17 Insider Tips for Amazon Vendor Central: Expert Insight for 1P Selling on Amazon
Feb 09, 20237 min read Nick Heethuis
In today’s fast-paced e-commerce world, selling on Amazon has become crucial to every brand’s sales strategy. The platform offers a vast audience of potential customers and the opportunity to reach a global market.
Amazon provides two primary ways to sell products – Third-Party (3P) and First-Party (1P) seller programs. 1P seller programs offer a direct relationship with Amazon, which has unique benefits and challenges.
I’ve helped successful brands manage and grow Amazon Vendor Central sales since 2017. In that time, I’ve gained valuable insights into the ins and outs of 1P selling on Amazon.
I’m sharing 17 insider tips with you in this article based on my hands-on experience working with Amazon daily.
Whether you’re just starting with 1P selling or an experienced vendor looking to improve your performance, this article will give you the inside scoop on everything from catalog management to annual negotiations with Amazon. By understanding these 17 key factors, you’ll be better equipped to succeed with your 1P Amazon strategy.
17 Insights for Amazon Vendor Central (1P)
- Amazon Takes the Reins: When you sell your products through Amazon’s Vendor Central program, you are selling directly to Amazon, not end customers. This means that Amazon controls the sales process, from setting the retail price to managing customer service and shipping. While this can be a double-edged sword, it’s essential to understand that Amazon’s expertise in these areas makes the platform attractive to many sellers.
- A New Label: When you become a 1P seller on Amazon, your products will now carry the “Ships from Sold by Amazon” label. This can be a double-edged sword, as it provides customers with the reassurance that their products are coming directly from Amazon. It also means that the customer’s experience will be tied to Amazon’s reputation.
- Invitation Only: Very few brands receive an invitation to join Amazon Vendor Central. This is because Amazon is selective about who they work with and want to ensure that they are working with brands that align with their values and can scale.
- Price Set by Amazon: One of the biggest challenges of 1P selling on Amazon is giving up control of your retail price. Amazon controls the pricing of your products entirely, which means that you will have no control over the final price that customers pay. This can be a significant disadvantage, as you may not be able to offer competitive prices. But it also means you don’t have to worry about constantly monitoring and adjusting prices.
- Be Nimble: Amazon can sometimes decide they are no longer interested in your products. This means they will stop selling them, and you have no control over this decision. This is why it’s essential to be agile and adaptable when working with Amazon and to be prepared for the possibility that they may stop selling your products anytime.
- Balancing Cost and List Price: It’s essential to get a handle on both the cost price and the list price of your products. You can recommend a list price to Amazon, but they will ultimately set the final price. Balancing these two prices is crucial, as you don’t want to price your products too high and make them unappealing to customers, but you also don’t want to price them too low and make them unprofitable.
- Requesting Price Changes: If you need to make changes to your cost price, be prepared for a waiting game. It may take weeks to hear back from Amazon on cost price increases or decreases, so planning and making these requests well before you need them is essential.
- Direct Fulfillment Drop Shipping: Even if you use your Direct Fulfillment Vendor Code for drop shipping, you will still be considered a supplier. This means that you will still be responsible for the quality and delivery of your products, but you won’t have to worry about managing the shipping process yourself.
- Catalog Management Challenges: Once a product is in your catalog, it can never be deleted entirely. This means you will have to keep track of your products, even if they are no longer in demand or profitable. This can be a significant challenge, especially if you have an extensive catalog, but it’s crucial to stay on top of it to avoid any inventory or logistical issues.
- Varying Self-Service Options: The available self-service options in your Vendor Central account may vary depending on your account type. Some accounts may have a broader range of self-service options compared to others, leading to frustration and difficulties in managing your catalog.
- Self-Service Headaches: Creating variations for your products and other seemingly simple tasks can often become headaches when working with Vendor Central. These tasks may require submitting support tickets, completing various templates, and waiting for a response from Amazon’s support team. This can be time-consuming and slow down the process of getting your products listed and ready for sale.
- Optimizing Your Detail Pages: Although Amazon controls many aspects of the selling process, you are still responsible for making your detail pages as appealing and informative as possible. This includes providing high-quality product images and detailed descriptions and using features such as Enhanced Brand Content to showcase your brand and products.
- Net 90 Payment Terms: Standard payment terms for Amazon Vendor Central are set at 90 days after your product has been sold. You will receive payment 90 days after the product is shipped to the customer. This can affect your cash flow, so it’s important to plan accordingly.
- Annual Negotiations with Amazon: Expect “negotiations” with Amazon to occur yearly. These negotiations may be related to pricing, promotions, product listings, and other aspects of your relationship with Amazon. It’s essential to be prepared for these negotiations and to have a clear understanding of your priorities and objectives.
- No Guarantee of an Account Manager: Having an Amazon Account Manager can be beneficial in navigating the complexities of Vendor Central. However, there is no guarantee that you will have an Account Manager assigned to your account. This means that you may need to rely on self-service options and support tickets to resolve issues and manage your catalog.
- Inventory Risks Remain: While Amazon takes over many of the responsibilities of selling your products, you are still responsible for monitoring and tracking inbound shipments to Amazon. This includes ensuring that your inventory levels are sufficient to meet demand and that your products are shipped to Amazon promptly and efficiently.
- Splitting Sales, Inventory, and Catalog Analytics: Sales, inventory, and catalog analytics for your products may be divided between manufacturing and sourcing. This can lead to difficulties in tracking and understanding your performance and making informed decisions about your product offerings. It’s important to be aware of these potential challenges and plan accordingly to ensure that you understand your sales, inventory, and catalog performance.
In conclusion, 1P selling on Amazon can be complex and challenging, but it can also deliver outstanding results for the right brands in appropriate circumstances. It’s essential to understand all the nuances involved and be prepared for the challenges and complexities of selling through Amazon Vendor Central. With careful planning and preparation, 1P selling can be a valuable and profitable addition to your sales strategy.
At TripleShot, we provide expert assistance in launching, growing, and scaling brands on Amazon. Both established and emerging brands benefit from our services.
Aug 25, 202310 min read