As a brand selling products on Amazon, you have two options: Sell your products at wholesale to Amazon’s Retail arm through the Vendor Central platform (1P sales), or sell directly to consumers yourself through Amazon’s Seller Central platform (3P sales).
As a vendor, you may be considering if Seller Central is a better option for your brand in the long-run, particularly if you're a smaller vendor seeing fewer POs from Amazon. Or maybe you simply want to create a contingency plan should Vendor Central become unworkable for you in the future.
For some vendors, the impetus to move to Seller Central was sparked by glitches with Vendor Central that occurred earlier this year. A number of brands who sell to Amazon through Vendor Central experienced disruptions and delays in their purchase orders, causing speculation that Amazon might be planning to dial back the vendor program for smaller brands, essentially pushing them to Seller Central. Turbulence within the Vendor Central world has quieted down somewhat since then and many brands continue to be comfortable with their 1P sales, or they manage a hybrid of Vendor and Seller.
When and if you decide to move your brand to Seller Central, timing is important, as making the switch during the critical Q4 season could prove to be disruptive to your operations, and so too your sales. Waiting until the new year before you make the switch is advisable. In the mean-time, you can observe what moves Amazon makes regarding Vendor Central and continue to weigh the potential benefits and negatives of making the switch.
You’ll certainly have more control over your account in Seller Central, but you’ll gain more responsibilities too, like price setting, inventory management, running your own advertising and promotions, and customer service. This could be a whole new set of tasks that you aren’t currently equipped to take on, and you’ll have to decide for yourself if you have the resources to meet the demands of Seller Central.
After weighing the pros and cons for your own business, you might decide making the switch is the right call for you. So what’s next? There are several things you can consider now that will help you make a smooth transition to Seller Central when the time is right.
Amazon Brand Registry - Enrollment in Brand Registry strengthens your probability of success with a Seller Central account. Brand Registry gives your business greater control over your brand’s representation on Amazon, and it grants you access to robust analytic tools, and protects your intellectual property.
To be eligible for Brand Registry, you must have a registered and active trademark and meet country-specific requirements. Be advised: registering your trademark can take several months to complete, so plan accordingly. If you’re already enrolled through Vendor Central, you can transfer your Brand Registry to your new Seller Central account.
Operational Capabilities - Migrating to Seller Central’s direct-to-consumer model requires different operational capabilities.
Tax Obligations - As more states pass new laws regarding e-commerce, tax obligations for sellers are rapidly evolving. As the seller of record, your tax obligations will be different than they were as an Amazon Vendor. Consulting with a tax advisor with a strong understanding of the current sales, income, and other tax laws that impact e-commerce sellers will help you understand and plan for meeting your tax obligations.
Remember, Seller Central won’t make sense for all brands, and if you do decide to make the switch, timing is key. An e-commerce team that specializes in optimizing your Amazon account can assist you in weighing the pros and cons of making the switch, and guide you through the transition that will get you on the path to accelerating your sales.
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