While some sellers fulfill their own orders, a large percentage of Amazon sellers earn a living using the Fulfilment by Amazon (FBA) model. There is another option, though, which is selling via Amazon Vendor Central.
In this blog, I will cover what you need to know about this program and how to become an Amazon vendor.
This is an interesting topic I’ve wanted to write about it for some time!
What is the Amazon Vendor Program?
Direct manufacturers and distributors mostly use the Amazon Vendor Program.
Once you are part of the program, you make it possible for Amazon to order your products in bulk. However, this also means that Amazon has full control over those products once the order is processed, including the selling, pricing, and distribution.
Many of today’s vendors started on Seller Central to generate demand for their products. Why is this important, you ask? Because the Amazon vendor program is invite-only.
Let me unpack this a bit more.
How to Become an Amazon Vendor
As I mentioned, the only way to become a vendor on Amazon is via an invite. Here are some of the ways that you can potentially receive an invite:
- Maintaining excellent sales numbers. By becoming a recognized brand on Amazon, you have a higher chance of becoming a vendor. Amazon wants to sell products in high demand, so making more sales and maintaining those numbers could get you into the program.
- A buyer rep invites you. Every category you see on Amazon is assigned to a buyer rep. These reps can also invite brands and sellers to the Amazon Vendor Program. If they believe your product has potential, you might receive an invite.
- Attending trade shows. Showcasing your products at trade shows could get you recognized by an Amazon buyer, who could send you a vendor invite.
- Request an invite from a buyer. If you really wanted to, you could also find out who a particular category buyer is and contact them directly about your product. Unfortunately, this approach hardly ever works. Your efforts would be better spent increasing your sales numbers.
Once you receive an invite to the Amazon Vendor Program, you need to set up your account by entering all the necessary information and accepting the trading terms. This includes details such as your banking information and the returns address; before you sign the terms and conditions, make sure you fully understand what you are signing; at this point, I’d recommend using a lawyer.
You will need to wait for final approval from Amazon before you can start trading. The process is somewhat lengthy, but once you’re set up, things get simpler.
How Much Does It Cost to Be a Vendor on Amazon?
Amazon vendors need to accept specific trading terms, which are different from traditional seller accounts. Once you sign up for the program, you can choose from one of three plans:
- Net 90 Plan: Vendors receive payment after 90 days.
- Net 61 Plan: Vendors receive payment after 61 days.
- Net 31 Plan: Vendors receive payment after 31 days.
In terms of the fees you need to pay as a vendor, there are several:
- Marketing: Fees related to the advertising and marketing of your products.
- Packaging: Fees related to the fulfillment and shipment of your products.
- Remittance: Fees related to transferring funds to your business.
- Co-Op: Fees related to hosting your products.
The specific amount you pay depends on specific factors such as the cost and size of your product and how many units Amazon orders.
I hope you now understand more about how to become an Amazon Vendor.
If you are interested in the Amazon Vendor Program, I highly recommend you sign up for a Professional seller account first and work on getting your numbers up.
You should also know that you don’t need to accept an invitation to this program. If you are not happy with the trading terms and feel you would earn more with FBA, that is entirely your choice.
I think the traditional amazon seller account route is better, you have far more control over your products, and you are forced to learn a lot more about marketing.
Amazon is the biggest marketplace globally for a reason; I think you should learn to sell on it.
The question most sellers ask is how do I get on page one? I’ve put together the video below to help you understand how we do it.
Have a look at the eBusiness Boss Ultimate Private Label Course if you want to learn everything we know about selling on Amazon.