A few weeks ago, Amazon announced yet another purge of Vendor Central accounts, sending an alarming message about the cancellation of their relationships with vendors by November 9, 2024. Many sellers have reported receiving the following message, which included:
“Hello,
We’ve made the decision to stop sourcing products from your company as part of our regular review of product offerings, and a strategic realignment to optimize our operations and better serve our customers.
Effective November 9, 2024, our vendor relationship will be terminated. We won’t enter into any new agreements, or extend current ones, beyond this termination date.
If you’d like to continue selling your products on Amazon, we welcome you to list your items as an independent seller. As a seller, you’d maintain access to the same customer base. You could also choose from fulfillment options, as well as a range of tools and services designed to fit your business needs and support your continued success.
If you don’t have a seller account, you can sign up today. We appreciate your support during this transition, and thank you for your understanding. Contact us if you have any questions.
The Amazon Vendor Central Team.”
The change occurs just weeks before the important holiday shopping period, as vendors prepare for Amazon Prime Deal Days in October, Halloween in November, and Black Friday/Cyber Monday in December. As a result, several brands are about to lose access to the Vendor Central program, which has been a major source of revenue for them.
Why is Amazon Choosing to Terminate Vendor Central Agreements?
The reasons behind the decision remain unclear, but our suggestion is that
Amazon simply finds third-party FBA sellers more profitable and aims to shift smaller vendors to Seller Central. Firstly, in contrast to 1P accounts where Amazon handles most of the logistics and marketing, third-party sellers manage the logistics, marketing, and advertising all on their own. Not to forget that 3P sellers incur fees for a wide range of Amazon services, including fulfillment and advertising, which generate multiple revenue streams for the platform.
Also, by minimizing the number of small suppliers, Amazon likely intends to simplify its processes, which would help them dedicate resources to larger brands and increase their profit margins.
Lastly, Amazon reduces its inventory risk exposure associated with holding stock. When Amazon functions as the seller for products, it assumes ownership and suffers the risk of retaining this inventory, especially during possible economic challenges. It is possible that Amazon is working to balance this risk by controlling the volume of inventory it maintains on its balance sheet.
This shift reflects Amazon’s evolving approach to brand management, prioritizing efficiency and focusing on substantial partnerships with major brands rather than small ones.
What Does It Mean for Vendors?
The exact same situation took place just a few years ago when Amazon purged many smaller Vendor Central accounts, encouraging them to move from the 1P wholesale model and operate as 3P sellers, managing their own fulfillment, pricing, promotion, and customer service.
Unfortunately, the implementation of such an idea is certainly more challenging than it sounds.
For vendors, particularly those accustomed to Amazon’s 1P model over the years, this transition introduces several difficulties. A switch from Vendor Central to Seller Central requires more than just a simple business process change — it demands a fundamental transformation of business operations on the platform as a whole.
If you happen to be one of those sellers whose Vendor Central account is about to get closed, our specialists are ready to assist you with a seamless transition to Seller Central. Once you’re all set up, we can additionally offer specialized services to help you optimize your listings, manage advertising campaigns, and ensure a successful transition to ASC
How to Move your Business from Vendor Central to Seller Central?
For 1P vendors looking to switch to 3P, here’s a list of steps you need to take to successfully transfer your business to Amazon Seller Central:
Step 1: Understand the Difference Between Vendor Central and Seller Central
The key distinction between Amazon Vendor Central and Amazon Seller Central lies in who is responsible for selling your products.
Opting for Vendor Central involves Amazon purchasing your products and selling them to its customers. In contrast, with Seller Central, you sell directly to customers via the Amazon marketplace. This provides you with more flexibility, control over pricing, inventory, and the opportunity to engage in more advanced advertising strategies.
Here’s a list of Amazon Seller Central Benefits:
1. Greater control over pricing
In Vendor Central, Amazon is the retailer and controls product pricing. In Seller Central, you handle sales and set your own prices.
2. Better Inventory Management
With Vendor Central, Amazon purchases your products in bulk and manages inventory risk. In Seller Central, you keep control over your inventory until it sells, using either Fulfilled by Amazon (FBA) or self-fulfillment (FBM).
3. Expanded Advertising Opportunities
Seller Central offers greater flexibility for advertising, product page enhancements, and listing optimization, which is a significant advantage, though it demands more time and expertise.
4. More Options for Logistics
Seller Central offers more logistical flexibility than Amazon’s Vendor Central. Vendors often face strict purchase order guidelines and costly chargebacks for stock issues, which can greatly impact their profits.
With Seller Central, you have the freedom to choose between Fulfilled by Amazon (FBA), Fulfilled by Merchant (FBM), or Seller Fulfilled Prime (SFP), customizing logistics to suit your business needs.
5. Enhanced Data Insights
Seller Central gives you access to a wealth of consumer data which you can access using well-known tools such as Brand Analytics, Customer Behavior Analytics or Seller Analytics Tools.
Step 2: Register for Amazon Seller Central
To start your transition, you’ll need to create a Seller Central account if you don’t already have one. Here’s a quick overview of how to do it:
1. Sign up for Seller Central
Visit Amazon Seller Central’s registration page and create your account. You’ll need to provide business details, tax information, and your bank account.
2. Choose Your Fulfillment Method
Choose between Fulfilled by Amazon (FBA): Amazon handles the storage, shipping, and customer service for your products, or Fulfilled by Merchant (FBM): you manage the storage, packaging, and shipping directly to customers.
3. Transfer Existing Listings
If you had product listings in Vendor Central, you can use Amazon’s listing tools or work with Amazon’s support team to migrate these listings to Seller Central.
4. Set Up Pricing and Inventory
Since you now control pricing and inventory, decide how you want to price your products and ensure you have enough inventory to meet customer demand.
Looking for a more detailed guide or you need help setting up your Seller Central Account? Visit our How to Start on Amazon page.
Step 3: Optimize your Product Listings
When transitioning to Seller Central, having optimized product listings is crucial. As a vendor, Amazon would take care of listings – now it’s your responsibility to do so.
We offer professional Listing Optimization Services to help ensure your products rank higher in Amazon’s search results and convert shoppers into buyers. Our services include:
1. Title Optimization: We craft product titles that are relevant, keyword-focused, and provide shoppers with essential information at a glance.
2. Enhanced Bullet Points and Descriptions: We create a crafted set of bullet points for your product, designed to beautifully accentuate its key selling points.
3. High-Quality Visuals: Leveraging Amazon SEO, we’ll enhance your product photos to showcase their benefits, usability, and convenience.
Want to make your products stand out, but lack high-quality images or videos? Refer to our Amazon Product Photography and Amazon Video services.
4. Backend Keywords: We’ll maximize your use of backend keywords to ensure your products are discoverable without keyword stuffing or risking a poor user experience.
And that’s merely the start. Learn more about our Amazon Listing Optimization and what other services we can provide to help your brand stand out.
Step 4: Leverage Amazon Advertising
One major benefit of switching to ASC is access to a broader range of advertising tools to promote your products. To maximize visibility and sales, you can use the following advertising options:
1. Sponsored Products
Sponsored Products are the most popular advertising option available on Amazon, because they don’t require brand registration, with 75% of third-party sellers using them. They resemble organic listing results and can appear at the top of search results, among organic listings, or on competitors’ product pages. A high bid secures top placement, maximizing visibility, while a low bid may prevent your ad from appearing.
Read more on our page dedicated to Sponsored Products.
2. Sponsored Brands
Formerly known as Headline Search Ads, Sponsored Brands are banner ads featuring your logo, tagline, and products, usually at the top of search results. Clicking these ads directs customers to your storefront or landing page, showcasing only your products.
Learn more about Sponsored Brands on our dedicated page.
3. Sponsored Display
Unlike Sponsored Products and Brands, Sponsored Display ads don’t focus on keywords. They target users based on interests, shopping habits, and visits to your product pages. Amazon tracks viewed products and re-displays them across its own website, competitor listings or external platforms.
Find out more about how Sponsored Display Ads can elevate your business.
Step 5: Brand Registry Setup
The program offers a brand direct management over all its detail pages and provides access to enhanced security features.
Moreover, it greatly enhances the seller’s marketing and advertising options, allowing you to make the most of Amazon’s platform. Brands that are registered receive access to A+ Content, Amazon Storefronts, Sponsored Brand and Display Ads, Amazon Posts, Amazon Vine, the Brand Catalog Manager, and a variety of other tools.
Struggling to meet Amazon’s Brand Registry requirements? Discover how we can Help Protect your Brand on Amazon.
Conclusion
The closure of your Vendor Central account may feel like a setback, but moving to Amazon Seller Central offers new opportunities for growth and control over your brand. Not to mention that many regard this as a favorable shift for third-party sellers, as it lowers the number of first-party vendors and redirects more business towards the marketplace framework, granting sellers more authority over their operations.
What we’re trying to say is, don’t view this change as unfavorable, but rather embrace the challenge and make the most of the new model that lets you handle everything your way. But, if that still looks like too much of a burden, you can always opt to our extensive list of Amazon services, including Listing Optimization, Advertising Management, and Reseller Services to ensure a smooth transition to Seller Central.
With extensive expertise in Seller Central, we will manage all aspects of your Amazon business, from inventory management to customer service, all while playing by Amazon’s rules.
