As the largest eCommerce platform worldwide, Amazon is currently helping nearly 2.7 million sellers reach over 300 million customers across 180 countries.
Selling on Amazon offers several perks to businesses, including increased brand awareness, higher buyer retention, and more sales. It allows sellers access to an enormous audience, facilitates swift scaling, and equips their performance with useful tools.
Amazon Vendor Central empowers businesses with extensive advertising, digital marketing, enhanced product listings, and account management services.. This platform is regularly upgraded to extend the seller’s capacity and improve the buyer’s experience. Businesses not only need to capitalize on this opportunity but must also keep up with the changes to extract the highest possible utility.
This article discusses Amazon Vendor Central and lists four critical aspects of this interface, along with their respective updates so far in 2020. Take a look!
What Is Amazon Vendor Central- A Brief Introduction
Amazon Vendor Central is an invite-only seller portal. Using Vendor Central puts you in the category of first-party sellers. Your business supplies products to Amazon, who in turn, sells and ships the product to the end-user. It is different from Seller Central, wherein businesses act as third-party sellers and directly transact with the end-users.
Typically, Amazon invites brands offering highly-demanded products or a strong market presence to its vendor program. Amazon also picks sellers with unique products from fairs and trade exhibitions.
The prominent benefits of using Amazon Vendor Central management services include:
- Products are displayed with the “shipped and sold by Amazon” tag.
- First-party sellers gain more consumer traction due to direct association with Amazon.
- Brands who qualify for Amazon Vendor Central get extended advertising and marketing services
- Simpler operational processes
- Access to premium and enhanced content features
- Opportunities to utilize various promotional programs like express reviews, subscriptions, etc.
However, a professional Amazon Vendor Central consultant can help you learn more about how to leverage these benefits.
- Amazon changes product prices as per their internal analysis-Vendor brands can end up with lower margins.
- Businesses that choose to rely entirely on Amazon can face a loss of revenue in several circumstances. For instance, if Amazon decides to stop buying from them for some reason.
- Vendors get very little price control.
- Failing inventory or order fulfillment for any reason can lead to penalties and chargebacks.
Therefore, it is recommended to consider Amazon Vendor Central as a trade-off. While you will get a chance to increase revenue by selling directly through Amazon, there will be restrictions that might or might not work for you. The outcome for any business enrolled in Amazon vendor central would depend on adopting and implementing the right strategy.
Quick Note-Vendor Central and Fulfilment By Amazon Are Different
Considering how the nature of both vendor central and FBA is somewhat similar, mixing them up is a common mistake that sellers often make.
However, there are stark differences between the two.
Seller central users choose FBA to get support from Amazon for packing, storing, shipping, customer service, warehousing, returns, etc. But, they retain all other responsibilities of the seller, i.e., the retailer, like setting the price, etc. On the other hand, in a Vendor Central arrangement, the brand acts as a wholesaler while Amazon acts as the retailer. Amazon sets the price and is responsible for the sale while a brand only supplies the required product to Amazon.
Amazon Vendor Central Updates in 2020- What You Need to Know
1. The Pricing
The fee sellers pay to Amazon for its Vendor Central management services are called allowances. They can be paid in many forms and are open to negotiation at the time of discussing terms. Amazon also reviews vendor central contacts every year, so businesses get a chance to review their allowance agreement annually.
| Market Development Fund | Varies between 5 to 15% Charged for management and support services carried out in the background |
| Freight Allowance | Varies from 2 to 3% Charged for picking and moving stock between fulfillment centers |
| Damage Allowance | Varies between 2 to 3% Can be higher on items that aren’t easily restocked on return Charged for damaged goods that need testing before being restocked or that can’t be restocked |
| Fee for Amazon Marketing Services | Amazon marketing services have varying costs, built on a PPC model. |
| Premium Retail Analytics Allowance | Amazon’s analytics tool has a basic model as well as a premium one. Previously, the premium module cost $30,000 a year. Now, it’s free to every business that’s enrolled in the Amazon Brand Registry. |
| Region-Specific Taxes | The vendor is responsible for country-specific taxes like VAT, GST, etc. |
| Chargebacks | Chargebacks are penalties for mistakes, like poor wrapping, missed label, unstocked inventory, failure to supply, etc. |
2. Amazon Marketing/Advertising Services
Amazon Marketing Services, now known as Amazon Advertising, is a set of intuitive and simplified advertising solutions. Accessible to Amazon sellers and vendors, this effective tool helps you drive sales and boost your brand’s awareness on Amazon seamlessly.
However, sellers and vendors can use these tools in different capacities.
| Seller Central | Vendor Central |
|---|---|
| Two types of advertising services available- Sponsored Product Ads Sponsored Brand Ads |
Three types of advertising services available- Sponsored Product Ads Sponsored Brand Ads Product Display Ads |
| Only keyword-based ad targeting is possible. | Targeting can be based on keywords, audience interests, shopping behavior, and product popularity. |
| Ads are created within the Seller Central interface. | Vendor brands use the AMS interface(Amazon marketing services) to create ads. |
Amazon advertising is an impactful tool for eCommerce businesses. By 2023, Amazon advertising is expected to reach a projected market share of 14%. That figure says volumes about the growth of AMS in upcoming times, as well as the significance of using it for vendors.
Additionally, Amazon Advertising has produced enough success stories that a vendor can’t miss capitalizing on the opportunities it presents.
- Quest Nutrition used Amazon’s OTT(Over-the-top Video) to reach and deliver relevant content to unique audiences.
- The Hershey company worked with Amazon advertising, OTT, and exclusive ad inventory to engage relevant audiences and drive brand awareness.
- Jessica Alba’s The Honest Company witnessed a 39% higher ad-spend return. Their OTT impressions also led to a fivefold increase in product detail page views.
This is clear that Amazon advertising is standing strong this year. It has equipped businesses across industries to get significantly enhanced profits and yet helping newly-emerging businesses continually.
3. Premium Enhanced Content
A+, or Enhanced Content, is an Amazon offering that allows businesses to engage the customers with interactive, rich, and creative details.
Until July 2019, A+ content was a vendor-specific feature only. Seller-central had access to a very limited version of the same, called Enhanced Brand Content. In the 2019 merger, A+ became available to all sellers and vendors enrolled in Amazon Brand Registry.
However, the premium A++ content service is still only available to selected Amazon Vendor Central users.
You get two management options. You can design the content and layout yourself or pay Amazon to do it. This module-based feature lets you design product detail pages with creative freedom. The premium version includes text, videos, images, comparison tables, slideshows, hotspots, etc.
| A+ Enhanced Content | A++ Premium Enhanced Content |
|---|---|
| Available to all vendor-central users and sellers enrolled in Amazon Brand Registry. | Invite-only service available to selective vendor central users |
| Offers 12 modules for content placement | Offers 16 interactive modules and 12 basic modules |
| 5 modules in a product page | 7 modules in a product page |
| Free to use | Charges fall between $250K to $500K |
| Believed to increase conversion rates anywhere between 3-10%. | Believed to increase conversion rates up to 15%. |
4. Retail Analytics
The Amazon vendor central portal offers two analytics tools- Amazon Retail Analytics Basic & Premium.
Up until February 2020, all vendors had to either use the limited Basic analytics tools or pay $30,000 a year for the extended Premium version. However, Amazon recently made ARA data free for all vendors without any official announcement. The consensus seems to be that most vendors associated with Amazon Brand Registry can access ARA Premium for free right now.
It is yet to be determined how far or wide this update has reached. However, if the update persists, vendors will get a lot more data to study, infer from, and work on.
| ARA Basic | ARA Premium |
|---|---|
| Free | Free now. Earlier, $30,000 annually. |
| Weekly reports | Daily reports |
| Country-level data | Data by Postal-codes |
| No access to history | Historical data up to one previous year |
| Services:Sales and traffic diagnostic Inventory health Inventory and forecast planning |
Services:Sales & traffic diagnostic Real-time sales Geographical insights Net PPM Sales performance trends Preorders Inventory health Inventory and forecast planning |
Use These Amazon Vendor Central Updates to Drive Higher Performance
Amazon is constantly changing to become more customer-friendly while streamlining its operation. Businesses must catch up on time if they want to stay ahead of the competition and generate excellent revenue.
Keep yourself informed about every Amazon update, be it vendor central advertising, product display ads, retail analytics, or premium content. At the same time, seek out competent consulting and management services to improve productivity and efficiency through expert assistance.
We Can Help!
Boost your revenue and streamline your vendor account’s operations with our support. Data4Amazon offers a broad range of Amazon vendor central management services, from marketing, inventory, premium content creation, etc. With a team of expert consultants and the latest information, we help you stay ahead of the rest.
To know more about how our services can help your Amazon business, write to us at info@data4amazon.com.