Did you receive an invite to become an Amazon Vendor and are contemplating whether or not to accept it? Or you’re probably just curious about how to become a Amazon Vendor is and thinking of becoming one. Whatever your reason is, it’s important that you understand how the Amazon Vendor program works to see if it’s the right one for you.
In this post, I will explain what Amazon Vendor is and how to become one. You’ll also learn the difference between Amazon Vendor and Amazon Seller. Lastly, I will discuss the pros and cons of becoming an Amazon Vendor to see if it’s the right one for you.
Be sure to read until the end to learn some tips on how you can succeed as an Amazon Vendor.
How to Become a Amazon Vendor?
If Amazon has third-party sellers (3P), also known as Amazon FBA or FBM sellers, it also has first-party sellers (1P), known as Amazon Vendors. It’s a unique program that connects Amazon to different vendors, which are mostly distributors and manufacturers.
Currently, the Amazon Vendor program is not available for all Amazon sellers, and you can only become one if you get an invite from Amazon to join the program.
Although there are some Amazon sellers who were able to become Amazon vendors by directly contacting Amazon to express their interest, this is a long shot, and Amazon will most likely decline your request.
How Can You Increase the Chance of Getting an Invite?
If you want to get noticed by Amazon and receive an invitation to become an Amazon Vendor, here are some of Amazon’s criteria when choosing who to send an invitation to.
- Sellers who are doing well with their Amazon business.
- Those whose products have a high customer demand on Amazon
- Those who attend trade exhibitions and have shown impressive and attractive product exhibitions.
How Does Amazon Vendor Program Works?
So what happens when you receive an invitation to become an Amazon vendor? Once you agree to Amazon’s terms, you will have access to Amazon Vendor Central. The Amazon Vendor Central is somehow similar to Amazon Seller Central. This is where vendors set up and manage their products for sale.
Here are some things you need to know to navigate the Vendor Central dashboard.
Orders Tab: This is where you will receive and see the purchase orders from Amazon
Items: This is where you can include and update all the details about your product, including images.
Advertising: Where you create your PPC campaigns.
Merchandising: The place where you can find all your Marketing tools. Some of the tools you can access here are Amazon Vine, A+ Content, and more.
Reports: This is where you can get insights into how your business is doing. If you want a more detailed report, you can use the Amazon Retail Analytics feature.
Payment: Where invoices are paid and where you can see all remittances.
Once you’ve set up your Amazon Vendor Central account and listed your products for sale, you just have to wait for purchase orders (PO) from Amazon. Most of the time, you can expect a PO once a week. It can be more if there’s an increase in demand for your product.
The reason why Amazon prefers smaller but frequent deliveries is that they don’t want to spend too much money storing large quantities of inventories in their warehouses.
Your first order will probably be small as Amazon will still be testing your product. However, once Amazon sees that your product is selling and there’s a big demand for your product, you can expect to get larger orders over time.
Amazon Vendors are typically paid once every 60 to 90 days.
Related Reading: How Often Does Amazon Pay Sellers? What You Need To Know
What’s the Difference Between Amazon Vendor and Amazon Seller?
The main difference between Amazon Vendors and Amazon Sellers is that Amazon Vendors sell their products to Amazon, and Amazon sells the products to their customers. Amazon Sellers, on the other hand, sell their products to end users or Amazon customers.
Below is a summary of the major differences between Amazon Vendor and Amazon Sellers.
| FEATURE | AMAZON VENDOR | AMAZON SELLER |
| Access | By invitation only | Anyone can join, no invitation needed |
| Customer | Amazon | Amazon customers |
| Fees | Packaging, marketing, co-op, remittance fees | Subscription and referral fees |
| Inventory Management | Amazon and manufacturer/distributor | Amazon and seller |
| Support | Vendor account manager | Seller support |
| Product Pricing | Set by Amazon | Set by sellers |
| Marketing | A+ Content, Amazon Vine | Enhanced brand content |
| Payment | Once every 60 to 90 days | Every 7 to 14 days |
| Order Fulfillment | Amazon | Amazon or seller |
Related Reading: What is Amazon FBA: Complete Amazon FBA Guide in 2023
Pros and Cons of Becoming an Amazon Vendor
Now that you’ve learned the difference between Amazon Vendor and Amazon Seller, let’s now discuss the pros and cons of becoming an Amazon Vendor to help you better understand if this Amazon program is right for you.
Pros
- Vendors can take advantage of Advanced Amazon Marketing Services
- Since your products are shown as sold by Amazon, customers are more likely to buy your items because they trust Amazon
- The Amazon Vendor Central is less complicated and is easier to manage
- All customer concerns are handled by Amazon, no direct contact with Amazon shoppers
- Order fulfillment is handled by Amazon
Cons
- Product pricing is set by Amazon, so you lose control on how much you want to sell your products which may mean lower profit margins
- Amazon vendors lose control over their brand
- It takes 60 to 90 days for Amazon to pay their vendors
- There are a lot of fees involved, which may cause vendors to pay more than what they sometimes earned
- It can be difficult to manage inventory sometimes since Amazon sales are unpredictable. If vendors have difficulties filling purchase orders, it may result in chargebacks
How to Succeed as an Amazon Vendor
If you received an invite from Amazon and you accepted it, here are some tips to help you succeed as an Amazon Vendor.
Ensure Your Items are Eligible for Amazon Prime
If your products are Prime-eligible, you gain access to loyal Amazon shoppers who shops more than non-Amazon Prime members. Other reasons why you need to ensure your products are Prime-eligible are they are ready to buy, they’re willing to pay more, and you have a higher chance of winning the buy box.
Master Amazon’s A9 Algorithm
If you want to succeed as an Amazon Vendor, you should improve your SEO strategy. Make sure your listings are optimized by using relevant keywords, better image quality, description, and more.
Get More Reviews
If your products have numerous 5-star ratings, the better chance they will be recommended by Amazon. Shoppers mostly base their purchase decision on reviews, and the more positive reviews you have, the higher chance of getting more sales.
Advertise Outside of Amazon
While Amazon offers great marketing tools for their vendors, don’t solely rely on them. You can use different social media, such as Instagram, Pinterest, Facebook, and more, to promote your products outside of Amazon.
You can also try email marketing, paid ads on Google, and more. If you’re a new vendor, it may take time to get reviews, so while waiting to get more reviews, you can play around with advertising outside of Amazon.
Conclusion
Becoming an Amazon Vendor is a big decision to make. There are a lot of things to consider, such as the payment terms, product pricing, and fees involved. So, make sure to weigh its pros and cons and try to find out if they will be good for your business.
If you can’t decide between the two, you can always be both – Amazon Vendor and Amazon Seller, but make sure you can manage all the work involved, and you can find a way to balance both.
If you think Amazon Vendor is not for you, then enroll in my Amazon FBA course to learn the ins and outs of becoming an FBA seller.