Chances are that if you are selling on Amazon, you’ve heard a variety of rumors during the past few months on major changes to Vendor and Seller Central. Several months ago I coined these rumors ‘Purge or Merge’ as the two main predictions have been about A) most brands on Vendor Central being kicked off and forced to Seller Central (a platform for the third-party marketplace), or B) Amazon transitioning everyone to a new unified system called ‘One Vendor’ (or a combination of both).
A few weeks ago, thousands of Vendor Central brands (also known as 1P or wholesale brands) reported they did not receive their weekly Purchase Orders (POs). As you could imagine, this caused most of them to scramble and inquire on whether this was the result of a technical error or if Amazon was no longer going to place orders for their products. Like all things Amazon, support tickets replied with various and often conflicting messages.
Nearly one week later, many brands received a letter from Amazon stating that this was a ‘temporary pause’ while suggesting enrollment in their Brand Registry program within the next 60 days to avoid future disruptions since Amazon prefers to source ‘directly from brand owners’. While Amazon has resumed placing POs for most brands, I suspect this is temporary and thousands of vendors will soon be forced off of Vendor Central - even if they have brand registry. I believe this ‘cut’ will evaluate a variety of factors including size of the account, strategic importance, historical results, and brand registry status.
No official explanation has been provided by Amazon, leaving brands confused and helpless. Some have taken initiative by looking into opening up Seller Central accounts (which we have suggested for months), while others are waiting to get more clarity before taking action.
Whether or not this is the start of the ‘purge or merge’, we are confident that major changes are in the works for Amazon brands and sellers. Several of our Amazon counterparts have also indicated that a major change has been in process for months. Additionally, Amazon has taken a series of steps to prepare for this transition, including:
- A consolidation of several ‘vendor’ and ‘seller’ teams at Amazon
- The addition of several tools to Seller Central that had only been available on Vendor Central (i.e. coupons, sponsored brand and product display ads, video, search term analytics, etc.);
- The acceleration of the notorious ‘hands off the wheel’ initiatives for Amazon Vendor teams
- Multiple attempts to move many brands on Vendor Central away from their Vendor Manager via the VSP program
- Recent changes to seller central pricing notifications, including ‘Brand Health: Action Required’ warnings when the price of a product is found cheaper off of Amazon
From Amazon’s perspective, a ‘purge or merge’ scenario makes a great deal of sense. For one, Amazon is likely more profitable on Seller Central as they eliminate inventory risk. Additionally, Seller Central has always complemented Vendor Central by allowing for a broader range of listings, and with tactics like suppressing the buy box when the price of a sku is found cheaper off of Amazon, they can force the sellers hand to price competitively.
Another factor is the development of Amazon Advertising, a self-service tool allowing brands scale their presence without a Vendor Manager. Finally, as a former Amazon Category Manager, I can attest to how lean Amazon’s vendor facing team is, and as a result many brands have been pushed away from Vendor Managers for the past few years.
Contrary to popular belief, these potential vendor-to-seller changes may be a blessing in disguise. For example, several brands currently on Vendor Central have been hesitant to open or transition to a Seller Central account because of Vendor Managers threatening to enforce Amazon’s MOA Policy. This policy states that Amazon ‘may choose to source products from some Brands for sale by Amazon only’, giving Vendor Managers the ability to shut down competing Seller Central accounts (although many vendors have still opened up Seller Central accounts). Additionally, there are a series of differing complexities and standards between Vendor Central and Seller Central, so any further change to unify or mitigate the dual set of standards will only streamline and thus benefit the customer experience.
With all these changes being made, many details are still left unclear. Will fees and terms change on Seller Central? Where is the cut-off on who sells wholesale to Amazon versus who is pushed to become a third-party seller? What will be the impact of a potential influx of brands to the third-party marketplace? What will detail page control look like for brands forced away from Vendor Central?
Most importantly, how will these changes affect you, a current or prospective Amazon seller? Come join us at the Amazon & Me workshop on Tuesday, June 25 at IRCE to hear from experts on this topic and much, much more!
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