Skubana is now the first platform to support both Amazon Seller Central and Amazon Vendor Central. With our new EDI integration, we can equip sellers who operate on multiple platforms, whether online or in brick-and-mortar stores, as well as both first- and third-party Amazon centrals.
Amazon Seller Central vs Vendor Central
Amazon Seller Central is known as 3P, which stands for 3rd party sellers. Amazon Vendor Central is known as 1P, for 1st party sellers. Both are important because there are pros and cons with each setup.
Third party sellers are independent sellers who use Amazon Seller Central to manage their own inventory levels, add new products, and provide customer service. There are more than 2 million Amazon sellers, with approximately 50% of products on Amazon coming from third party sellers. These sellers go directly to the customer through Amazon’s marketplace, and pay a commission with every sale.
First party sellers sell their products directly to Amazon at wholesale prices, so their products are sold and fulfilled by Amazon itself. Amazon places purchase orders directly to your company, and they manage operations through the Amazon Vendor Central. Registration on Vendor Central is by invitation only, and usually a telling sign of good quality and a popular product.
Third party sellers usually get a bigger percentage of the sale due to no middlemen, have control over pricing and their listings, and can hit the ground running. Big brands are starting to sell directly to consumers, and Seller Central is a great place to learn how to ship direct-to-consumer. With Seller Central, you get more reporting information, and can create products and get traction instead of waiting on Amazon’s choices.
First party sellers don’t have to worry about customer service and fulfillment, can add premium content to their listings, and they get payment from purchase orders instead of individual ones. Sellers are also at risk selling exclusively on Amazon, so Vendor Central acts as an insurance policy. Vendor Central allows you to upload videos and participate in the Amazon Vine program.
Seller Central vs Vendor Central pros and cons
Seller Central Benefits
- Reporting is far more extensive, and you can view dashboard metrics. In Vendor Central, you only get access to metrics for an additional fee.
- 3P sellers get access to promotions.
- You decide how much to stock at Amazon and sell.
- You have more control over your listings, and can set your prices.
- Higher margins, since you don’t have a middleman. Instead of selling wholesale, you’ll sell direct.
- No net 30, 60, or 90 day terms. Amazon pays every 2 weeks.
- You retain control over the brand experience after the sale with direct customer support.
- Amazon takes a flat commission fee vs negotiating a rate. You’ll know exactly how much Amazon will take in advance.
- It’s easier to launch a product and gain best selling rank. For example, if you launch a new product and are a 1P seller, Amazon will only buy a few items to limit their risk.
Seller Central Disadvantages
- Before Enhanced Brand Content, sellers didn’t have access to A+ content.
- With the incentivized review ban, only 1P sellers have access to the Amazon Vine program.
- Instead, 3P sellers have access to the Early Reviewer Program, which is run by Amazon and they take a % of your revenue to get reviews for your product. We believe that reviews help conversion, but they have no influence on your Amazon product ranking.
Vendor Central Benefits
- Amazon takes care of shipping, customer support, and logistics.
- You have the ability to upload video content. Rich content has a huge influence on the conversion rates of your listings.
Vendor Central Disadvantages
- Amazon lures you in with a low rate, then constantly renegotiates terms.
- You lose control of the Buy Box and MAP pricing.
- You don’t have any control over list price.
- It’s difficult to add new products to your lineup.
- It takes a long time to update a product listing if there’s a change.
Why are sellers on both Seller Central and Vendor Central?
Many large brands have been a vendor to Amazon for years, and are cautious about disrupting the relationship, so they test the waters first. Selling directly on Amazon could be more lucrative, but they need to figure that out. Seller Central provides a great training ground for brands that don’t have a direct-to-consumer website. These brands can get started on Amazon, figure out logistics, shipping, inventory management, and analytics ahead of time before starting their own B2C website.
On the other side of the coin, some 3P (third party) sellers are exploring Vendor Central because it’s a solid insurance policy. When you sell on Amazon’s marketplace, a complaint could get you suspended. So 1P (first party) selling is a great backup strategy in case this happens.
We understand the pros and cons of 3P and 1P selling, which is why we now support both Vendor and Seller Central, depending on whatever strategy you want to deploy.
What is EDI?
Electronic Data Interchange (EDI) is the most commonly used B2B e-commerce technology to exchange documents. It is at a basic level, a computer to computer exchange of documents using standards such as ANSI X12, EDIFACT, or XML.
EDI is the standard for e-commerce digital communication because it allows document transfer in real time. This enables instant communication for purchase orders, orders, shipping orders, invoices, labels, and other data to speed up processes. More importantly, because EDI communicates data that is already available, it minimizes manual data entry, improving accuracy while lowering costs and time investment. It allows users to communicate instantly with retailers, third party logistics, and partners, because all data is electronically sent where it needs to go.
EDI allows you to:
- Eliminate manual data entry errors
- Improve communication speed
- Automatically communicate with other companies over FTPS, AS2, SFTP, or other protocol.
- Communicate all your data to every part of your network without spreadsheets
For example, in practice, if you were to integrate EDI for Walmart.com using their logistics, it would allow Walmart to instantaneously communicate product orders to you, you to communicate shipping labels back to Walmart.com, and so on.
Benefits of an EDI
The current process for Vendor Central sales without EDI is as follows:
- Amazon releases Purchase Orders to suppliers on a periodic basis
- Your email regarding the purchase order.
- You must log into Vendor Central to confirm the Purchase Order
- You create a routing request,
- You print shipping labels
- You manually update shipment tracking
- You create an invoice.
This process requires multiple manual steps, where it is easy to make mistakes and can take some time.
With EDI, most of these processes are automated:
- You receive an EDI 850 with new purchase orders
- You review the purchase orders and send back an EDI 855/ Purchase order acknowledgment. This includes delivery confirmation and backorder updates.
- You automatically send a routing request with EDI 727 with all relevant details.
- Amazon automatically sends a return confirmation with the assigned carrier and Amazon Reference Number with EDI 737.
- You ship the product and send EDI 856 with Order Number, Quantity, Carrier, Tracking Number, Delivery Date, and Amazon ASN.
- Your system automatically sends EDI 810 with an invoice for the item.
In short, EDI allows you to eliminate a great deal of manual processing and communication to improve shipping speed, processing, and accuracy for orders. Because EDI can respond in real time, you can also greatly improve how quickly you move products from order to shipment because notifications are instantaneous.
Skubana EDI allows integration with multiple platforms
While Seller Central has an API, Vendor Central does not (yet). Skubana now supports the Vendor Central integration via EDI on our platform. EDI allows us to connect to Amazon Vendor Central and Walmart DSV, plus countless other nationwide retail stores (Costco, Neiman Marcus, and more).
EDI is most commonly utilized for e-commerce stores integrating with big box retailers, but it has numerous additional applications.
- Integrate with trading partners
- Improve communication with third party logistics to speed up shipping
- Improve communication with warehousing by offering real-time data transfer
- Improve multi-warehouse and brick & mortar store to online communication
EDI is a valuable tool for e-commerce businesses of all sizes, and Skubana is proud to offer it to our sellers. We integrate with multiple EDI providers, such as B2B Gateway, CartRover Integration Solutions, and Crossfire EDI to access SPS Commerce, so our sellers can take advantage of everything EDI has to offer and integrate directly with Walmart, Amazon Seller Central and Vendor Central, and other national retailers.
Still need help deciding? Check out our video on the Pros and Cons of IP vs. 3P and don’t forget to SUBSCRIBE to our channel for more tips!
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