Amazon Canada Vendor Central Guide & Playbook for 2022

February 21, 2024 Amazon Canada Vendor Central Guide & Playbook for 2022

What is Amazon Vendor Central?

Amazon Vendor Central is a platform for which businesses can sell their products to Amazon for resale through an invite-only method. In other words, you as a business become a supplier to Amazon through the Amazon Vendor Central platform.

How does Amazon Vendor Central work? Selling on Amazon Vendor Central is simple, and you can get started in no time! Here’s how…

Step 1: Amazon will send you an ordered listing of the products which they would like you to supply

Step 2: Sending your inventory over to Amazon

Step 3: Receive your payment from Amazon!

From there, your products will be listed and sold on the Amazon website and will be fulfilled just like any other product. At this point, your part of the process is complete. At this point, Amazon will deal with the final customer.

For this reason, selling on Amazon Vendor Central is quite attractive, we know. It’s a much simpler method of making sales on your product compared to Seller Central.

In this complete guide to selling on Amazon Vendor Central, we take you through the entire process and answer all your questions regarding what exactly Amazon Vendor Central is, how Amazon Vendor Central works, and all the details that come with the process.

Amazon Vendor Central vs Seller Central … What’s The Difference ?

Amazon Vendor Central vs Seller Central: Basic Differences

With this method of selling on the Amazon marketplace, you, as a business owner sell directly to Amazon, not to the end consumer. Therefore, the sale made to the end-user is through Amazon Retail, involving 2 parties being the Amazon shopper and Amazon, the company.

The supplier (in this case, you) are not involved in this sale by using Amazon as a middleman platform to reach a targeted audience.

With Seller Central you, as a business owner become a third party on the Amazon marketplace, utilizing Amazon as a middleman to advertise your product to a large, targeted audience.

Amazon Vendor Central vs Seller Central: Amazon Fulfillment

One advantage you may enjoy by opting for Amazon Vendor Central is that you don’t have to worry about fulfilling orders yourself, Amazon takes care of the entire process. All you have to do is make sure your inventory is sent to an Amazon fulfillment warehouse.

Amazon Vendor Central vs Seller Central: Who Is Eligible

Another distinguishing characteristic of Amazon Vendor Central is the fact that this route to Amazon selling works only through invitation. What does this mean?

This means that unlike Seller central, you cannot decide to sell through Amazon Vendor Central and sign up to begin. You must be invited by Amazon to use this platform.

Unlike Amazon Vendor Central, anyone can begin selling their products on the Amazon marketplace through Seller Central. Once you’re ready to launch your business, you may register and begin, no invitations are required.

Amazon Vendor Central vs Seller Central: Marketing Advertisement

One of the additional advantages that come with choosing the Amazon Vendor central route vs the Seller Central is that you are offered multiple advertising options compared to the limited advertising options you get with Seller Central.

If you are interested in more details about Amazon Vendor Central vs Seller Central, check out our blog Vendor Central vs Seller Central in 2020: What’s best for your brand?

Why Switching to Amazon Vendor Central May Be Beneficial (If invited)

1. Consumer confidence

One of the main advantages that you will benefit from through Amazon Vendor Central selling is the ***confidence you gain from your customers**.* What we mean by this is that in the perspective of the consumer, they are purchasing the desired product from Amazon rather than a third party whose name they may have not heard of before. The reassurance of knowing that they are purchasing from a known and trusted brand stimulates consumer purchasing.

2. Enhanced and Expanded Advertising Opportunities/Benefits

As mentioned in the “Vendor Central vs Seller Central” section of this guide, one of the main benefits business owners derive from operating their Amazon business through Amazon Vendor Central is that there are enhanced and expanded opportunities for advertising through ***Amazon Marketing Services (AMS)***. Such services provide keyword-targeted ad campaigns which increase traffic to specific product pages on Amazon. Note that these advertising services are also available on Seller Central if you have brand registry.

3. Simplified Business Model

Other options for attracting traffic to your product and/or brand may include consulting a 3PL such as AMZ Prep who can help boost your product on Amazon as well. Consulting with a 3PL helps to boost sales since such businesses are very familiar with the ins and outs of Amazon fulfillment and can make the process a lot easier and more efficient. Better advertisement, better fulfillment, and a better experience, that’s just what we do.

4. Ability To Sell In Bulk

Amazon Vendor Central is beneficial to simplifying your business model in the sense that you can almost delegate a large portion of your responsibility to your end-users, over to Amazon. What we mean by this is that with Seller Central, whether your choose to fulfill your orders through FBM or FBA, you are still responsible for matters including lost inventory, tax liabilities, sales reconciliation, and other issues that may arise.

5. Better Cash Flow

Fulfilling orders in partnership with a 3PL may help to reduce such responsibilities, however, with Amazon Vendor Central, your only responsibility is to Amazon. From there, Amazon deals with any sort of communications with the shopper.

6. Easier To Forecast Revenues

Selling through Amazon Vendor Central provides you with the additional advantage of selling your products to Amazon in bulk without the worry of inventory storage. Once Amazon orders and receives their product from your business, you receive your money, and the process ends here. Since Amazon purchases your product (often in bulk) at the beginning of the process rather than by customer order, you will experience higher cash flow.

Essentially, this model offers higher predictability of sales, making it easier to forecast revenues. This is a positive aspect for your business long-term as it can help you organize your long-term business model, marketing plan, and budget in costs.

If you are already involved in B2B (Business To Business) sales with other major retailers such as Walmart, Loblaws, and Costco, you are already quite familiar with the Amazon Vendor Central model since the process is very similar. Once you receive your purchase orders (PO’s), all you have to do is approve, ship, and get paid. It’s as simple as that!

On The Other Hand

Although there are many great benefits to choosing Amazon Vendor Central (if invited), there are some downsides you may want to consider before making the switch. Some of these disadvantages include:

1. Price Control

While Minimum Advertised Pricing (MAP) guidelines do exist, Amazon doesn’t always strictly adhere to these guidelines. Therefore, retail prices may be adjusted by Amazon based on their internal algorithms, inducing price controls. What this means is that supplier margins may be lower than expected. It’s also good to keep in mind that if you do sell to other retailers, Amazon may undercut the pricing without any forewarning. This may put your relationships and/or contracts at risk.

2. Logistical Requirements

Amazon is quite strict when it comes to fulfilling purchase orders within rigid guidelines. This may be an added stress for vendors who are struggling with fulfilling Amazon orders in time and maintaining their stock. This logistic requirement may result in significant chargebacks that result in lowered revenue.

3. Lack Of Sales Channel Diversification

While selling to Amazon in bulk is beneficial to creating good cash flow and high predictability of sales, selling the bulk of your inventory to one sales channel can get quite risky. The last thing you want is for your Amazon Vendor Central business to be running smoothly only to come to an abrupt stop with no warning. Essentially, you don’t want to be minimizing your sales channel diversification by allocating your time and inventory towards one buyer.

4. Loss Of Brand Control

Since Amazon Vendor Central does not allow you to deal one-on-one with your customer base, your ability to build your brand is limited in some aspects. Once you sell your product to Amazon for resale, you lose your avenue for brand building since Amazon now represents your product on the marketplace. On the other hand, you can still create storefront, EBC (Amazon Enhanced Brand Content), video and content to showcase the value of your brand.

How to get an Amazon Vendor Central Account

Before getting into the logistics of setting up your Amazon Vendor Central account, let’s talk about the prerequisites to becoming an Amazon Vendor. What is Amazon Vendor Central all about?

As established earlier on in this guide, you must be invited by Amazon to become a Vendor. This concept gives rise to the question, If there are already millions of products being sold on the Amazon Marketplace through Seller Central, what purpose does Amazon Vendor Central serve?

The marketplace is always being updated and presented with new products and ideas being sold. Picking out the brands that will produce the greatest returns for Amazon is essentially the goal for the corporation.

By understanding the purpose behind Amazon Vendor Central, we can then identify the qualities of an Amazon Vendor. Some of the types of businesses that Amazon invites to become a Vendor include:

  1. Established brands with a high demand on the Amazon marketplace
  2. Marketplace sellers who are doing exceptionally well
  3. Exhibitors at trade shows and fairs with attractive products

If you are invited by Amazon to become an Amazon vendor, you will be contacted with an offer of which you may accept or decline. Once you accept, Amazon will guide you through the Amazon Vendor Central interface and provide you with their terms of business.

Amazon will then create an account for you and will invite you to register through their Amazon Vendor Central registration portal. From there, you may begin providing information with the details regarding your product and costs.

Amazon Preparation (Fulfillment & Shipping) For Vendor Central

Who Will Fulfill Your Orders?

When it comes to amazon fulfillment, you have 3 available options. These Amazon fulfillment options include 1P, 3P, and drop-ship options. Here are some more details for each.

1P involves sending your Amazon-ordered inventory over to an Amazon warehouse and fulfillment center, where your order is sold and fulfilled by Amazon.

Another option you may take is to partner with a third party (3PL) who will receive your inventory, ship it to an Amazon fulfillment center, and take care of all the logistics in between.

Another option you have available is Amazon Vendor Central direct Amazon fulfillment or dropship. This option differs from 1P in the sense that you ship your inventory to the end customer directly rather than to an Amazon fulfillment warehouse.

Amazon then pays you for the orders that you’ve fulfilled. Why does Amazon offer this option? As a company, they will advocate for this option to minimize the inventory that is fulfilled from their warehouses and to also avoid purchasing more inventory from Vendors than sold.

If you do opt for drop ship, Amazon will run several checks to ensure that you can handle the Amazon fulfillment and shipment process. This process generally takes between 3-5 business days. Once you’ve been approved to fulfill through dropship, you can begin receiving orders.

However, it’s also important to note that certain guidelines come along with fulfilling your orders, and if these standards are not met, access to drop-ship options may be revoked. In a similar sense, high Amazon fulfillment performance may result in being asked to move to a quicker shipment window.

While you do fulfill and ship your order to your customers, Amazon is still responsible for any required customer service.

Dropship does come with the option of partnering with a 3PL to fulfill and ship your orders to the end customer. In this case, you are still a supplier on Amazon Vendor central, and Amazon still purchases your inventory for resale however, you are dropshipping through a warehouse.

For more details on 3PL Amazon fulfillment for Amazon Vendor Central, check out this page.

Are Amazon Vendor Central and FBA The Same?

The answer to this question is no, they’re not the same. While there are many overlapping characteristics to Amazon Vendor Central and FBA, there is one distinguishing quality: vendor central vs seller central.

What we mean by this is that FBA and Amazon Vendor Central both involve Amazon as a fulfillment middleman (dropship excluded) however with Amazon Vendor Central, you are a supplier that sells their inventory to Amazon. With FBA, you are a third party on seller central who opts to have Amazon complete their order fulfillment.

With fulfillment by Amazon (FBA), you first send your inventory to an Amazon warehousing and Amazon fulfillment center for storage. Once you recieve an order through seller central, Amazon will ensure that your ordered product is picked, packaged, and shipped out to the customer. Despite the Amazon fulfillment procedure, it is still your responsibility to make sales.

Fulfillment by merchant (FBM) is like FBA in the sense that you are a third party selling their products on the Amazon marketplace through seller central but are responsible for Amazon fulfillment whether it be done from your own warehouse or a third-party (3PL) such as AMZ Prep’s fulfillment warehouse. If you’re interested in learning more about FBM and FBA, check our FBM vs FBA guide here.

What’s an ASN? How does the labeling process work?

ASN is the short form for Advanced Shipment Notification. Amazon suppliers (Vendors) are responsible for sending Amazon this electronic packaging list before any sort of delivery. An ASN provides all the detailed information with regards to the products and quantities that vendors intend on delivering to an Amazon fulfillment center per order.

This list can be sent to Amazon via Electronic Data Interchange (EDI) or through the Amazon Vendor Central Portal under the “Shipment” function. An ASN will be a requirement for every shipment you make to an Amazon fulfillment warehouse.

This is a preliminary step required for the Amazon Vendor Central sales process and is required for the booking process in CARP, Amazon’s online booking portal.

While this may seem like dreadful logistics, it is quite beneficial for your peace of mind when it comes to ensuring that things are running smoothly with your brand. An ASN will precisely allocate quantities of multiple products and purchase orders (as directed by the supplier).

The ASN will help Amazon fulfillment centers receive complex combinations of purchase orders and ASINs (Amazon Standard Identification Number) onto the right purchase order. This will also help them ensure that the right product and quantity of supplied product arrives at the Amazon fulfillment center when scheduled.

The additional traceability of your inventory product will not only ensure that orders are received but will allow for quicker payment processing times and quicker resolution times for issues that may arise. Essentially, you are investing in peace of mind.

How Frequent are Purchase Orders (PO’s)

Once you have set up your Amazon Vendor Central portal, have gone through all the logistics, you are ready to receive orders from Amazon. These are typically done weekly (oftentimes on Mondays).

However, if demand for your product is high and is continuing to grow, Amazon may make multiple orders a week for your product inventory. Generally, Amazon does prefer to make smaller orders at a time so that they are not overwhelmed with excess inventory in their warehouses.

This is something that you will be accustomed to over time, as your brand continues to grow. If your products are doing well and are selling in high volumes, you will find that Amazon is making larger purchase orders on a more frequent basis.

What do Amazon Vendor Central fees look like?

When it comes to fees related to selling on Amazon Vendor Central, there are 3 types of charges:

1. What Is Market Development Funds

MDF allowance (another word for fees) is for all the behind-the-scenes work that Amazon does to market your product and manage the catalog. These fees are typically 10% but may also range from (5-15%).

2. What Is Damage Allowance

Damage allowance is a fee paid for damaged goods (hence the name). These fees typically range between 2-3% however may deviate from this range based on the ability to return the product to the stock.

3. What Is Freight Allowance

Finally, freight allowance is for the shipping services required to get your product from your warehouse to the Amazon fulfillment center. Once your order has been made, you may book shipment and Amazon will send their courier services to pick up the inventory. This allowance generally ranges between 2-3%.

Remember that these allowances are all outlined in the terms of agreement you sign off on when you accept the invitation to be an Amazon Vendor. Be sure to read this outline carefully and understand what types of fees you may face.

Some other fees you may want to look out for are the following:

  1. International Return Shipping Costs
  2. International Shipping Costs
  3. Currency Exchange Costs on Your Internationally Sold Items
  4. Customer Support Costs
  5. Taxes and Duties
  6. Translation Costs for Listings

Typical Seller Central costs for FBA include flat-rate fees, $39.99 per month or $0.99 for FBM sellers. Keep in mind that there may be other costs associated with the shipping and Amazon fulfillment processes to FBA and FBM on Seller Central.

Amazon Vendor Central Is a Different Beast, What Are The Key Take-Home Points

The best Amazon Vendor Central ideas to master are the following:

  1. Amazon Vendor Central vs Seller Central
  2. How to Become a Vendor
  3. Pros and Cons of Vendor Central
  4. Amazon Fulfillment of products sold through Vendor Central
  5. Affiliated fees

Selling your product and marketing your brand on the Amazon marketplace can make a great business! But, it can get a little overwhelming if you are tackling everything on your own. That’s why AMZ Prep is here to be your partner in leading your business to its peak success!

Contact us today for more information on how we can launch your Amazon Vendor Central business and effectively fulfill your orders one at a time!


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