Vendor vs. Seller - How to sell on Amazon
Amazon is now not only the global market leader in e-commerce, but also one of the largest price and product search engines on the Internet. According to a study by the Ibi Research research institute from 2017 with more than 1,000 online buyers on the topic “Shopping behavior in the digital age” , 34% of those surveyed start their product search directly on Amazon and only 15% on Google. With this knowledge in the background and the constantly growing sales figures from Amazon, it is almost unavoidable for many retailers to list and sell their products on the online marketplace.
Still not sure if you want to sell your products on Amazon? We give you an overview of the advantages and disadvantages.
Profit from selling on Amazon
If you rely on Amazon as a sales channel, you can enjoy many advantages. There is already a large customer base on the marketplace platform, which is available to you immediately after connection and which you do not have to laboriously build up over a long period of time. In addition, Amazon offers many practical services, such as payment and logistics processing, which means that you have less effort in this area. You also have the opportunity to build your own brand and compete against large, existing manufacturers.
The Downsides of Selling on Amazon
Of course, selling on Amazon also has disadvantages. There is a lot of competition in many categories, making it difficult for many sellers to get their products ranked well. In addition, Amazon is not really suitable for products that require a lot of advice or explanation, which is also the case with many other e-commerce platforms.
For you, the advantages outweigh the disadvantages and you have decided to offer your products on Amazon? Great , then the next step is to think about how best to proceed to sell successfully on Amazon and how you can grow on the marketplace in the long term.
Vendor vs. seller – which business model suits you better?
Amazon offers sellers two forms of collaboration. You can appear on the platform as either a vendor or a seller.
If you want to use the vendor model , you deliver your products directly to Amazon. The marketplace acts as a retailer and sells the products in its own name. This is a relatively simple way of selling as you only have to take care of the delivery of the goods. The downside, however, is that profit margins can be lower and you have less control over your products since the marketplace dictates the price and sale in this case. Vendors are often brand manufacturers or larger intermediaries of products.
A seller , on the other hand, lists and sells his products on the platform independently. You are the owner of the goods at all times and retain full control over the products and the price. However, this model requires more commitment and effort on your part to sell the products successfully.
Amazon FBA and Amazon FBM, what are the differences?
If you decide to get started as a seller on Amazon, you also have the choice of whether you want to ship your items via Amazon ( Fulfillment by Amazon – FBA ) or independently ( Fulfillment by Merchant – FBM ). Both forms offer some advantages and disadvantages. While you get the Prime logo via FBA, you have to pay higher buy box rates and generally less additional effort for all logistics issues, Amazon allows you to pay for this service with additional fees. Furthermore, you only have limited access to customer data and no direct customer contact.
If you take care of the logistics yourself, you have control over the entire purchase and shipping process, but also a lot more work. This model is particularly worthwhile for companies that already have their own logistics network and do not have to set it up themselves. Amazon places very high demands on the logistics service, tolerates very few errors and, if necessary, can have your account blocked if the services are insufficient.
Individual consideration of the sales model on Amazon
Whether selling as a vendor or seller or the model with FBA or FBM is the best option for you depends entirely on your company, your goals and your specific product. Both models have their own pros and cons. We would be happy to advise you on the decision-making process and, of course, also support you in making your products “Retail Ready” for Amazon and with the various advertising options so that your products and your brand are optimally pushed.