6 Steps to Transitioning from Amazon Vendor to Seller
by Carina McLeod, on May 2, 2019
Following recent events when vendors found themselves without their weekly purchase orders, vendors are starting to think about a backup Amazon selling strategy. With a number of vendors being dependent on their vendor relationship, it has unsettled many knowing that Amazon.com, Inc. ("Amazon") could pull the plug any day. If it did, where would that leave their business?
Regardless of these events, a brand should never lay its eggs in one basket and be too dominant on one retail channel. A business should always spread risk. Perhaps that was a wake-up call for some vendors, highlighting the fact that every business needs a contingency plan when working with Amazon. Amazon changes its processes and policies like the British weather, and so vendors need to always be prepared.
The natural backup strategy for vendors is to have a seller account with Amazon. Some vendors may be looking to adopt a hybrid strategy, others may be looking to make a 100% shift from vendor to seller. That might be either out of choice or because Amazon made the recent decision to end their vendor relationship.
For those vendors new to the seller world, here are 6 steps you must take to get your seller business up and running.
Step 1: Open a Seller Central Account
The good thing is with Seller Central you don’t need an invite like with Vendor Central. It is self-service and anyone can open an account. It can take approximately one week to get set up as Amazon needs to verify certain documents, so make sure you take that into consideration when putting timelines together. Also, some categories require approval. You will be prompted if a product needs approval during the set-up stage, you can also review the list here. Each category approval request requires certain documentation, which varies depending on whether you are the brand owner, manufacturer or reseller.
Step 2: Enroll Brand in the Brand Registry
Brands that have a registered trademark should immediately enroll themselves in the Brand Registry, if they haven’t done so already. This will grant them access to features that were previously available to them in Vendor Central: Enhanced Brand Content (EBC) aka A+ Content, Sponsored Brands and Brand Stores, as well as additional features, such as the Early Reviewer Program. It also gives brands greater control over their product listings and protects the brand from any potential Intellectual Property Right Violations.
Step 3: List Your Products
Unfortunately, the seller and vendor catalog are not linked up. You will need to relist all your products into the seller account. In Seller Central you can list the items based on the barcode if they already exist on the website; but while this way is quick, we don't recommend it. You want to own the content, and to do that you need to be enrolled in the Brand Registry and have uploaded all the content in Seller Central.
Step 4: Decide How to Fulfill Orders
There are three different ways you can fulfill your orders on Amazon, and you’ll need to decide which one is best for your business. These are Fulfillment by Amazon (FBA), Seller Fulfilled Prime and Fulfillment by Merchant (FBM).
FBA allows you to send inventory to the Amazon Fulfillment Center. They manage the customer service, orders and returns on your behalf for a small fee. This is the most-used method with the best sales uptake as products become eligible for the Prime program and the shipping is free.
Seller Fulfilled Prime allows sellers to ship product directly to the customer from their warehouse and still be eligible for Prime shipping. This option helps businesses cut down on FBA costs. However, the seller has to prove they can ship according to Amazon’s requirements for this to be an option.
Lastly there is FBM, where the seller ships directly to the customer from their warehouse. Prime shipping is not enabled and so sellers selecting this option are often missing out on sales to Prime customers. FBM does work, however, for heavy, bulky products that make sense to ship directly to the customer to avoid double shipping charges and additional storage fees.
Step 5: Set Up Ads
Vendor and seller ads appear in different accounts. Vendor ads will appear under a separate Amazon Advertising account, while seller ads will appear within Seller Central. If you are moving the business 100% over from vendor to seller, you will want to copy over all vendor ads to the seller ads. If you are looking to adopt a hybrid approach, you will find yourself managing the ads between the two. Sponsored brands will run even if you are not winning the Buy Box. Sponsored products will only run if you are winning the Buy Box. This means if you are a seller winning the Buy Box but your sponsored product ad was set up via the vendor account, it will not run. Therefore, if you are switching between the two be sure to set them up in both accounts.
Step 6: Train the Team
Seller Central requires a more hands-on approach than Vendor Central. On the seller side, you control the retail, own the inventory, manage the customer service and handle the orders, if you decide to fulfill the orders yourself. If you decide to work with Amazon via the FBA program, this will help reduce the workload, but there is still a level of touch needed to manage the account. You must ensure the business is performing against Amazon’s performance metrics to avoid losing any selling privileges or even worse, account suspension.
If you are looking to move over to the seller side, make sure you tread carefully. If you are a large vendor account with a direct relationship with the vendor manager, they might not be willing to let you go without a fight. Be prepared to have a strong argument and avoid any direct competition that will only cause conflict of interest with the retail team.