Amazon Says "Just Kidding—for Now"​ After Pulling the Plug on Thousands of Amazon Vendors


March 12, 2019

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One week after panic broke loose, many Amazon vendors are breathing a sigh of relief. Amazon has dialed back its decision to end a majority of weekly purchase orders, offering temporary relief to those affected.

Amazon would resume its orders following a 'temporary pause,' read one email to a vendor.

But the dust has yet to settle. Within the same email, Amazon urges the vendor to sign up for Amazon's Brand Registry enrollment, a program that lets brand owners and licensees submit proof that they are an authorized seller of goods.

vendor central email to seller
Image Source: Digiday (view full email here)

The vendor has 60 days to enroll. Afterwards, non-brand owners will be sent over to Seller Central. Only registered vendors will retain access to automatic purchase-order fulfillment from Amazon, according to Digiday.

One Vendor Still on the Horizon

So, was last week a fluke?

Likely not. "Amazon was [probably] dipping its toe into merging Vendor Central and Seller Central into One Vendor, but it 'kind of bungled the execution,'"CEO of Amazon-focused agency Indigitous Larry Pluimer told Adweek.

Amazon remains tight-lipped about the situation, still denying the existence of One Vendor while former employees argue otherwise.

But all the signs seem to indicate that a consolidated platform would be in Amazon's best interest.

Fifty percent of products for sale on Amazon are already supplied by third-party merchants that utilize its self-service tools. Amazon reportedly makes 10% after costs on these products, versus 5% on direct sales. (Selling direct is most advantageous when Amazon needs to open new categories or to fill holes in their inventory that it relies on merchants to maintain.)

The One Vendor model would be one step towards addressing several big challenges staring Amazon straight in the eyes, including:

  • Reducing overhead costs associated with providing services to vendors who may not be profitable for the company to manage
  • Identifying and weeding out low-quality vendors (sellers of counterfeit or unauthorized goods) that compromise its brand positioning
  • Maintaining and/or increasing inventory turnover
  • Streamlining the seller's experience: tools like Brand Analytics that were once limited to Amazon Vendors are now being offered to merchants in Seller Central, as Amazon seeks to cut down some heavy-lifting (and costs) with automation
  • Protecting the customer's experience: Over the last several months, Amazon has been telling sellers on both sides of the divide that they 'obsess' over customer experience. Mid-sized and large brands were just recently pushed in the other direction (from Seller Central to Vendor Central) under this explanation.

Not a Bad Thing, if You're Prepared

There's a silver lining for vendors who are bumped over to Seller Central in the days leading up to One Vendor.

Marketplace merchants enjoy greater control over the price of their goods, can run price promotions and receive more data around their performance, among other perks.

The trickiest part may be getting up and running, or getting the training and expertise to efficiently manage your end-to-end operations.

This is why sellers choose Zentail. The right ecommerce automation software can give you a leg up when launching to a new platform—be it Amazon Marketplace, eBay or their other counterparts—by centralizing your operations and letting you automate manual, duplicative tasks. It will also provide easy integrations into your shopping cart, 3PL and other technology to streamline everything from listing, order fulfillment, inventory and warehouse management.

The Bedrock of a Strong Ecommerce Brand... a diversified channel mix. After all, what's happening now is reminiscent of what happened just a year ago.

Remember Amazon Vendor Express? Just three years after its launch, Vendor Express was officially canceled and set to shutter in January 2019. The wholesale program gave small private-label brands a quick way to become a direct Amazon supplier, but eventually left them stuck between the more involved Vendor Central or self-service Seller Central.

Today, some sellers are (understandably) jaded.

"...the drastic actions are the latest example of how the fortunes of brands and merchants on Amazon’s platforms can change on a whim." -Recode.

The prevailing answer?

" Amazon’s retail business progresses towards a more hands-off model similar to Alibaba’s marketplace, both vendors and sellers are eyeing growth elsewhere...Relying on any one platform to do business is dangerous, and Amazon has shown in the past week that it can cripple multi-million dollar companies in one swipe." - Digiday

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