Choosing a Direction After Amazon Vendor Express

The Amazon wholesale program Vendor Express is retiring, but what does that mean for all current users? If you have a Vendor Express account, you should have received an email from Amazon informing you that beginning on May 21, 2018, Amazon will stop placing purchase orders. On January 1, 2019, they will be closing all Vendor Express accounts.

Why is Vendor Express Retiring?

There is lots of speculation out there as to why Amazon has closed Vendor Express. I have heard comments such as: Is it the end of the era for vendors? Is Amazon no longer making money on the retail side? “After careful evaluation of our selling programs," said Amazon in an email, "we have decided to retire Vendor Express in an effort to refocus the business toward other selling tools.”

I was not surprised about this announcement. When Vendor Express launched, the goal was for it to be a self-service tool similar to Seller Central, but for vendors. However, over the years Vendor Central (the main system used by vendors) has become more self-service, naturally making the role of Vendor Express redundant. Alongside that, Vendor Express became a loophole for sellers to get access to features such as A+ content and Amazon Marketing Services (AMS) advertising opportunities like Headline Search Ads, Product Display Ads, and brand pages. Sellers would open Vendor Express accounts, listing products but not fulfilling any purchase orders just to access these tools.

Today, most of these features are now available in Seller Central, creating less demand to open Vendor Express accounts. With Seller Central and Vendor Central both evolving, Vendor Express no longer provides Amazon or its customers any additional value to these selling programs already available.

Action Items for Current Vendor Express Users

You may be wondering what steps you should take if you are a current Vendor Express user. Here are my recommendations:

1. Decide on an alternative selling program

Amazon is pushing Vendor Express users to open an account in Seller Central. Some will already have an account with a hybrid model and others will be completely new to this. Setting up a Seller Central account is easy and the whole process is self-service.

One thing Amazon is not doing is redirecting Vendor Express users to Vendor Central. Vendor Central is an invitation-only program. While brands can ask for a Vendor Central account by going to Contact Us on Vendor Central, there is no guarantee Amazon will respond. If you as a brand had a strong business both in sales and profit via Vendor Express, Amazon may have already requested that you move to Vendor Central. For businesses where sales were relatively small and with tight profit margins, Amazon would direct them to the seller side of the business. For more information on choosing the right selling program on Amazon, take a look at the Seller, Vendor, or Hybrid eBook, which looks at the pros and cons of each sales approach.

2. Transition over to Seller Central or Vendor Central

Vendor Express users transitioning over to Seller Central will take on a new role as a retailer and no longer a wholesaler. They will own their own content, set their own retail prices, manage their inventory, and handle customer services. They will need to monitor pricing to win the Buy Box, monitor inventory to avoid out-of-stocks and overstocks, handle customer orders and respond to customer messages, which are tasks that Amazon would have previously managed on the vendor side. Although if they decide to sell through the Fulfillment by Amazon (FBA) program, Amazon will manage the orders, customer service, and returns on their behalf. The seller account must also be monitored regularly to ensure all the required performance metrics are met; Amazon is less lenient on the seller side. If a seller doesn’t hit their performance targets or adhere to Amazon’s policies and guidelines, they can expect to have their account suspended.

Vendor Express users transitioning over to Vendor Central will see less change as they remain wholesalers. Vendor Central will give Vendor Express users access to more features and tools. Vendor Express users need to be aware that Amazon will require them to agree to a number of allowances such as damage allowance and marketing development funds, which are additional discounts off of costs and must be built into their cost calculations to remain profitable. Amazon is also a lot stricter on Vendor Central when it comes to order management and shipping; vendors have to familiarize themselves with the guidelines to ensure they do not get stung with chargebacks.

3. Amend ads in Amazon Marketing Services (AMS)

Vendor Express users will still be able to access AMS, but some features will no longer be available. Amazon stores, Headline Search Ads and Product Display Ads linked to the Vendor Express account will continue running. Sponsored Product Ads will no longer be an option.

If you are moving over to Vendor Central, your AMS account will continue as is, including Sponsored Ads. If you step over to Seller Central, you will need to set up your Sponsored Product Ads from your seller account. To access Headline Search Ads on the seller side, brands need to have a registered trademark enrolled in the Brand Registry. While you can continue to run your Headline Search Ads in AMS, it is recommended that you gradually move these over to Seller Central to effectively manage everything under one account. This should not be done immediately. Your current Headline Search Ads should continue running in AMS and you should set all new ones up in Seller Central and gradually transition over. Switching off Headline Search Ads completely will impact the momentum generated on those ads and traffic/sales. Product Display Ads are not currently available in Seller Central and so brands should not completely close their AMS account to access these. For ads that continue to run in AMS, make sure the payment method is set to credit card and not deduct from payment to avoid any disruption to the ads.

It's recommended that you gradually move these over to Seller Central to effectively manage everything under one account. This should not be done immediately. Your current Headline Search Ads should continue running in AMS and you should set all new ones up in Seller Central and gradually transition over. Switching off Headline Search Ads completely will impact the momentum generated on those ads and traffic/sales. Product Display Ads are not currently available in Seller Central and so brands should not completely close their AMS account to access these. For ads that continue to run in AMS, make sure the payment method is set to credit card and not deduct from payment to avoid any disruption to the ads.

4. Manage any outstanding payments

Vendor Express will no longer accept invoices beginning on June 30, 2018. Vendor Express users need to ensure all invoices have been issued immediately and that any discrepancies and disputes have been managed before this date to ensure full payment is received. Although vendors will still have access to the tool until January 1, 2019, users will only have read-only access beginning on July 1, 2018.

5. Enroll trademark in the Brand Registry:

Brands transitioning over to Seller Central that have a registered trademark should immediately enroll themselves in the Brand Registry. This will grant them access to features that were previously available to them in Vendor Express: Enhanced Brand Content (EBC), Headline Search Ads, and Brand Stores. It also gives brands greater control over their product listings. Note that when Vendor Express retires, the listings currently in the retail catalog will be suppressed, making it possible for brands to manage and edit their listings in Seller Central. Vendor Express users that don’t have a registered trademark should consider registering one for their brand to not only access these features but protect the brand from any potential intellectual property rights violations.

Take Action Now

With Prime Day approaching this summer, Vendor Express users should be moving quickly on getting an alternative selling program sorted on Amazon. The sooner they do this, the smoother the transition. Sales velocity won’t be greatly impacted if the products remain in stock throughout the transition period. The key is getting the items listed and in stock in another selling program while Amazon still has stock to avoid any out-of-stocks and disruption to sales.