Deciding whether to sell on Amazon as a Seller or a Vendor can be confusing, especially if you’re new to the eCommerce giant’s online marketplace. We look at some of the key differences between Amazon vendors and sellers, as well as some of the benefits and drawbacks of each method of selling.
Considering becoming an Amazon Seller?
Find out everything you need to know in our beginner’s guide to selling on Amazon.
Amazon Sellers use the Seller Central Portal, where you own the products in your inventory until your customers buy and receive them. You can choose to manage fulfillment using Amazon’s FBA service, or you can do it yourself. Typically, being an Amazon Seller is the cheapest way to start selling on Amazon.
As a Seller, you have two different fulfillment options:
Fulfillment by Amazon (FBA)
With Fulfillment by Amazon, you ship your products from the manufacturer/supplier to an Amazon Fulfillment Center. They manage shipping and returns to and from your customers, and you pay Amazon for storage fees and fulfillment fees for each product sold.
Fulfillment by Merchant (FBM)
With this option, you manage the fulfillment of orders yourself and handle shipping, returns, and customer service. This a good option for businesses that sell products with a longer lead processing time.
Advantages & disadvantages of being an Amazon Seller
Open to anyone
Sell directly to Amazon’s customers
Flexible fulfillment options
Less advertising opportunities
Potential for high fulfillment costs
Typically lower sales
What is an Amazon Vendor?
As an Amazon Vendor, you act as the manufacturer/distributor/supplier, and you are responsible for getting your products to multiple Amazon warehouse locations. You can also incur fees for products that don’t sell quickly enough. Although you take a hit on profit per product as a Vendor, you can make up for it with higher sales volume potential.
There are two ways to sell as an Amazon Vendor:
Vendor ExpressVendor Express is open to anyone and offers free handling and storage of products. You can also opt for direct fulfillment i.e. drop ship. Bulk orders are received as soon as an item sells.
Vendor CentralVendor Central is available by invitation only. It allows access to enhanced marketing and advertising opportunities, customizable landing pages, and the Amazon Vine product review network (for an additional fee).
Advantages & disadvantages of being an Amazon Vendor
Increased advertising and marketing opportunities
Access to programs like Prime Now
Ability to self-manage promotions
Less control over pricing
More complex and inflexible fulfillment requirements