Amazon is an American multinational company dealing with e-commerce, digital streaming, cloud computing, and artificial intelligence. It is regarded as one of the most influential economic and cultural forces in the World". It is currently the most reliable platform for sellers and vendors for showcasing their products in the world market, however starting a business on Amazon requires you to make certain decision such as wether you are going to be work Amazon as a seller or a vendor. So what’s the difference between an Amazon seller and a vendor?
Who is an Amazon Vendor?
The greatest difference between the two programs is how each of them sells on Amazon. Vendors sell their supplies to the employed buyers of Amazon. They don't list, price, or market the products sold to Amazon. Instead, Amazon lists and resells the products to its consumers. On the website of Amazon, the vendor's products are not mentioned as 'sold by their business,' but instead, it is tagged a 'sold by Amazon.'
The service offered by Amazon to the vendors is invite-only at the moment. The main concept behind it is that customers are believed to put more trust into products sold under the banner of Amazon than any other "XYZ company."
2 ways you sell as an Amazon vendor:
1. Vendor Express
Vendor express provides free handling and a free depository for products. Once your items sell, you get orders in bulk.
2. Vendor Central
Vendor central is accessible by invitation only. It gives an approach to improved marketing, customizable landing pages, and the Amazon vine product review network.
Top 4 Advantages of Being an Amazon Vendor
1. Less workload
Vendors escape the responsibility and fatigue of dealing with pricing, marketing, and storage; Amazon takes care of that. It is a perk for small businesses that lack managing capacity.
Vendors face a lower overhead since they aren't subjected to the same payment sellers are.
3. Accurate Inventory and Sales Forecasting
It is easier to predict how much inventory you will need in the next quarter and what would be the possible sale you will make because Amazon takes regular purchases in bulk from vendors. In addition, inventory tools are accessible for vendors that are unavailable to the seller.
4. Subscribe and Save Perk
Your goods can be packaged with Amazon-only perks, just like the subscribe-and-save program. The particular reason for this circumstance is that Amazon is selling your products.
3 Must-Know About Being an Amazon Vendor
1. Keeping Up with the Demands
The uplifting character behind Amazon's success is its business model that depends on the goods it offers is always available and ready to ship at short notice. Small retailers which sell products that are hard to manufacture in short time face problems in keeping up with the swift demands of Amazon.
2. Uncertain Profit Margin
Since Amazon controls pricing in this program, vendors lose money because Amazon may set prices too low for them to expect a profit margin.
3. Mercurial Customer
Amazon is the world's largest market, and the competition keeps on getting tough with time; hence there is no guarantee that Amazon will keep purchasing your products. Amazon truly prefers tried and tested products over new and untested products bringing less incentive for vendors to keep innovating.
Who is An Amazon Seller?
In contrast to the Amazon vendors, Amazon sellers sell their products directly to the consumer; their goods are marked on the site as "sold by their business." No particular invitation is required to become a seller on Amazon, even if you don't have a registered business body. Sellers have to manage inventory and fulfill orders on their own.
Top 4 Advantages of being an Amazon Seller
1. Potential of Building Brand Image
Thousands and millions of customers visit Amazon every month; dedicated sellers can gain attention and build their brand image and can gain visible recognition.
2. Highly Interactive
Amazon Sellers are in charge of their customer service, so they keep connecting with their customers to answer queries through Amazon's messaging feature and to displace and return orders. This allows them to keep a direct connection with customers and maintain a healthy business environment.
3. Access to FBA
Sellers who face difficulties in managing the inventory logistics can go for Fulfillment by Amazon service. In this case, sellers make their products available to the buyer more quickly with higher visibility.
4. Control Over Prices
Sellers can control pricing and adjust them according to their wariness.
3 Must-Know Things of Being an Amazon Seller
1. Hurdle's Managing Logistics
If an Amazon seller selects not to pay for FBA, it will become compulsory to bear the headache of managing inventory, shipping, and storage. If the seller is not vigilant with managing logistics, they may go out of stock which will result in delayed shipment. It will ultimately cause a poor Amazon Seller Performance Rate.
2. Abounding Fees
Sellers have to bear many fees as compared to vendors. These fees can leave an impact on the profit margin even when Sellers set the price.
3. Absence of Amazon Branding
Small businesses face a tough time as a seller getting themselves recognized against the products "sold by Amazon." Amazon tagged products win consumers’ confidence in a single glance, making it difficult for the new sellers to compete in parallel.
If you are planning to jump into business with Amazon, be very wise to choose whether you want to drive as a Vendor or as a Seller. Get a complete picture of your resources and clear any shadows of confusion. Consistency can work wonders whether you work as a vendor or a seller. Look into the advanced third-party inventory management and tracking tools to opt for the option that will work best for you.
How helpful did you find the blog? Do let us know what you think is the most challenging thing while starting a business on Amazon.