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Pros and Cons of Amazon Seller Central API vs. Vendor Central API in 2022

There are so many reasons to consider starting an online business on Amazon. As the world's biggest e-commerce space, more and more sellers are flocking to the platform and actually succeeding. 

But to make it on Amazon, you must first understand how it works. Amazon offers two ways for sellers to sell on the platform - the Amazon seller central API and the vendor central API.

With Amazon seller central API, you act as a third-party seller, a convenient and profitable move for any business. On the surface, receiving a vendor invitation from Amazon is one of the most thrilling experiences for any seller. However, before making that switch, you must understand the conditions and decide if the option is what is right for your business.

In this blog, we will compare the Amazon seller central API and the vendor central API, their pros and cons, and which option is best for your business. Keep reading to find out more.

Find out what will suit your business best. Amazon Seller Central or Amazon Vendor Central

What is the Amazon seller central API?

The Amazon seller central API is a web interface for marketplace sellers. It is the ideal solution for distributors and brand owners who want to sell their products directly to Amazon's customers.

Amazon's fulfillment policy provides two options - Fulfilment by Merchant (FBM) and Fulfilment by Amazon (FBA). FBM is ideal for distributors who prefer fulfilling customer orders in-house. If you choose the FBM option, you are responsible for pricing goods, shipping, and providing ongoing customer support.

On the other hand, with FBA shipping, Amazon handles everything, including shipping, returns, and customer support for distributors in the FBA program. Your responsibility as a seller is to ensure that your goods reach Amazon fulfillment centers. If you don't want to deal with the hectic part of running an Amazon business, like customer support and ensuring goods are shipped on time, FBA is a great option.

It's also an ideal option if you don't want to deal with the hectic part of running an Amazon business, like customer support and ensuring goods are shipped in time. That way, you can concentrate on other pressing issues like promoting your e-commerce business on various platforms.

What is the Amazon vendor central API?

As the name suggests, vendor central API is a web interface for distributors selling their products directly to Amazon. Unlike the Amazon seller central API, vendor central API is by invitation only.

First-party distributors are invited to sell their products in bulk to Amazon. The e-commerce giant then resells these products to its customers. As a result, Amazon has control over various critical logistic aspects. For example, they can change a product's retail pricing to suit them.

While the option helps large distributors move products fast, there's a downside. Amazon requires you to pay storage fees for slow-moving products taking up their warehouse space.

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Which type of Amazon seller uses each?

Amazon has two main categories for sellers using the platform - first-party and third-party sellers. First-party sellers make their sales directly to Amazon. As a result, the vendor central API is perfect for wholesalers and vendors with the resources to fulfill bulk orders.

On the contrary, third-party sellers sell directly to Amazon customers making the Amazon seller central API perfect for small-scale retailers and distributors. With this option, you can either sell already branded products or sell products under your own brand. As a third-party seller, you have more control over your inventory. For instance, you can put up new, used, or refurbished items for sale as long as you don't violate Amazon's terms regarding the condition of goods you can sell.

Which is best for you business? Seller Central or Vendor Central?

Differences Between the Amazon Seller Central API and Vendor Central API

Understanding the differences between the two account types will help you make the best choice for your business. The apparent difference between the two programs is who buys your products.

First-party sellers sell directly to Amazon. The main incentive for picking this program is its high sales potential. Additionally, first-party sellers can leverage Amazon's extensive network to advertise their products.

The trade-off is that first-party distributors must sacrifice their ability to control their products' crucial aspects. For instance, Amazon retains the right to influence any vendor's product retail price.

Contrarily, third-party sellers fully control pricing and other aspects of their inventory. Moreover, marketplace sellers have access to Amazon's impressive analytics platform. The downside is that anyone can apply for a seller account. As a result, the marketplace scene is very competitive. Furthermore, third-party sellers spend more on average to attract and retain customers.

Another notable difference is in logistics. The strict logistic requirements set for vendor accounts can result in a vendor paying costly chargebacks if they can't fulfill orders. On the contrary, third-party sellers enjoy flexible logistic requirements since they are responsible for their inventory.

However, first-party sellers can efficiently market their products thanks to their wide range of advertising options. Sadly, this is not the case for seller central accounts. Amazon offers sellers very few advertising possibilities in this space, making it hard to compete against businesses with large advertising budgets.

Finally, third-party accounts follow traditional seller-customer relationships making transactions straightforward and easier to process. On the other hand, first-party transactions follow a complex sale process set by Amazon.

Amazon seller central API vs. vendor central API pros and cons

Let’s look at each type of account's advantages and disadvantages so you can make the best decision.

Amazon vendor central pros

  • Advanced advertising options: This is a significant reason to consider switching to a vendor central API. As a first-party seller, you can leverage the exclusive Amazon Marketing Services (AMS) to advertise and generate interest for your brand. While third-party sellers can also access AMS, the advertising options are limited.
  • Consumer trust: Customers are more likely to purchase products directly from Amazon. Shoppers know that Amazon won't sell counterfeit or defective products. In short, vendor seller access acts as an Amazon stamp of approval for your brand.
  • Less responsibility: Vendor accounts are easier to manage, thanks to the straightforward business model. The biggest concern for a first-party seller is blundering into chargebacks and balancing the books. On the other hand, third-party sellers are responsible for every sales detail, including inventory loss and taxation liabilities.

Amazon vendor central cons

  • Pricing: Amazon is not obligated to follow the Minimum Advertised Pricing. The platform retains the right to adjust retail prices when necessary.
  • Invite only: Unfortunately, vendor accounts aren't open to all suppliers. Amazon only invites distributors and manufacturers able to meet its strict requirements. However, if you are interested in selling as a first-party seller, you can request access to kick-start the vetting process.

Amazon Vendor Central Pros and Cons

Amazon seller central account pros

  • Fulfillment by Amazon: This service is a godsend for small retailers struggling with delivery and customer service. With Amazon FBA, you can focus on crucial tasks such as advertising since Amazon does the heavy lifting of fulfilling customer orders. The best part is that Prime Eligible FBA products can increase your profit margins.
  • Simple transactions: Third-party sellers enjoy fast payments thanks to the straightforward, traditional customer-vendor interaction. Additionally, seller accounts receive biweekly payments increasing the chances of marketplace sellers being more cash solvent than first-party sellers.
  • Price control: Third-party sellers retain the right to maintain the minimum retail price for products in their inventory. Therefore, you can adjust your prices to match demand and competitors.

Amazon seller central account cons

  • Overwhelming responsibility: Managing a seller account is easier said than done. The seller central API has a steep learning curve since you have to master the interface and complex advertising tools while managing the logistics of the account.
  • Intense competition: Seller accounts are open to anyone who wants to try the e-commerce business. That makes the marketplace scene very competitive. Moreover, Amazon will first boost first-party products making it harder for third-party ads to rank high in Amazon's Sponsored Ads.

Amazon Seller Central Pros and Cons

Which is right for you?

So, which is the best choice between Amazon seller API and vendor central API?

It all comes down to your business objectives. Vendor accounts are easier to manage since Amazon does most of the work. Additionally, this option gives you access to robust advertising and marketing options that help your goods move much faster.

On the other hand, seller accounts have fewer logistical requirements making them ideal for small retailers. This option allows you to control your retail prices and set competitive rates. If that’s the route you wish to take, you’ll hope to be invited to Amazon’s exclusive vendor API.

What do you think? Which API sounds right for your Amazon business?

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