Amazon Vendor – what is Amazon Vendor program and how to get one?
Amazon Vendor - what is Amazon Vendor and how to get it?
The Amazon Vendor program is something not every Amazon seller is familiar with. Apart from the logistic advantages, it also comes with several selling improvements. It is the closest you can be to Amazon, and its potential is enormous.
This program also has some disadvantages, but we will cover them later in the text. Let us start with some basics about the solution, shall we?
Amazon Logistic Solutions
Probably all the Amazon Sellers know that there are two logistic models they can choose from. The first one is FBM, which stands for Fulfilled by Merchant. In this case, sellers fulfil orders themselves using their own warehouses. It is relatively cheap to sell in this program. Sellers list their items, and after they are sold, they send products to customers. The only logistics cost that sellers need to bear is the Amazon fee.
The second logistic model sellers can choose is FBA. Fulfilled by Amazon is more complicated, and it requires much more of our attention. The first step for sellers in this solution is to send their products to the Amazon warehouse. When products are processed, they are available for customers to buy.
This time products are not fulfilled by sellers themselves but by Amazon. Orders are usually delivered very quickly, and customers can receive them even the next day. Thanks to this solution customers are happy with how the process goes.
It may sound even too good to be true. And you are right – it does. This program is much more expensive than the FBM program. Apart from the Amazon basic fee, sellers must pay up to 10-12% extra for each item sold. But that is not the end.
They also have to pay for shipping, warehousing, and maintenance as well. When you summarise all the costs, they are around 25-35% of the item price.
Amazon Vendor vs Amazon FBA
So now, when you already have a basic Amazon logistic solution, let us move to Amazon Vendor. Amazon Vendor is an upgraded Amazon FBA program. At least when it comes to just a logistic issue.
In practice, it is much more than that. Not every seller can open an Amazon Vendor account. There are several requirements sellers have to meet to be accepted. The first and most important one is that you must be a big fish almost all the time. Almost, because if you have potential, you may be considered a fit for this program as well. But leave it for a bit later.
Amazon wants manufacturers to take part in this program. This is because manufacturers can provide them with better prices and better quantities. Also, keep in mind, that it is Amazon that prepares a list of your items to sell, not you. You can cancel some Amazon orders, but sooner or later they can request some products you do not have in stock.
The thing Amazon Vendor and FBA have in common is the Prime badge. In the case of Amazon Vendor, you get much more than that. Your product is not sold by you, but it is sold by Amazon. It is a huge game-changer. Such a solution increases the reputation of your products significantly.
Thanks to this one sentence, your income goes up. Even more than in the FBA program. But it also comes with higher fees, which are negotiated with each seller individually. They are not small, that is for sure. But Amazon’s partnership can really help you a lot.
Disadvantages of the Amazon Vendor program
As I wrote a few sentences before, the partnership with Amazon has a lot of advantages. Increasing sales potential, smooth flow of goods, or warehousing, just to name a few. But it has some downsides as well.
The biggest, and the most important one, is that you do not sell your goods – Amazon does. I have also mentioned this one as an advantage, but the truth is in the middle. In this program, you become kind of a supplier, and do not need to care about sales. In this solution, Amazon decides what the price will be and what listings are live.
Unfortunately, another disadvantage is the price. Amazon thinks you will have huge sales volume in this program, so your profit can be cut. That is why the prices they offer for your products are low.
Another con is that it is really hard to get an invitation to this program. Let’s face it, not all sellers are manufacturers, and it is difficult to win a big market share on Amazon.
However, there are some ways you can try to get the Vendor account yourself. Not all of them are successful, and they do not guarantee 100% acceptance. But at least you can try. If you are interested, we will be more than happy to help you with this topic. As we have successfully applied for this account, we know where to start. Just contact us HERE.
Is it for you?
Each Amazon seller should answer this question by themselves. For some companies, it is a game-changer, and their revenue increases significantly. But for others, it is a total fiasco.
If you decide to try, do not do it only by yourself. We have been there and made many mistakes even on the second and third attempts. Fortunately, now we are smarter and know how to properly negotiate with Amazon. This can save you a lot of time and even more money. Do not wait any longer and contact us HERE.
