Amidst the COVID-19 pandemic, digital marketing and the Internet became more prevalent in helping brands promote new product lines, and earn higher eCommerce sales. Each day, entrepreneurs look for new ways to expand business growth to new, untapped demographics. Fortunately, Amazon can help accomplish brands of all sizes reach this goal. Through Amazon Vendor and Amazon Seller Central, businesses can promote their brands and sell products through Amazon. The two are very different, however, and these pros and cons can help one weigh their options before making a rash decision.
Less Work comes with Fewer Rewards
Amazon must first invite entrepreneurs and brands to become a vendor on Amazon. As an approved Vendor Central partner, a lot of creativity gets taken out of the process because of the amount Amazon does for the brand. While this may sound appealing, brands must understand the disadvantages.
Profit Margins
Amazon prides itself on having the lowest competitive prices, so a product may decrease in retail value to match its competitor’s prices. The brand owner doesn’t have 100% control over these price changes, as they must comply with Amazon’s set of standards. This also creates problems for the brand owner receiving payment at the amount he or she desires.
International Businesses
To capture the widest and most profitable markets, most brands go after international audiences. Amazon Vendor Central can only sell in the U.S. marketplace at the Amazon website. This, in turn, limits a brand from reaching its maximum potential and shields them from potential buyers from the rest of the world. As a third-party seller, Amazon Seller Central can expand into other parts of the world. Although brands will need to create another account, Amazon has it set so countries are grouped into different regions; this prevents brand owners from creating hundreds of accounts and saves a lot of time.
Flexibility and Direct Access to Customers
Being a part of Seller Central, one does not have to run their products through Amazon. They can sell directly to customers and essentially cut out Amazon as a middleman. Although Amazon is supposed to adhere to any minimum advertised price, Vendor Central partners complain that Amazon sometimes does not keep these promises. Since Amazon has all the control within Vendor Central, this can hurt the brand and result in Amazon selling very low or wholesale for its own gain. This can result in a price war, which decreases profits for everyone.
Seller Central, on the other hand, can control their pricing, thereby leading to stronger profit margins. In addition to wider profit margins, being an Amazon Seller means you can control changes in your listings on Amazon, which can attract more attention from buyers and the market.
Owning & Understanding the Target Market
What it really comes down to is simple: Do you trust Amazon? Are their services reliable enough for you? With Vendor Central, Amazon handles a lot of the stressful work involved in running a business and an online brand. They handle things like pricing yet also charge people for “slotting costs” and other fees through Amazon. This, however, takes away any responsibility and accountability from the brand owner.
Since Amazon Vendor only functions in the United States, Amazon can either popularize your brand across the nation or spread it to foreign markets and external opportunities. It really depends on the product you are selling and how you identify your target market. In summation, Amazon Seller Central has a lower amount of cost, higher profit margins, and more opportunities across the globe. Seller Central comes with more work and accountability. However, the freedom to control one’s product line is part of the fun of growing a brand.
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