fees, which vary by category.

If you’re a fairly high volume seller, then you can sign up for the Professional plan which costs $39.99 monthly plus per-item selling fees, which vary by category.

Vendor Central

Vendor Central is the interface used by manufacturers and distributors to sell directly to Amazon. Instead of setting up a consumer facing list of your products, Amazon buys your stock in bulk and sells it for you.

You negotiate a price for your products with Amazon, then Amazon will send you purchase orders which you can fulfill by shipping your stock to Amazon directly. They handle the marketing and you pay a set co-op fee.

Vendor Central is currently invite-only, and Amazon usually reserves their invites for popular brands or big companies who have strong sales and a strong reputation in the market.

However, you can sign up for Vendor Express to begin selling wholesale to Amazon right away and you’ll get most of the same benefits. If you’re selling enough on either Vendor Express or Seller Central, Amazon may ask you to participate in Vendor Central.

Even though Vendor Central and Vendor Express are similar, there are some key differences that we’ll touch on a little later in this article.

For now, let’s look at the benefits of being a Seller vs. being a Vendor if you’re offered that choice.

What Are the Benefits of Seller Central vs Vendor Central?

When choosing which interface to use, or when trying to switch from one interface to the other, it’s critical to know exactly what you’re getting out of the deal.

Let’s take a look at some of the main benefits of Seller Central and Vendor Central, then afterward, we’ll take a look at the drawbacks of both.

Benefits of Seller Central

Price Control

You set your own prices and have full control on when and why you raise or lower them – allowing you to maximize your profits.

Customer Analytics

Seller Central provides a clean and robust analytics dashboard to help you forecast demand and understand your customer’s interactions with your products on Amazon.

Creative Marketing Control

Since you’ll have full control over your listing, you’ll have full creative control over marketing aspects such as what keywords are used, what videos are added, what pictures are displayed, and what strategies are implemented through Amazon’s premium advertising features.

Quick Payouts

Seller Central offers payments every 2 weeks which can be critical to your business if you suffer from lack of cash flow or your profit margins are very slim starting out.

Fulfillment by Amazon (FBA)

If you sell high volume and become a “pro merchant,” Amazon will give you access to their Fulfillment by Amazon (FBA) program whereby they handle your shipping, customer service, and returns.

Benefits of Vendor Central

Amazon Vine Program

Amazon’s Vine program is mainly used for pre-released or new products and allows the top reviewers on Amazon to (hopefully) write great things about your products and give your listings a huge boost in credibility.

More Sales Right Away

Since Amazon buys your products in bulk, you’ll see a larger volume of sales faster than when you sell them one at a time as an Amazon Seller.

A+ Content

A+ Content is essentially an enhanced product listing that expands the basic description field and product images, displays a detailed video explaining your product’s features, provides a comparison chart and generally enhances the look and feel of your product for increased conversions.

Additional Marketing Tools

A+ Content isn’t the only marketing perk offered by Vendor Central, you also get access to Amazon Marketing Services, Amazon Display Advertising, and Amazon’s Subscribe & Save program that consumers use to receive your items on a monthly basis.

“Sold by Amazon” Seal of Approval

Established brands that sell on Amazon as a 3rd party retailer already have high credibility in the eyes of their consumers. But, if you’re relatively unknown, having Amazon put their stamp of approval on your products by displaying them as being “Sold by Amazon” will boost consumer confidence and make it more likely they will buy your product.

What Are the Drawbacks of Seller Central vs Vendor Central?

As many benefits as Seller Central and Vendor Central offer, they each have their own set of drawbacks that you should be aware of.

By contrasting the positives with some of these negatives, you’ll have a more balanced view on which interface best fits your business needs.

Seller Central Drawbacks

High Overhead

With complete control over your product listings comes complete responsibility for your stock maintenance, customer support, shipping, etc. While you can enroll in the FBA program if you’re not selling enough, you may be paying way more in overhead than the service is worth to handle everything until sales pick up.

Basic Product Pages

Unfortunately, if you’re not a Vendor you can only create basic product pages with basic descriptions and you miss out on longer, narrative descriptions, detailed product videos, and comparison charts.

Fierce Competition

Amazon sells well over 300 million products on their platform which creates a fiercely competitive environment for a new seller as much as an established one. You might even start competing with Amazon directly – if they observe a high-performing retailer, they’ll go directly to their manufacturer or distributor and buy wholesale and sell it themselves through Vendor Central if they can.

Vendor Central Drawbacks

Long Wait Times for Payments

Vendor Central pays its sellers after at least 60 days, but they could hold payment all the way up to 90 days, which can obviously hurt if you’re suffering from low cash flow.

Violations of MAP Pricing

Amazon has made it very clear that they don’t adhere to Minimum Advertised Prices and allow retailers, including themselves, to sell products below the manufacturer’s MAP requirements, which can cut into your profit margins if they decide to sell lower than yours.

Poor Seller Support

While 3rd party sellers have access to quick and easy support—since they’re required to manage their own listings—a 1st party seller has very little oversight or input into their product listings. Everything needs to be approved by your account manager, and if you’re not paying for Vendor Central’s extra services, you probably won’t receive preferential support treatment.

What’s The Difference Between Vendor Central vs Vendor Express?

Amazon’s Vendor Express program allows anyone to become a Vendor without being asked to join Vendor Central. It’s very similar to Vendor Central with a few key differences.

Since you may or may not be invited to Vendor Central, but still want to benefit from selling wholesale to Amazon, here are a few key benefits and drawbacks you should know about Vendor Express.

Benefits of Vendor Express

Pay nothing for your products to be warehoused by Amazon.
No wait to get started since it’s open to all sellers.
High turnover rates – so if you have a hot-selling product it could sell even faster through Vendor Express.

Drawbacks to Vendor Express

Net 90 payment terms.
You can only sell 85 items, while Vendor Central offers unlimited product listings.
Amazon is in complete control of how much they sell your products for.

So… How Do You Choose Between Seller Central vs Vendor Central?

If you’re a smaller brand that needs absolute control over your pricing and shipping to maximize growth, then Seller Central is right for you.

If you’re a bigger/quickly growing brand that wants to move a lot of product while letting Amazon manage just about everything for you – go with Vendor Central.

Regardless of which interface you choose, though, you’re going to need an effective system for managing your stock and inventory levels in order to be successful….

Ready to Optimize Your Amazon Business?

With seamless integration of your product listings with Amazon’s marketplace, automatic tracking of your sales, stock levels, and revenue, the right cloud-based inventory management software is an essential tool for the retailer or wholesaler who wants to have complete control over maximizing ROI and growth on Amazon.

Start your free 14-day trial of DEAR Inventory today!

Try DEAR for Free

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10 Tips to Thrive with Online Wholesale

Posted on April 29, 2017 by

Increase profit in online wholesale

Thinking about expanding your business by getting into online wholesale?

It can be a scary and stressful venture at first. The downside is that selling wholesale online requires a bit more knowledge and up-front effort than cold-calling or setting up your booth at a tradeshow.

The upside is that once you get going, it’ll be much easier to win new customers, grow your business, and automate your sales.

To help you get started, here’s our list of 10 tips for online wholesale success.

1. Make It Easy for Your Customers to Buy from Your Website

If you want to streamline your wholesale business through online sales, you’ll want to start by optimizing (or creating) your ecommerce website. This means making it as easy as possible for customers to find your products, learn enough to decide to buy, and ultimately place an order with you.

Here are a couple things to keep in mind:

Offer a secure checkout experience by integrating your website with a top online payment processor that includes industry standard encryption.
Accept multiple forms of payment (various credit cards, Paypal, etc.) to allow customers to use their preferred method.
Collect the minimum amount of information needed to process and fulfill the order; name, email, and delivery address will all be required, but fewer details to enter means an easier process and more sales.
Make your site mobile responsive so that any customer, anywhere can buy from you easily.

Getting these right will ensure your customers trust you and are confident when buying from your business.

For a few more tips on streamlining your online wholesale system, check out this list from KissMetrics on making the payment process easier.

2. Join Multiple B2B Ecommerce Marketplaces

A huge part of maximizing your online wholesale efforts is utilizing sales channels beyond and in addition to your company website. Online B2B marketplaces allow you to quickly set up shop on platforms with existing traffic and customers, so you can quickly find new business and expand your reach globally.

Consider both specialty markets like Joor, which targets fashion buyers and sellers, as well as general markets like Wholesale Central.

Check out our post about online wholesale marketplaces to learn more about expanding your online sales channels.

3. Compare Your Prices to Your Competitors

The broader online wholesale marketplace makes it easier than ever to “spy” on your competitors and their pricing strategies. Though most businesses offer wholesale prices at 40-60{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of MSRP, researching your market and industry’s exact pricing structure will help you stay that much more competitive.

And wholesalers often choose to create tiered prices for different quantities of stock ordered; for example, you might sell large quantities of t-shirts like this:

100 units at $12.50/each
500 units at $10/each
1000 units at $8.75/each

While there are all sorts of complicated calculations you can do to figure out exactly what you need to charge to remain profitable, especially if you’re a new company, observing your competition, matching and testing out their strategies yourself, and adjusting accordingly is a solid way to get going quickly.

4. Enforce Minimum Orders

A key to profiting at wholesale rates is to require minimum order sizes in order to leverage economies of scale in your favor.

With minimum order sizes, you’ll be able to generate enough cash flow and leverage large volume efficiencies, even at relatively large discounts compared to retail.

There is one exception to this rule…

If you’re a new wholesaler trying to eager to generate new business, consider offering smaller “sample” orders on a one-time basis. This will go a long way in selling customers on the quality of your products while still generating some much-needed cash flow.

And after a sample order is placed, your job is to provide fast fulfillment and excellent customer service to solidify the relationship and create repeat customers – for whom you can and should enforce minimum orders.

5. Offer Dropshipping to Your Customers

Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to you the wholesaler, at which point you ship the goods directly to their customer.

It can be an intimidating process if you’ve built a wholesale-only business, but it’s a good strategy for finding new customers through existing channels when you seem to be hitting a market saturation point.

If you’re interested in pursuing this business model, here’s a great guide to dropshipping from Shopify to help you get started quickly.

6. Earn High-Quality Testimonials

Building trust is essential for all B2B businesses and even more so in the early growth stages.

And social proof is one of the most powerful and achievable ways of quickly building trust with your potential customers.

Enter the testimonial.

From ratings and reviews on ecommerce sites like Amazon or eBay, to snippets of customer comments strategically placed around your calls to action, testimonials are a great way to show those on the fence that you deliver on the promises you make about your products and service.

The easiest way to get a testimonial is by sending a well-timed email to your customers simply asking for one. Allow them time to sell your product and get feedback from their customers in turn, so they’ll be glad to give you a great comment.

Then, send them either a brief survey using tools like Google Forms or Survey Monkey, or ask them to drop a review on a relevant website to make giving that feedback as easy as possible.

To learn more, check out this excellent post about the foolproof method for getting testimonials.

7. Take Excellent Photos of Your Products

If you’re selling physical products online, it’s essential that you help your potential customers understand what your products are like without relying on in-person experiences.

Though, as we mentioned above, you could offer sample orders to get your products into interested hands, this adds a lot of overhead that may be avoidable with the right kind of content.

The most important pieces of product info you can provide are high-quality, comprehensive photos of your products.

To maximize your chances of making the sale, invest in professional photography with simple backgrounds to showcase the best qualities of your products from all angles; offer close-up shots, display your product next to another item to show it’s dimensions, and even consider using a model to wear, hold, or use your product – whatever’s necessary to give potential customers a complete picture (pun intended) of your product before they buy.

More than anything else, great photos of your products will help your prospects and their customers visualize and understand your product making them more likely to buy from you.

8. Write Exciting Product Descriptions

Your product photos will attract interested buyers, but your descriptions will close the sale. To really convince a retailer to carry your product, focus on the benefits your product provides to them and their customers.

How will your products help them stand out from their competition and make more sales?

How will it make their customers lives better, more interesting, more fun?

How will it solve their customer’s problems and pains or help them fulfill their dreams?

Of course, make sure to include relevant features and technical specs like height, weight, different color patterns available, etc.; the more detail the better – be sure to provide all the information customers might want or ask for to maximize your chances of convincing them to buy.

9. Build High-Quality Relationships

Long-lasting businesses are built on long-lasting relationships. And to build these high-value relationships, excellent customer service is essential.

Here are a few things to keep in mind to help you deliver the kind of services that boosts retention rates:

Allow buyers to reach you directly through email
Create an FAQ to counter common objections and answer common questions
Reply to inquiries promptly
Respond to complaints quickly
Go the extra mile to solve customer problems and make them even more willing to do business with you again
Create incentive programs like special pricing for repeat customers

By fostering long-term partnerships with every retailer you work with, you’ll make it easier for them to do business with you – and that much harder to switch to your competitors.

10. Use Modern Inventory Management Software

Since you’re housing product to sell through multiple channels, you’ll need a way to limit the waste that comes from disorganization in order to efficiently scale and maximize profitability.

And the key to operating a streamlined and efficient online wholesale business is inventory management software – which will help you track sales, collect data from all of your sales channels and business apps in one place, generate reports on inventory levels, sales figures, and more, as well as easily manage a high-volume of orders.

Ultimately, with the right inventory management software, you’ll be able to integrate and automate your online wholesale business to reduce the stress of manually tracking inventory and sales, eliminate human errors, and make it just a bit easier to start and grow your business.

Ready to Accelerate Your Online Wholesale Business?

Experience the full benefits of cloud-based inventory management software can provide your online wholesale business.

Start your free 14-day trial of DEAR Inventory today!

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7 Online B2B Marketplaces to Grow Your Wholesale Business

Posted on April 22, 2017 by

Online B2B Marketplaces are a great way to expand your sales channels!

As with just about every type of business, the combination of the internet and other technologies has made it easier than ever to start and/or grow a wholesale business.

And whether you’re a manufacturer looking to quickly and easily distribute your products, or a distributor looking to expand your sales channels, online B2B marketplaces provide a great opportunity for expansion at little additional investment.

But are they the right choice for you?

Sales Calls: The Old (and Expensive) Way of Doing Business

It used to be that making a sale meant having boots on the ground – a team of salespeople making calls and visiting potential customers to pitch your business and products.

And while we’re all about making business easier through modern technology here at Dear, we’ll admit there’s definitely a place for the good old-fashioned cold call.

But for most business, it’s an unnecessarily expensive path to revenue.

The Keller Research Center at Baylor University conducted a study with 50 highly trained and qualified salespeople that backs up this point.

During the study, they had the salespeople make a total of 6,264 phone-based cold calls over a two week period.

Can you guess how many appointments they ended up with?

19.

19 appointments out of thousands of calls; and that’s just to pitch the potential customer, let alone turn that appointment into a purchase order.

What does this mean for your business?

It means your team could potentially be spending fruitless hours chasing leads only to end up with nothing – and if that’s the only method you’re relying on to generate sales, you’re losing customers to your more savvy competitors.

If You Build It They Might Not Come… So Go Where They Are!

And they’re online!

The Internet Retailer 2016 Top 500 Guide revealed that the 26 retailers who disclosed their sales from online marketplaces brought in $455.5 million, or 14.4{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their total $3.17 billion in revenue for 2015.

And those online sales are up 42.9{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} from $318.8 million worth of goods sold in 2014 for the same 26 retailers.

But there’s more.

A 2016 survey by comScore and UPS found that consumers are now buying more products online than in stores.

The survey polled more than 5,000 consumers who made at least two online purchases in a three-month period. According to results, shoppers now make 51{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their purchases online, compared to 48{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} in 2015 and 47{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} in 2014.

And, roughly 190 million U.S. consumers – more than half the population – will shop online this year, according to Forrester Research.

So we know more consumers are shopping online, meaning more retailers are selling online.

Is it possible those same retailers want to take advantage of the convenience of online shopping their customers enjoy?

You bet.

Selling Wholesale to Online Retailers?

But the “name brand” online marketplaces are geared towards consumers – companies like Amazon, Wayfair, Etsy, and eBay generate the overwhelming majority of their sales from retail (though that’s starting to change, eBay and Etsy have now launched wholesale channels).

And sure, you can build your own B2B ecommerce website, which is a great idea.

But driving traffic to your website takes a lot of work and if you’re not already ranking in search engines, thousands of potential customers looking for your products right now aren’t going to find you.

That’s where online B2B marketplaces come in.

These specially crafted ecommerce sites are all about connecting wholesalers, distributors, and retailers so they all can benefit from buying and selling online.

They make it possible for buyers around the globe to find your products and sell them in their businesses, all you need to do is position yourself in front of them.

And unlike calls during business hours, they’ll let you make sales and generate leads 24/7.

But how do you find these online B2B marketplaces?

Well, right here in our list below!

Grow Your Wholesale Business with These 7 Online B2B Marketplaces

Here are a few marketplaces we recommend to help get your search started:

Uppler

Uppler is a powerhouse B2B marketplace that offers a lot of impressive features and different marketplaces for a variety of industries.

When you join they’ll let you:

Create an online “showroom” when you sign up to display your products.
Invite clients and prospects to access your showroom and give them custom made catalogs or newsletters.
Discover which of your products are the most popular.
Create line sheets and pre-populated purchase orders to send to any clients.
Track all your wholesale orders in one, convenient place.

Joor

Joor is the go-to fashion and home goods B2B marketplace.

And in processing over $7 billion in orders every year, they offer a huge opportunity to grow your revenue.

Features include:

Capture orders online or offline
Create permission-based access across reps in different territories
Sell your product in multiple currencies
Real-time reports you can manage on your phone or tablet
An account specialist to walk you through API integration, or anything else you need help with

Amazon Business

Amazon is the titan of online retail and not looking to miss out on an opportunity, they created Amazon Business to enable B2B ecommerce for small businesses and massive enterprise alike.

When you sign up, you’ll create a business profile complete with your logo and company story, and other perks like:

Access to pricing customization tools that are only visible to business customers.
Lower fees on large business transactions in specific B2B categories.
Enhanced product listings with CAD drawings, user guides, and more.
All at the same (or lower) costs as selling retail.

Alibaba

Alibaba is the Amazon of online B2B marketplaces, connecting B2B buyers and sellers in more than 240 countries and regions around the globe.

With a variety of membership levels and value-added services, they offer features like:

Priority Ranking according to membership level
Unlimited Product Posting (for paid memberships)
Product Showcases to help your wares stand out
The ability to quote Buying Requests placed through their Sourcing portal
Verified Seller Icon (again for paid memberships)
Customized Website to display company awards, photos, and videos
Personalized Customer Service for premium package suppliers

FGM Vendors

FGM Vendors is an online wholesale marketplace that acts like a virtual tradeshow for your business.

When you join, you’ll get a professional listing that includes information about your business, photos of your best products, and contact forms that make it easy for potential buyers to reach out.

Additional features include:

List your business and products in as many categories as you’d like
Monthly reports on traffic to your listings
Robust advertising services featuring your ads in hundreds of places across their site, including their homepage
For an additional fee, you can become a Featured Wholesaler and get access to perks like zero pay-per-click fees and preferred placements

Shopify

Shopify has generated over $29 billion for more than 377,500 businesses, and they now offer a wholesale marketplace of their own to connect you with the thousands of retailers using their platform.

It’s fast and easy to sign up – simply fill out this questionnaire and they’ll start emailing you requests from retailers interested in purchasing your products.
Create a customized store using their gorgeous themes.
Easily track sales and growth trends.

Wholesale Central

Wholesale Central has been the largest wholesale directory since 1996 and they make it clear up front – their online marketplace is designed for B2B only, no consumers.

For one low fee, they’ll connect you with thousands of retailers in their “Buyer’s Network” and give you access to features like:

A free ecommerce storefront and software
Unlimited traffic to your storefront
Free promotions in their “Deals and Steals” section
All new members are featured in Independent Retailer Magazine, which reaches over 125,000 independent retail store owners, kiosk operators, distributors, and other wholesale merchandise buyers

Wrapping Up and Ready to Ship

These are just a few of the many online B2B marketplaces out there, but together they offer plenty of opportunities to quickly and easily start reaching more customers.

Now if only there was a way to help you efficiently manage all the new orders you’re about to get…

Grow Your Wholesale Business with Better Inventory Management

Automate and integrate your business systems and sales channels with our easy-to-use inventory management software.

Get started with your free 14-day trial of Dear Inventory today!

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