You've been accepted as an Amazon Vendor, now what?
A growing number of retailers are gaining interest in Amazon Vendor. Yet the platform gains relatively little attention within retail forums, and many wholesalers are unsure how valuable this route to market is, and how to manage yet another relationship with Amazon.
This skepticism is understandable so this post seeks to demystify Amazon Vendor and pragmatically assess whether this is could be valuable for your businesses and if so, how could you effectively manage this channel.
What is Amazon Vendor Central?
Amazon Vendor is Amazon’s invite-only channel for B2B retailers. Qualified vendors enter into a supplier relationship with Amazon whereby Amazon purchase products at wholesale prices and sell on your behalf.
Sounds attractive? Rightly so, this type of relationship tends to enable you to shift higher volumes of your products… at the (sometimes costly) expense of losing control of your pricing. By becoming Amazon’s supplier, Amazon can choose how to price your item and, should demand fall, choose to return items to you. It’s worth also mentioning that Amazon Vendor’s payment terms tend to be longer (i.e. up to 90 days) and the Amazon Vendor system itself has been called ‘archaic’ to manage.
So for some retailers, the initial appeal of being a Vendor, can lose it’s shine because with the loss of profit volume of sales must increase for Vendor to be financially viable.
Having said this, Amazon do try and sweeten the deal… Amazon Vendor’s are given access extensive marketing opportunities with enhanced landing pages and opportunity to use Amazon's Subscriber & Save, Amazon Vine and Amazon Display Advertising. As with Fulfilled by Amazon (FBA) under Amazon Seller, Amazon Vendor products qualify for Prime Shipping.
By selecting only products with a high projected demand, Amazon Vendor Central accounts tend to experience higher growth through more trusted by consumer, leading to higher volume of sales. This is clearly advantageous, but can be a problem as the ROI won’t be realised until Amazon pays 3 months later and this can cause cash flow problems.
I’m interested in increasing my volumes, how to I get accepted onto Amazon Vendor?
Acceptance onto Amazon Vendor can seem a slightly fickle process. For some businesses, Amazon make the approach and offer the Vendor scheme for some bestsellers, for others, the Amazon Vendor Express route provides that opening on the first or maybe fifth attempt.
Whilst responses can seem varied Amazon do stipulate that it is only predicted bestsellers that are accepted and therefore there are no guarantees, and demand forecasts can change overnight.
Once accepted onto the channel, you’ll be able to use Amazon’s demand forecasting to view your products sales predictions and many retailers find this a valuable tool for managing stock levels and ensuring customers demand is met.
**Note: The Amazon Vendor Express scheme has been discontinued as of Jan 2019.**
My product has been accepted by Amazon Vendor, how do I manage this channel?
Once you’re accepted onto Amazon, you’ll quickly become faced with the Amazon Vendor interface. Given the depth of options for Vendors, understandably some retailers find the interface somewhat difficult to manage.
For many, it’s not so much managing the screens but rather than thought of having yet another platform to log into that puts people off. With yet another interface, multiple process steps, and another opportunity to throw your stock levels out, managing orders through Amazon Vendor could end up proving time-costly and inefficient on the whole.
Our best advice is to find an integrated, multi-channel software that will improve your efficiency in managing Amazon Vendor.
The next question is then rightly, what platforms integrate with Amazon Vendor?
What multi-channel software is available for Amazon Vendors?
Before jumping into looking at the options, it’s useful to understand how Amazon Vendor interfaces, as this will help explain the seemingly quite select group of software packages that have integrated with Amazon Vendor.
You may be aware of the large array of platforms that integrate with Amazon Marketplace (Seller Central). However, there is only a handful, and only one UK based firm, who have undertaken the Amazon Vendor Central integration.
Amazon Vendor uses an extensive interface using EDI (Electronic Data Interchange). For many developers, this is seen as an archaic or outdated transfer method and, the integration is therefore lengthy and potentially painful.
For these reasons, EDI is traditionally preferred by large organizations with in-house developers or those who can afford the extensive development budget required.
Amongst the list of platforms for Amazon Vendors, many are ERP solutions (B2B Gateway) or Microsoft based (Order Wise) and there is one UK cloud-based option for growing retailers (Khoo Seller).
Here we’ll discuss Khoo Seller however, it is worth exploring B2B Gateway or Order Wise too as these do provide solutions for retailers with specific requirements.
Many find that the setup costs involved do not make the platforms viable for their business and, although a cloud-based solution still requires setup, this is minimal in comparison.
The Khoo Seller Platform for Amazon Vendors
The Khoo Seller platform is a UK-based multi-channel, integrated e-commerce software designed specifically for B2B, B2C and Amazon Vendor retailers.
Developed by the owners of the Khoo Seller platform, Khoo Seller was built specifically for B2B retailers managing multiple routes to market.
Since launching the platform, the reception from the online community has been positive. Speaking to Online Seller UK, Prabhat Shah shared ‘For some time I have been looking for a solution that would integrate with Amazon Central accounts in multichannel platforms. Finally we have discovered ‘Khoo Seller, a UK based solution provider’.
How does the Khoo Seller Amazon Vendor integration work?
You may be left wondering how the Khoo Seller platform manages the Amazon Vendor interface.
Amazon state the EDI link is "designed to take the normal business to business processes and accelerate and automate them to help reduce costs and improve efficiency as our companies interact.”
The Khoo Seller integration establishes the EDI link. This means it is now possible to manage both your Customer orders (from your website) along wish your Amazon Vendor orders (from Amazon themselves!) within the same Khoo Seller back-end system.
The end result is a cloud-based multichannel inventory management system that manages all your sales in one place. And it’s not just Amazon Vendor that Khoo Seller interacts with, the software also ties together your wholesale and consumer website presences (if they are separate) along with eBay and Amazon Seller.
To close, where does this leave you?
Well firstly there is a choice about whether you’d like to be a Vendor. This is entirely dependent on your business model and whether shifting volumes would help your overall profitability. If you are accepted, the second choice is about how to manage Amazon Vendor and what software platform would suit you the best.