Setting your prices, tracking your data and easy handling: Top reasons to choose the Seller option on Amazon
If you are a brand and you wish to sell on Amazon, you have three options: sell to Amazon (the Vendor or 1P option), sell on Amazon (the Seller or 2P option), or find a partner to sell for you on Amazon (the 3P option).
Each option has its pros and cons, but here’s why you might want to sell on Amazon as a Seller.
What is the Seller program?
The Seller program is open to all companies — brand owners, distributors or retailers — who wish to sell products on the Amazon marketplace, competing with other sellers, and even with Amazon itself.
On Amazon there is only one page per product where all sellers compete on price — not one page per offer. Amazon regroups all offers and decides who will “own the buybox” (in other words, who will be the one selling).
When you are a Seller, you have the choice of letting Amazon do the delivery to end consumers. Called the ‘Fulfilment by Amazon’ or FBA program, this requires you to leave your stock with Amazon, so it can deliver your products within one day and with free delivery to its millions of Prime subscribers. This is obviously the best solution.
The second option is for you to deliver directly to end consumers — the Fulfilled by Merchant (FBM) program. It is possible to become Prime eligible with FBM, but you need to have flawless one-day delivery, which can be an issue.
Why become a Seller?
In the past, brands were Vendors and distributors/retailers were Sellers. But in recent years Amazon has been giving some of the benefits from the Vendor program — such as A+ or Enhanced Brand Content, and the Vine testing program — to the Seller program too, for brands that are registered on Amazon.
In some cases Amazon even makes it impossible to become a Vendor, particularly for smaller brands — so some companies find their only option is the Seller program.
But the main benefit of the Seller program, and the main reason it is used, is that brands can decide on their end consumer price.
That’s a big change from selling to retailers where dictating prices is forbidden by law, and it’s especially useful when launching a product to test, or in protecting prices so that they are not driven down by Amazon’s algorithm.
It is also very useful if your business as a Vendor is not profitable anymore because charges from the system are too high.
Any other benefits?
There’s a second good reason to become a Seller: analytics. The Seller program provides an incredible amount of data on traffic and conversion, which enables brands to drive their business in a very refined way. On the Vendor option, the access to such data is very limited, as Amazon keeps its own traffic data to itself.
A final reason: for some brands on Vendor Central, the handling becomes too complicated — too many credit and debit notes, too many tickets to open, sometimes no Vendor manager to support. In these cases, Seller is a much easier option, with less hassle and easier day-to-day management (although there is still a lot of case opening!).
How do I become a Seller?
The Seller program is open to anyone. You need, however, to make sure you have clear and consistent documentation. Many accounts have been suspended because of name or address inconsistencies on their company papers, credit card documentation and other legal documents.
Basically you need to use one main email address, and make sure this address is not linked to any other Amazon account (Seller or Vendor) and that it doesn’t belong to someone who might leave the company. Have your passport ready and scanned — and you will also need your credit card, bank account details and proof of company address (such as a utility bill).
What are the risks?
The Seller option is overall low-risk. However, the dreaded ‘Seller Performance Team’ is always on the watch. This team is hidden inside Amazon and no one can contact them except by email — to which they only respond with parsimony.
Their job is to check your account is legit. However, they have been known to suspend accounts very quickly and with very little reason. It could be because your documents are not matching, or because your IP was linked to another closed account. In any case, to prevent that happening, opening the account with great caution — or with the help of experts — is of paramount importance.
See also our other post on Amazon Global Selling. You must make sure you haven’t enabled the option to let Amazon buy from you if you want to keep control of your prices.