A case study on why Vendor Central isn't always the most profitable account
It is thought that because you must be invited by Amazon to become a Vendor, that it must be a profitable account. However, Vendor Central is not better, rather it is different and perhaps less hands on than its counterpart, Seller Central. Ultimately, the logistics is different for Amazon Vendor and Seller accounts so becoming a Vendor isn’t always the best option if it doesn’t fit within your business model. One of our clients was struggling with this until we showed them the flexibility and services available to them if they became a Seller rather than Vendor.
When we first started working with a global baby product brand and manufacturer, they were eager to find a solution to optimise their sales as a Vendor. One of the largest challenges they faced was the frequency in which they updated their product offerings. By changing their product and inventory levels every 6 months, this baby brand struggled to achieve high SEO rankings, effecting their overall sales.
By frequently changing their stock, Amazon had no historical data to use in determining how quickly their new ranges would sell. This meant Amazon would only buy a limited number of stock as a precaution. Due to Amazon’s stock cap, our client where prevented from achieving optimum sales and growth. Their inventory availability and product strategy made Vendor Central costly and inefficient marketplace platform for our client.
What we did
Since launching new products and removing outdated models was cyclical, and the Born to Run Programme was not available at the time, our Amazon experts identified that Vendor Central was not going to work for them. We decided to convert their account from a Vendor to an Amazon Seller, giving them more flexibility and authority over their products. This change allowed our client to manage how much inventory they wanted to sell on Amazon, releasing new ranges more efficiently and cost-effectively than they could do as a Vendor.
Staying Prime eligible
Deciding to switch to a Seller account did mean our client would lose some of the benefits of a Vendor Central account. Our most pressing concern was the loss of the automatic Prime eligibility as it would heavily affect their chance of winning the buy-box. To prevent this, we enrolled their products into the Seller Fulfilled Prime (SFP) programme, giving them the Prime status of Vendor Central and the freedom of a Seller account. Our Amazon experts decided a SFP strategy was right because FBA would have proven too expensive for three reasons.. One of the drawbacks to FBA is you pay by the space you use in Amazon’s warehouse and as our client’s products were large baby and nursery products, such as buggies and cots, they required lots of space. Also, our client already owned a large warehouse where they held their stock. Finally, as a well-established brand that also sold as a distributor globally, they had the logistics in place to make SFP work around their business rather than around Amazon’s.
Vendor Central isn’t always better
It might feel like reverting to a Seller Account is a step backwards but for some business models a Vendor account will not provide the outcome that you want. At Molzi, we understand where a brand can optimise their Amazon sales and in many cases it starts with the wrong type of account to begin with. Contact us now and let Molzi provide you with a bespoke consultation that will help determine where your Amazon weak spots are. Whether it be content, PPC or Amazon set up, we have an Amazon expert that has the experience and knowledge to support your brand sell. Unsure of how we can help your brand? Take a peak at our other case studies to get an idea!