Amazon Vendor vs. Seller vs. Broker
If you want to establish yourself as a seller on Amazon, you have the choice of acting as a vendor, seller or broker. Each of these options has its own advantages and disadvantages as well as specific strategies that you should consider. As an Amazon Vendor, you sell your products directly to Amazon, which then resells them under its own name. As a seller, on the other hand, you have full control over your sales process and can sell directly to customers. A broker, on the other hand, mediates between sellers and Amazon or other marketplaces without owning products themselves. These different business models have an impact on pricing, margins, brand control, logistics and customer relationships. A detailed comparison of the pros and cons can help you make the best decision for your business goals.
Amazon Vendor vs Seller and why this decision might not be that important
Vendor? Seller? Or perhaps even a hybrid model? Many e-commerce companies and product manufacturers are asking themselves what the best sales model is for them on Amazon. Anyone who has been active as a Vendor for a long time probably longs for the advantages that Sellers enjoy and vice versa. A comparison of Amazon Vendor vs Seller shows that both models have their specific advantages and disadvantages. Since the choices are already very limited, we’ll just cheekily throw another option into the room.
Amazon Seller
Sellers are responsible for selling their goods themselves. You use Amazon as a marketplace and are the product owner at all times. Seller Central users benefit from complete control over sales prices and stock levels. You make direct contact with end customers (Direct to Consumer/D2C) and manage shipping and returns. Alternatively, you can book Fulfillment by Amazon (FBA). In this case, Amazon handles shipping and returns, among other things.
Amazon Vendor
Verdoren sell their goods to Amazon and take on the role of supplier. The e-commerce giant owns the products and takes care of logistics, sales and shipping. Amazon is also responsible for pricing and returns management, including customer contact, in the vendor program. The Amazon Vendor vs Seller model shows how differently the responsibilities are distributed
A comparison between Amazon Seller and Vendor
Data
| Seller | Vendor |
|---|---|
| Business reports: Data for analyzing sales data (clicks, impressions, conversions, etc.) | ARA reports: ARA Basic and ARA Premium provide data for retail analytics |
| Brand Analytics: Data for analyzing purchase and search behavior | Brand Analytics: Data for analyzing purchase and search behavior |
| API & customer data: Helpful API enables analysis with third-party software. Customer data. | API & missing data: API hardly usable. Sales data missing (clicks, impressions, conversions, etc.) |
Content
| Seller | Vendor |
|---|---|
| Upload & changes | |
| Content changes and uploads run via Self-Service (SC) or LBD | Upload & changes |
| Content changes and uploads run via various support tickets | |
| Guidelines & Release | |
| Changes are usually visible quickly and unchanged thanks to automated checking | Guidelines & release |
| Compliance with guidelines is monitored more closely and approvals take longer | |
| Write permissions & errors | |
| Write permissions are requested via Brand Registry. Changes only rarely. | Write permissions & errors |
| Highest write permissions. Some changes to the content contain errors. |
Special programs, contact persons and automation
| Seller | Vendor |
|---|---|
| Special programs | |
| No comparable programs are currently available to sellers | Special programs |
| Programs such as Amazon Fresh can be used | |
| Contact person | |
| Advertising manager to increase advertising expenditure. System-based, primarily self-service. | Contact person |
| Vendor managers, AVS and SVS are becoming fewer and are mostly paid. Supporting various brands in parallel – development towards self-service. Advertising manager to increase advertising expenditure. | |
| Automation | |
| API helpful in many areas, third-party software can provide support. | Automation |
| API not fully developed in many areas. Third-party software problematic. |
Logistics
| Seller | Vendor |
|---|---|
| Shipping models | |
| Sellers can use FBA and FBM. Prime badge possible on both models. | Shipping models |
| Vendors can use FBA and dropshipping. Prime badge, Prime Now and Same Day Delivery possible. | |
| Shipping instructions | |
| Strict requirements for seller performance. Risk of account blocking ensures compliance with targets. Quantity and delivery time freely selectable. | Shipping instructions |
| Strict specifications through vendor manual. Penalties ensure compliance with targets. Amazon determines the quantity and delivery time. | |
| Dispatch processing | |
| Amazon takes care of returns, shipping confirmations etc. with FBA. With FBM, the seller has to take care of these tasks himself. | Dispatch processing |
| Amazon takes care of returns, shipping confirmation, etc. with FBA. |
Product listing and stock
| Seller | Vendor |
|---|---|
| Product listing | |
| Immediate listing possible. | Product listing |
| Listing only possible with sell-in. | |
| Stock | |
| Independent management of stock levels (forecast stock range). The time and quantity of storage can be freely determined. | Stock |
| Amazon hardly ever orders full ranges any more. Focus on profitability of individual articles. Reordering 100% automated based on purchase probability. | |
| Discontinuation | |
| Only items that violate Amazon’s guidelines are delisted. | Discontinuation |
| If an item no longer meets the profitability targets, it is no longer reordered – CRaP-Out (Can’t Realize any Profit) occurs |
Accounting
| Seller | Vendor |
|---|---|
| Invoices | |
| Invoices for e.g. sales fees from Amazon can be generated via simple reports. Sellers sell directly to end customers and must therefore also create invoices and send them via the Amazon system. | Invoices |
| Complex allocations create expense. For example, discounts and penalties are offset against purchases of goods. Invoices come from different countries and only partially include VAT. | |
| Internationalization | |
| When selling abroad, VAT issues such as delivery thresholds must be monitored independently. Specialized third-party software can provide support. | Internationalization |
| Amazon sells the goods as a retailer and therefore handles international invoicing. |
Costs
| Seller | Vendor |
|---|---|
| No negotiations, fixed account fees, sales fees (7-15%) and optional costs through FBA. | Individual contracts with various special agreements such as return agreements and listing fees. |
Competition with trading partners
| Seller | Vendor |
|---|---|
| End customers can see the seller’s name and imprint, which could create an obvious competitive situation with retail partners. | The supplier is not visible to end customers. Only the information “Sold by Amazon” appears on the product page – so there is no obvious competition with retail partners. |
Price
| Seller | Vendor |
|---|---|
| Sellers set the price themselves. Excessively high prices can lead to poorer performance values and thus indirectly to lower rankings. Excessively high prices can lead to a loss of the buybox. | 100% automatic pricing by comparing with internal and external competitors. |
Exceptions: Promotion prices, excess stock and long-term stock
With an uncontrolled pricing policy, automated price reductions can lead to pressure on profitability and annoy trading partners who adhere to price recommendations.
If the price is the same, the vendor usually wins the Buybox. |
Personnel/resource expenditure
| Field of activity | Seller | Vendor |
|---|---|---|
| Inventory management | 👤👤👤 | 👤 |
| Prime Logistics | 👤 | 👤 |
| Internationalization | 👤👤👤 | 👤 |
| Price control | 👤👤 | 👤 |
| Buybox control | 👤👤 | 👤 |
| SEO control | 👤👤👤 | 👤👤👤 |
| Branded content (incl. videos) | 👤👤👤 | 👤👤👤 |
| Product tests | 👤 | 👤 |
| Communication with customers | 👤 | 👤 |
| Data and BI | 👤👤 | 👤👤 |
| Launch of new products | 👤👤 | 👤 |
| Sponsored ads (incl. SD re-targeting) | 👤👤 | 👤👤 |
| Amazon DSP | 👤👤👤 | 👤👤👤 |
| Offers/ promotions | 👤👤 | 👤 |
| Potential conflicts with trading partners | 👤👤 | 👤 |
| Terms and conditions talks with Amazon | 👤 | 👤👤👤 |
| Total | 👤👤👤 | 👤👤 |
Amazon Vendor vs. Seller: The hybrid model
In the hybrid sales model, the manufacturer acts as both vendor and seller. This model combines both forms of distribution. This type of business relationship involves both advantages and risks. By combining the Amazon Vendor vs Seller models in the hybrid model, companies can benefit from both worlds.
Advantages of the hybrid model
In principle, the hybrid model promises more flexibility and greater safety. With the help of a well thought-out marketplace strategy, you can take advantage of the benefits of the model:
- Ensure product availability
- More control over pricing than in the vendor model
- List products faster
- specific analysis data via Seller Central
- Logistical advantages
- Avoiding profitability problems with selected products
Challenges of the hybrid model
A combined sales strategy should be well thought out, because the hybrid model also has a few pitfalls. Amazon may not tolerate the seller account or may block individual products from being sold via this account. The hybrid model presents brand manufacturers with a number of challenges:
- Increased workload
- Customer satisfaction & end customer support
- Country-specific laws must be observed even more independently
- Competition with own wholesale customers
- Possibility of a blocked seller account and associated circumstances
The alternative: SPACEGOATS - Amazon Broker
SPACEGOATS offers its own software that you use as an online reseller instead of Seller Central – “Selling as a Service”. You can use it to manage listings, products, stock delivery, PPC and more. An optimized version of Seller or Vendor Central with additional services and features. These include an automated supply chain and PPC as well as the connection to all European Amazon marketplaces. You do not interact directly with your Amazon account, but indirectly with the Amazon account of SPACEGOATS, your “Amazon Broker”, via the software. This eliminates the need to register for VAT abroad. What sounds complicated at first becomes clearer straight away.
Your advantages with SPACEGOATS:
- Ensure product availability
- List products faster
- Specific analysis data
- Logistical advantages
- Protection against account blocking
- Less work involved
- Customer satisfaction
- Handling of compliance tasks
#1: Ensure product availability
While the hybrid model already has some advantages over the classic vendor model, SPACEGOATS offers fully automated just-in-time delivery from pre-FBA warehouses. Fulfillment partners automatically replenish the Amazon warehouse so that your products are never out of stock. A cool side effect is the optimization of your LBI. You enjoy flexible arrangements and delivery with third-party fulfillment partners and still ship to your customers via Prime.
#2: List products faster
Vendors usually have to wait several weeks for Amazon to upload an item. Sellers can make their products available on Amazon in less time. Those who sell via SPACEGOATS can not only quickly list new products, but also quickly expand to new marketplaces without any administrative effort. This turns many individual marketplaces into one large marketplace. As an Amazon broker, SPACEGOATS also offers support in expanding into international markets, which is otherwise often very time-consuming.
#3: Specific analysis data
Seller has significantly more meaningful information available on important key figures, such as the conversion rate. Unfortunately, vendors have to do without this almost completely. However, SPACEGOATS goes one step further and not only provides detailed information on its own products, sales and turnover figures, but also offers ongoing competitor analysis to help you compete for the top positions. In addition, SPACEGOATS is part of the Amazon 360 program, where Amazon shares more information with sellers and offers much more extensive support. Logically, SPACEGOATS customers also benefit from the information and data provided by Amazon, as the success of SPACEGOATS depends on the success of its customers.
#4: Logistical advantages
Whether it’s delivery restrictions, the fear that products could go out of stock or the need to write lengthy delivery schedules, with SPACEGOATS you communicate with certified pre-FBA and fulfillment partners who ensure the availability of your products in the Amazon warehouse in a fully automated process. This shows that an Amazon broker like SPACEGOATS significantly reduces the logistical challenges.
#5: Protection against account blocking
Multichannel sellers will “only” experience a loss of sales if their account is blocked. Whereas pure Amazon sellers lose their sales basis. Sellers are naturally more exposed to this risk than vendors. When selling via SPACEGOATS, sellers do not need their own Amazon account, which therefore cannot be blocked.
#6: Less work involved
The hybrid model includes the management of both Seller and Vendor Central and requires a basic understanding of both systems. In addition to your vendor account, as a seller you are also responsible for various tasks, including warehousing including labor costs, inventory control, processing customer orders, customer support and taxation. To overcome these challenges, SPACEGOATS offers the possibility of automating many of these processes. These include the automation of PPC campaigns via BidX, the automatic sending of review requests, automated delivery, automatic price adjustments, automatic invoicing and many other functions that make your day-to-day work easier.
#7: Customer satisfaction
Amazon focuses on customer satisfaction. Vendors benefit from this, as the retail giant has a particularly customer-oriented approach to shipping, customer support and returns processing. These tasks are the responsibility of the seller model. Sellers are forced to meet Amazon’s high standards in terms of customer friendliness. If returns processing or customer service do not function satisfactorily, the seller is rated poorly by Amazon customers. This in turn has a negative impact on overall seller performance. In the worst case, Amazon will block the seller account. If you sell via SPACEGOATS, the customer service for all marketplaces lies with SPACEGOATS and you no longer need to worry about this. This is how we can efficiently support you as an Amazon broker.
Handling of compliance tasks
In the case of the vendor program, Amazon as the seller is responsible for the legal issues arising from international sales. With a seller account, however, you must familiarize yourself with the country-specific laws, such as the VAT Directive. As a seller, you are bound by all legal requirements of the country in which you sell. At SPACEGOATS, you will work with the Customer Success Team, who know the compliance regulations and only involve you when they need information from you. SPACEGOATS automatically takes care of all compliance issues that can be clarified without any information from you.
Galaxy Introduction Video
To give you a better feel for what the Galaxy has to offer, here is a short intro video for you:
Find the right model for your company
The fact is, there is no right or wrong and there is no perfect solution. All sales models have their advantages and disadvantages. The decisive factor is that it must fit the situation, your company and your overall strategy. We recommend that you carry out a detailed potential and risk analysis of the models that are suitable for you.
By the way:
If your account or individual listings are already blocked, SPACEGOATS allows you to actively sell again in no time at all. If you want to protect your source of income and reduce the risks associated with a potential account or listing suspension, you can use SPACEGOATS as a kind of inactive backup solution. You only actively use SPACEGOATS when you can no longer sell.
I hope that I have been able to help you at least a little with this overview and give you a good insight into the possibilities of selling on Amazon. If you have any questions or require further information, please book a free, no-obligation appointment at https://spacegoats.io/schedule-a-call.
Galactic greetings
Anton
Pricing
Europe
from € 999
Setup fee
4,9%
Revenue share
from € 999
Monthly minimum fee
all
Features included
Marketplaces included
EN
FR
IT
ES
PL
NL
SE
BE
UK
Setup fee: One-time fee for setting up your GALAXY Account, Onboarding Calls, initial support, and all administrative and operational tasks. We want to make sure that you will get the best and most individual experience and be able to start right away! Compliance check fees are not included.
Revenue share: For all products, SPACEGOATS deducts 4.9% revenue share calculated on the total sales price. The total sales price is the total amount paid by the buyer, including the item price (gross sales). The revenue share applies for every item sold, you will pay SPACEGOATS 4,9% of the total price or a minimum fee, whichever is greater.
Monthly minimum fee: SPACEGOATS charges a 4,9% revenue share with a minimum fee of 999€ /month. If you exceed a monthly revenue of 20.387€ made with SPACEGOATS per account, the minimum fee is reached and the 4,9% applies to further sales.
Marketplaces included: Choose all marketplaces and use the Pan-EU Program, or choose single countries via. Multi-country inventory (MCI). You have the flexibility to choose as many or as few countries as you like. We are able to exclude single marketplaces and still use the Pan-EU Program.
UK Special: Obligatory Label Compliance check to provide you with a UK RP (300£/ Parent ASIN). We take care of the importing process into the UK for you! Extra costs will apply.
US
NEW
from € 999
Setup fee
6,5%
Revenue share
€ 999
Monthly minimum fee
all
Features included
Marketplaces included
US
Setup fee: One-time fee for setting up your GALAXY Account, Onboarding, initial support, and all administrative and operational tasks. We want to make sure that you will get the best and most individual experience and be able to start right away! Compliance check fees are not included.
Revenue Share: For all products, SPACEGOATS deducts 6.5% revenue share calculated on the sales price(net price). The sales price is the amount paid by the buyer, including the item price (net sales price). The revenue share applies for every item sold, you will pay SPACEGOATS 6,5% of the selling price or a minimum fee, whichever is greater.
Monthly minimum fee: SPACEGOATS charges a 6,5% revenue share with a minimum fee of 999€ /month. If you exceed a monthly revenue of 15.369,23€ made with SPACEGOATS per account, the minimum fee is reached and the 6,5% applies to further sales.
Marketplaces included: Only the US marketplace is included in this pricing package. You can also combine packages.