By now, we all know that when it comes to eCommerce, Amazon is king. As either an Amazon Vendor or an Amazon Seller, Brands can reach consumers 24/7 with the right advertising strategy. However, a common question we receive is “what is the difference between a Vendor and Seller?” or “How do I know what my company is eligible to become on Amazon?”.
While both classifications allow brands to advertise on the platform, there are some key differences.
First-Party sellers provide their product stock directly to Amazon in advance and then Amazon will sell products to consumers directly on their platform. Amazon handles aspects of inventory, logistics and pricing. There are many benefits to this, namely easier access to include your products in “Prime” classification, which Amazon users covet highly. On the marketing side, you also have access to enhanced content marketing features within the advertising suite. Conversion rate is typically much higher as a vendor, but profit margins on sales are somewhat lower.
Third-Party Sellers list their products on Amazon and manage all aspects of inventory, logistics and pricing themselves. While this provides a higher profit margin than being a vendor in most cases, the volume of conversions is typically much lower than having prime items as a vendor directly through Amazon. You also lose out on certain ad types within the marketing suite.
While the goal of most brands should be to become a vendor on Amazon, we typically see that newer retailers on the platform will need to showcase some sales volume and success as a third-party seller first. In some cases, vendor/prime approval may be granted upon application, but only for a select number of products in your catalog. In both cases, Amazon is likely looking at it as a test to see if eligibility as a vendor or an expanded product offering is warranted for your brand.
For both classifications, Amazon PPC campaigns are crucial to boosting performance and increasing visibility to your target audience on the platform. For brands that are both new to Amazon or have a presence already, we can help amplify performance. Reach out to the MoreVisibility team today with any questions.