The Transition from Seller to Vendor on Amazon
by Liz Fickenscher, on May 31, 2018
Carina McLeod is an Amazon Retail Specialist and eCommerce Consultant. She worked at Amazon for 7 years in Vendor Management across multiple product categories. In 2013, Carina set up her own consultancy business eCommerce Nurse helping manage and support both Sellers and Vendors in growing their businesses on Amazon. In 2018, she launched Vendor Society, a membership website that provides vendors the tools and support they need to maximize their sales potential on Amazon. In this webinar, she talks about becoming a vendor on Amazon, tackling topics like:
- The vendor’s role on Amazon
- Product assortment
- Manage the possible impact on traffic and conversion
- Avoiding chargebacks
- Planning your transition
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.
The Transition from Seller to Vendor
As an Amazon seller, it’s a big deal to be invited to move over to Vendor Central. While exciting, the transition can come with more challenges than you might expect. It’s extremely important to consider all of the pros and cons before making such a major decision, especially if you are a private label seller.
Recently, Carina McLeod of eCommerce Nurse and Vendor Society shared her perspective regarding making the transition from seller to vendor in a webinar with Liz Fickenscher of eComEngine. Based on more than 12 years of experience working at Amazon.com, Inc. (“Amazon”) and with Amazon sellers, McLeod offered some valuable insight for anyone considering the leap. The entire presentation is definitely worth listening to but, if you’re short on time, here are some of the highlights.
Your Role as a Vendor
Amazon sellers act as the retailer and have direct contact with customers. This will change dramatically if you move over to Vendor Central. As a vendor, you will be the wholesaler while Amazon becomes your customer as well as the retailer of your products.
From that point forward, Amazon will make the decisions about the listing, including the pricing, and will be able to make edits to your content based on their guidelines and preferences. As a vendor, you will no longer have any influence over those areas of your business.
At the same time, you will be expected to be self-sufficient. While the top brands that generate millions in revenue will be given a Vendor Manager, small to medium-sized vendors won’t have access to that kind of support. You will need to know how to make use of the tools in Vendor Central without having much guidance.
One of the most important things to understand is that what worked on the seller side may not work on Vendor Central. Any new products that you’re still figuring out should be kept in your seller account until the sales velocity has increased. Amazon will only want to offer things with a proven track record and you don’t want to risk having something discontinued prematurely.
Low value items that have very little margin or dollar profit (when you factor in overhead and shipping costs) are poor choices for Vendor Central. Again, Amazon wants to make money. If, however, these are core products that your customers will be looking for, you can try to increase their value by offering them as multi-packs or bundles.
Impact on Traffic and Conversion
After dedicating many hours to getting the content and title of your items just right on Seller Central, you might be frustrated to discover significant edits when the product goes live on Vendor Central. This is because Amazon has become liable for those items and needs the descriptions to be as accurate as possible to avoid returns or low customer satisfaction. You will also discover that some product categories have stricter style guidelines than others. As a result, you may see a drop in your traffic and conversions.
Unlike sellers, vendors work off of the Amazon Marketing Services system. It can take a while for momentum to build so, during that transitional period, it’s important to work on campaign ads so that they are ready when the system starts to recognize the keywords associated with your products. You can also take advantage of the program’s Display Ads which can be used in a number of ways, including being placed on your own pages to block content from competitors.
No More Email Solicitation
Since, as a vendor, Amazon becomes your customer, you will no longer have any contact with buyers. This means that you also won’t be able to solicit reviews. While you have the option to subscribe to Vine, a trusted review program, it can be quite an investment. It might be worth it, however, if you’re introducing a new product.
Reviews are extremely important to sales and conversion, so it can be frustrating to relinquish control over this aspect of your business. Fortunately, you will still be able to interact with your audience on Amazon by responding to customer reviews and questions. This allows you to remain engaged and invested despite no longer being able to contact buyers directly.
Plan Your Transition
After discussing the transition from Seller Central to Vendor Central, McLeod stressed the importance of coming up with an effective plan. She offers great advice and insight which may be useful to those who are considering the move as well as those who have already taken on the vendor role.