Amazon is the talk of the rumor mill as sellers wage their bets on whether One Vendor is real or not. Today, Amazon is split between Vendor Central and Amazon Seller Central on the backend. But One Vendor elects to consolidate the two, creating a single online store.
For some sellers, that’s less-than-ideal news. Here’s why.
I recently spoke with the ecommerce director of a portfolio of brands that reels in over $150 million in annual revenue on Amazon.com. The company sells first party (1P, wholesale) via Amazon Vendor Central and third party (3P, marketplace retail) via Amazon Seller Central.
This hybrid approach is useful for a few reasons:
<td class="tg-gxsv"><a href="https://vendorcentral.amazon.com/gp/vendor/sign-in">Vendor Central</a></td>
<td class="tg-gxsv"><a href="https://sellercentral.amazon.com/">Seller Central</a></td>
<td class="tg-gxsv">Marketplace Seller</td>
<td class="tg-ibbi">Prime Eligibility</td>
<td class="tg-gxsv">Yes, via Fulfillment By Amazon (FBA) or Seller Fulfilled Prime (SFP)</td>
<td class="tg-ibbi">Payment Terms</td>
<td class="tg-gxsv">2%30 Net 60 (Amazon has option to pay in 30 days for a 2% discount)</td>
<td class="tg-gxsv">14 day disbursement cycle</td>
<td class="tg-ibbi">Price Control</td>
<td class="tg-ibbi">Inventory Control</td>
<td class="tg-gxsv">Amazon Retail Analytics (Basic, Free), Amazon Retail Analytics Premium (Advanced, ~$30,000/year)</td>
<td class="tg-gxsv">Seller Central (Advanced, Free)</td>
<td class="tg-gxsv">Yes, Self-Serve <a href="https://advertising.amazon.com/help">Sponsored Ads</a> and Co-Op</td>
<td class="tg-gxsv">Yes, Self Serve Sponsored Ads</td>
There's flexibility in this dual-selling method. But brands may soon have to give up control over where and how their products are listed—to the hands of Amazon itself.
In order to better control the customer experience and dictate the most favorable economic relationship with brands, Amazon is rumored to be months away from launching a consolidated selling experience called One Vendor.
With One Vendor, brands won’t be able to separate their 1P and 3P selling activities; instead of Vendor Central and Seller Central portals, there will only be one portal as Amazon may soon determine whether a brand will be selling 1P or 3P on a per ASIN basis.
So, if your brand has been avoiding a 1P relationship with Amazon to retain more control over your listings, you may be forced 1P anyways for the ASINs that Amazon determines are advantageous for a wholesale relationship. If you try to sidestep this and authorize specific third-party marketplace sellers (resellers) to sell your wares instead, Amazon reserves the right to prevent your brand from being sold by marketplace sellers entirely.
As tech website Recode points out, this policy isn’t brand new. Amazon has long said that brands selling to retailers outside of Amazon that also want to sell on their platform are expected “to give Amazon Retail the option to source those product at competitive terms for sale as Retail items only.”
Now, the policy may actually be enforced.
“I don’t think it’s a sustainable model,” PopSocket CEO David Burnett, who has felt burned by the company in the past, told Recode. “Maybe for controlling the small players whose business depends on Amazon. But to endure this kind of treatment? There’s a lot of great brands out there who can make that choice to leave [Amazon entirely].”
In an FBA subreddit, one user shares Burnett’s sentiment, saying, “It seems insane. There are tons of legit, non-[private label], actual brands which are direct-to-consumer and sell on Amazon. Surely they know a d2c business is in no way prepared for such a massive [pay cut]?”
“Is 3rd party selling over??” writes another user.
“Depends on how they define ‘independent sellers,’” a third user says, referring to the same Recode article stating how One Vendor seeks to funnel brands and independent sellers alike into the same platform. “Could mean that [third-party sellers] can also submit their stock... But it could still be heavily restricted... So who knows.”
While the status of One Vendor is TBD, the future health of your business doesn’t have to be.
We’ve often preached on sales channel diversification for this very reason: if Amazon (or any other channel) decides to pull the plug on your brand, or offer direct replacements of your top-selling products, you’re protected.
Diversification ensures that you’re not reliant on any one channel. You can also build up traffic to your own webstore, while leveraging marketplaces for product line experiments, volume discounts with your suppliers, and/or additional brand awareness.
So, even if One Vendor were to drop tomorrow, you won’t have to choose between selling wholesale to Amazon to stay afloat or shuttering your business altogether.
There is no official launch date for One Vendor and Amazon is remaining tight-lipped, even denying that such a program exists. (Meanwhile, former Amazon employees warn that it’s coming.)
We’ll be keeping a close eye on this topic and reporting any updates. Got any tips? Tweet us @ZentailCommerce.