Not if, but how. Vendor Central vs Seller Central.
Amazon is a platform you cannot escape. Last year they completed the acquisition of Middle Eastern e-commerce giant Souq. They are fighting an expensive battle in India against Flipkart. Even in countries where Amazon don’t have fulfilment centres they are growing – Amazon Germany has been translated to Dutch and they offer Prime delivery in The Netherlands as they try to take market share from BOL.com and Cool Blue.
One thing is for certain, Amazon will not stop their expansion plans with Sweden looking to be next on the hit list. So, when discussing working with Amazon to clients, it’s not a question of if, it’s a question of how.
The most important challenge with Amazon is often forgotten by brands. They invest so much time in working out how to ‘control’ Amazon that they forget to use Amazon to drive sales. In many of the categories that it operates, Amazon is the market leader. They have the tools available to not only manage your retail channel, but also drive some serious volume. This is where working with a company like Molzi can really add value. We can negotiate favourable terms, set-up your account and most importantly, drive sales!
Previously the decision on how to work with Amazon was simpler. Supply stock to Amazon for them to sell directly (Vendor Central) or list products on their marketplace and ship to the customer directly, or via Amazon’s warehouse service (Seller Central). Amazon recently introduced a new way of supplying them called Vendor Central Express, which gives you some of the benefits of working directly with Amazon, but for brands that aren’t large enough yet to be set-up with a Vendor Central account. By working with a company like Molzi, you can bypass this stage and go straight to Vendor Central.
As we get asked this question a lot by existing and future clients we thought we would list the basic advantages of both of the main supply options.
VENDOR CENTRAL (VC)
What does VC do better than SC;
- Superior reporting and sales data
- Merchandising options
- A+ content
- More promo opportunities
- Full AMS options (PPC advertising)
SELLER CENTRAL (SC)
What does SC do better than VC;
- Price control
- Quickness of availability
- Lower Amazon margin rates
Unfortunately, it is not as black and white as analysing strengths and weaknesses. Amazon in some cases can take the decision out of your hands. There is a case we are aware of where Amazon have bought stock from a Seller Central vendor, at full retail price, and then moved the stock themselves to Germany to sell on Amazon DE. This then takes away the ‘price control’ element of Seller Central which is really the main benefit.
When selling stock directly to Amazon (VC), you must be aware that they will match the best offer in the market. This is also a positive because if the market is stable, Amazon will generally be stable also. There are of course times where they are a lot more aggressive than the market, but that is mainly due to overstock issues, all of which you can proactively manage before it becomes an issue (the data is available for you!).
Molzi work very closely with Amazon to ensure they are ticking all of their KPI boxes with the brands that we work with, and in return we get the support we need to really grow the sales. Talk to us about how you want to move forward with your Amazon/online strategy and we are more than happy to have a chat and suggest the best way to move forward.