If you are a manufacturer or wholesaler, being kicked off Amazon Vendor Central might be one of the most stressful things that can happen to your business, and that nightmare seemingly became a reality for thousands of merchants just last week.
Amazon abruptly stopped sending orders for wholesale products from many of its vendors, and those vendors feared the worst. It turned out to be a false alarm, but a scenario where Amazon suddenly changes course on how it interacts with its various suppliers and retailers is not out of the realm of possibility.
In fact, experts believe it’s only a matter of time before Amazon mandates vendors to sell directly to consumers on the Amazon Marketplace. That makes sense for Amazon, as it eliminates the cost of purchasing, storing, and shipping products and reduces the risk of buying goods in bulk, allowing Amazon to simply collect a commission on each transaction without all the overhead.
Last week’s scare highlighted just how much Amazon merchants must be ready to adapt to whatever strategic pivot the e-commerce powerhouse dictates. The Amazon Marketplace prioritization, for instance, would mean thousands of companies suddenly are selling on Amazon differently and suddenly need to connect in new ways.
The differences between Amazon Vendor Central and Amazon Seller Central (the marketplace’s interface), however, extend beyond a simple change in name. It represents a major shift in how some of Amazon’s longtime vendors digitally interact with the e-commerce giant.
Many of its “preferred vendors,” for instance, have been using the Amazon Vendor Central portal to facilitate and sell bulk orders to Amazon, and the process is largely reliant on EDI to meet Amazon’s needs. But it sounds like they’ll at some point be forced to change their approach to inventory and fulfillment (if they even decide to stick with Amazon) when they switch over to the API-driven Amazon Seller Central interface.
Luckily, an Amazon Marketplace application connector will help enable this new world order of e-commerce with Amazon, speeding adaptation and smoothing the transition from vendor to seller.
What is Amazon Vendor Central?
Amazon Vendor Central is the web interface used by suppliers – manufacturers and distributors – and allows Amazon to sell those goods. Amazon acts as a full-time distributor, buys and stores inventory, and handles shipping and pricing, customer service, and returns. Access to this platform traditionally has been by invitation only, which enables Amazon to hand-select only the best partners with outstanding fulfillment operations and provide a premium customer experience.
Such a setup, however, means Amazon mandates stringent guidelines for fulfilling their orders. Amazon Vendor Central is highly dependent on EDI systems for purchase order (PO), advance shipping notice (ASN), and other fulfillment data, and it’s extremely punitive around late or inaccurate data. Vendors operating through this platform need reliable and resilient integration to remain EDI-compliant with Amazon and avoid losing revenue to costly chargebacks, which can include:
· 1% of cost for late purchase order acknowledgments (POAs) or POA changes
· $5 to $150 for a late EDI 856 - ASN (Advanced Shipping Notice)
· 2% to 6% of cost for non-compliant ASNs
Retail is such a cutthroat industry with very tight margins that even a seemingly minuscule 1 percent penalty can be extremely damaging for merchants and retailers. Web-based retailers often only reap net margins between 0.5 percent and 3.5 percent, so a 1 percent hit could represent 25 percent to 200 percent of a retailer’s potential net profit (!). It’s clear that your business cannot afford to get EDI wrong as an Amazon Vendor Central partner.
Ensuring Amazon can effectively sell your products and that your business remains in good standing on the Amazon Vendor Central management platform requires tight integration with EDI software and back-end ERP systems. An out-of-the-box application connector for Amazon Vendor Central delivers that snug integration and all the Amazon Vendor Central help you need to get transacting faster. It also provides several advantages that will assist in growing your reputation with the notably stringent e-commerce giant.
Benefits of an Amazon Vendor Central Connection
With an Amazon Vendor Central connector, you can automate your critical PO and ASN transactions between the Amazon Marketplace and your back-end systems to ensure reliable and accurate order-to-cash and fulfillment processes with Amazon. Your business can:
· Easily provide accurate product and catalog details to Amazon via EDI
· Realize accurate, reliable, and compliant AS2/EDI interactions with Amazon
· Eliminate SLA violations and costly chargebacks due to non-compliant EDI or data errors
· Automate ASNs and POAs acknowledgments and other business process transactions
· Effectively get its products in front of hundreds of millions of potential customers
Ultimately, this model is a little easier on the seller since your focus is on filling orders and meeting SLAs for just Amazon. However, given last week’s vendor scare, Amazon may be pushing brands and merchants to sell directly to consumers on its marketplace via Amazon Seller Central sooner rather than later.
What is Amazon Seller Central?
Amazon Seller Central is the web interface used by brands and retailers to sell their products directly to Amazon customers, and it’s open to anyone. Many companies connect to Amazon Marketplace in this way to establish a digital shelf to sell their products, and Amazon takes a fee on each transaction for providing the marketplace. Organizations and sellers using this API-based method are considered “third-party sellers” by Amazon and often pay a subscription to list and sell their goods.
These third-party marketplace sellers handle the shipping, customer service, and returns for each individual order, or they can enroll in the Fulfilled by Amazon program, which allows Amazon to handle all of it. While using Amazon Seller Central is beneficial for brands because they can bring their products to market faster, control the pricing, and offer more flexible logistics services, there is tremendous downside without the right integration solution.
Amazon Marketplace’s API richness means connecting and integrating to the e-commerce application can get very complicated. Connecting via API, for a lot of businesses, means:
· Lots of time to learn and to code it out
· Instability in maintaining API integration
· Delayed time to value
Most organizations don’t have the skills or resources to tackle the API problem. But, a prebuilt application connector enables tight integration between Amazon and your back-office systems to deliver real-time product, inventory, purchase order, and logistics data to Amazon customers, as well as seamless integration with third-party logistics providers for optimized fulfillment.
Benefits of an Amazon Seller Central Application Connector
Rich Amazon API connectivity is required for accurate data alignment between the Amazon Marketplace and your back-end systems to optimize fulfillment processes with your logistics partners or with Amazon. With an out-of-the-box Amazon Seller Central integration connector, your business can:
· Easily add, update, query, and delete information within Amazon Marketplace
· Power API flows for data on transactions, products, competing items, and other trends
· Integrate into your ERP, CRM, and fulfillment systems align data between front-end and back-end applications
· Implement an e-commerce presence without having to build and launch your own digital store
· Access significant amounts of Amazon’s consumer data for insights into your product sales
· Reach the largest online global sales audience through one of the most trusted e-marketplaces in the world
Such a connector ensures manufacturers and wholesalers get all the Amazon Seller Central help they need to effectively sell through the Amazon marketplace.
VENDOR CENTRAL VS. SELLER CENTRAL
|Amazon Vendor Central||Amazon Seller Central|
|Amazon is your direct customer||Consumers are your direct customers|
|Amazon owns, stores, fulfills the product||Fulfillment by you, third party, or Amazon|
|Rigid logistics, set by Amazon||More flexible logistics options|
|Amazon controls product pricing||Merchant has more pricing control|
Amazon is one of the largest e-commerce marketplaces in the world, and it serves as a valuable digital storefront for many companies and merchants. There are lots of websites out there telling businesses how to become a vendor on Amazon, but most won’t tell you about the integrations you’ll need to become a successful one. Reliable and seamless integration into the Amazon marketplace is a non-starter for unlocking and optimizing new revenue streams.
The Amazon Marketplace connector from Cleo Integration Cloud facilitates frictionless data connectivity and API integration for Amazon Seller Central, as well as robust EDI and application integration for the Amazon Vendor Central platform. Our connector serves all of Amazon Marketplace’s major APIs – Customers, Orders, Products, Feeds, Fulfillment Outbound Shipments, Inventory, and more – and can be configured in a couple of hours. It also ensures retailers can flexibly evolve with any pivot Amazon makes to its business strategy.
If you’re trying to integrate your e-commerce workflows or looking to become an Amazon vendor, learn more about Cleo’s e-commerce application strategy and integrate the data flows powering your digital marketplace.