Why Brands Should Prepare for Their Amazon Vendor Central Account to Be Shut Down, and What They Need to Consider ASAP.

In the next few months Amazon looks set to cut ties with thousands of small suppliers in the USA and EU who are reliant on Vendor Central (VC). VC is the platform used by companies who supply to Amazon directly on a First-Party (1P) or B2B2C basis, and as such all goods are ‘Sold by Amazon’. Following a recent report by Bloomberg, this change is expected to leave brands scrambling ahead of the upcoming Q4 holiday quarter (including Black Friday). Merchants at risk include Vendor Central account holders with sales / GMV below an estimated monthly amount of £660k (USD 10 Million p/a). If your turnover with Vendor is under that threshold then you may face a sudden shocking disappearance of all purchase orders without warning.

This is the second warning signal this year that Amazon’s business model is about to undergo a huge change. At Percy Group we saw a sudden total drop of Vendor POs ourselves across a number of VC accounts during this same period in March ’19. The ultimatum from Amazon to those affected is to migrate the management of sales to the 3P Seller Central (SC) platform or force brands to find a non-Amazon solution.

“If this happens soon and people are not ready for it, they will not be ready during the holidays…the people who get ahead of the game are going to thrive”
Anderson Saldado
Former Amazon Vendor Manager 

Amazon has so far denied the news, sending the following tweet:

(Above) Amazon’s tweet in response to Bloomberg’s article. Twitter.

Q: Why would Amazon just shut it down for all those sellers?

A: To cut overheads on staff & platform maintenance, and risk less to capital outlay. Then divert that exact same business to 3P which is already making Amazon a fortune.


Amazon’s staffing overheads are lower to run the Seller Central self-service marketplace than they are for Vendor Central, as the responsibility of buyer invoicing, catalogue amendment, inventory control and a lot of the customer services queries are the day to day responsibility of the merchant. A separate piece in Bloomberg cited a reported initiative at Amazon called “hands off the wheel” which aims to reduce as much human intervention as possible in the retail business.


Site and platform maintenance:

The Seller Central Dashboard has come on in leaps and bounds, while Vendor Central is pretty much still the same old clunky user experience. The cost of running the VC platform alongside SC for the many global Amazon sites would be considerable.



VC forward-orders stock as your trade customer (B2B2C) thus tying up capital. On the marketplace, merchants sell direct to the buyer and only get paid when an item is sold.

A common frustration of Vendor sellers has been the unpredictability of the ‘super-computer’ automated PO system, which often misses key sizes when ordering and yet oddly overstocks huge quantities of single SKUs. This resulting in size or colour variations being left at odds on the site, even when all are in stock at the brand’s distribution centre (DC), and thus risking returns from Amazon of those lines obviously overstocked. In 2017 an anonymous source challenged their Vendor Manager at Amazon’s London HQ over mismanagement of automated POs and asked if a 3P account could be set up to cater for holes in the stock Amazon don’t buy. They were told bluntly “no” while referring to 3P sellers as “the enemy”.

Payment terms are also a frustration to VC users. 60 days terms are default, and very often inventory goes missing and does not get credited even if you have a valid tracking reference. SC pay you fortnightly. This makes such a difference when growing a brand and planning cashflow to pay foreign factories with large minimum order quantities (MOQs) and lengthy lead times to bear even before the items are shipped.

Vendor Central used to be an invitation-only service, exclusive and awarded only to larger, more established brands. The Vendor Express service served to bridge the gap to smaller firms, but it was closed recently due to poor performance. It comes as no surprise that many companies openly admit to having a bad experience with Amazon. They can be reluctant to return despite seeing Amazon’s dominance grow (and their market share decrease), due to platform complexities, increased competition on the site and the overall impression that success on Amazon is a ‘Black Art’.

For international growth, VC is certainly not the only option. SC has a superb Pan-EU Inventory programme and other similar services for markets outside the EU. So, you keep the Prime badge and Amazon’s local customer services teams take care of some of the multilingual customer services, while your goods are shipped everywhere for you. The usual barriers brands think of over international growth are; translation, returns, compliance (tax), exchange rates and revenue intelligence (the bottom line). All these factors are readily mitigated with the array of service providers in the SC ecosystem. It can get messy and complicated but with the right team behind you, international growth can work very well. With Brexit around the corner it’s ‘fight or flight’ for many considering international trade.

“To put it bluntly: third-party sellers are kicking our first part butt badly.”

Jeff Bezzos

CEO, Amazon, Extract from Annual Shareholder Letter

So Why Should Your Brand Take This Seriously?

Brands selling on VC with monthly sales under £660k appear to be most at risk, according to Bloomberg’s sources.

Any brand that had their purchase orders cancelled in March is probably also wise to begin their contingency plans right away. Comfort can be gained in the knowledge that many sellers have made the shift already and have often found Seller Central to offer a better all-round solution regardless

Over the past 3+ years there has been a slow and gradual demise of the VC platform, while simultaneously the SC platform has grown in functionality and started to offer services which were previously exclusive to VC. For example, the VC drop shipping program (Direct Fulfilment) relieved the pressure on Amazon’s Fulfilment Centres and offered a superb perk to VC users, giving the Prime badge to your own warehouse fulfilled orders. This perk died when Seller-Fulfilled Prime came along on Seller Central which is essentially the same thing (Note Percy Group has it’s own EU-wide Fulfilment network which can be used for SFP and off-Amazon sales!)

Some merchants would set up Vendor accounts with no intention of selling on the platform, just to gain access to the tools, but this is less appealing now. One main advantage of VC over SC was that once a catalogue detail page (ASIN) was created on VC, then the content would be locked down, whereas a SC-created ASIN could be messed about with or broken by anyone. Now the Brand Registry program exists for SC-operating brands, thus giving them the same ability to make beautiful branded content and keep it safe, providing you have a valid trademark. There are also superb marketing perks for those enrolled in Brand Registry.


Here’s How VC Brands Can Capitalise by Switching over to Seller Central

1. More Control Over Inventory and Pricing

  • With VC, Amazon control the sale price and do everything they can to win the buy box when fought, even if it means selling at cost. This can infuriate brand owners, putting them in awkward positions over price parity / SSP (MAP) with their off-Amazon distributors. With SC you control the sale price and – if you use the right repricing software – you can gain valuable revenue intelligence data. Profitability can be controlled SKU by SKU, and is set by adding floor and ceiling prices, so that it can price up and down automatically without any user interaction.
  • Listings made by VC often stick out due to their 1-3 basic images, poor bullets, lack of good content and unnecessary (and often unfulfillable) variations. This is often where brands have handed the responsibility of creating the listing to VC, often at inflated cost for doing so, only for them to do a poor job with terrible optimisation.


2. Added Capabilities for Advertising and Merchandising


  • On SC, brands have more product launch capabilities and can utilise promos, voucher codes and so on.
  • Headline Ads (now known as Sponsored Brand Ads), which are the banner ads at the top of the page in search are now available on both platforms.
  • A+ (now called Enhanced Brand Content) which is the elongated extra content at the bottom of the product detail page is available on SC. Note: Display Ads (those that lurk under or alongside the buy box) are yet still to move over to SC, but it may not be too much longer before this occurs as a beta version trial is under way.
  • Brand Stores – which are like a mini website for your own brand are a huge plus for any brand. Now available on SC & VC. Rumoured to be undergoing huge development in a way to absorb business from the likes of Shopify.

For even the most experienced retailers and brands, content listing optimisation takes time, effort and testing. Even trial and error tests (aka split testing or A/B tests) are quicker and easier to manage on SC and works successfully on lines in the most competitive categories. SC can be streamlined with the right partner who has the knowledge, capabilities, the right software and resources, such as Percy Group with it’s Brand Partnership Programme whereby PG staff run all this for you.


That’s All Well and Good, but What’s the Catch? Well Some Considerations Are;


Route to Market Strategy

If B2B2C is the brand’s traditional route to market, then so as not to upset longstanding trade or channel off-Amazon partners, VC can seem like the only viable option. This can be mitigated by finding an existing distributor who has the capability of running SC to best effect without any conflict of interest, providing they have the desire, experience and operational capability to give your brand the same level of dedication needed. A brand may instead seek to source a SC-expert partner organisation to represent the brand properly. This can be a minefield and confusing, as the industry is very fragmented, unless of course you find a one-stop shop provider such as Percy Group.



More operational oversight or management is required. With VC you ship the goods to Amazon and don’t hear much afterwards, whereas with SC you have to deal with every buyer query. Whilst to many brands a direct relationship with the buyer is fantastic, to others it can just be an added cost associated to customer services. Now the responsibility is with the seller to monitor seller feedback, product reviews, handling returns, maintaining seller performance KPIs and metrics such as Order Defect Rate. Get those wrong and your whole Amazon business will suffer.


Accounts and Tax

A good grasp of local VAT regulations is important when calculating Amazon’s different fee structures on SC and VC. The same goes for International VAT rules, as separate VAT registrations and returns are needed if you ship from a different location country. Fulfilment fees and storage fees are other examples of things to get your head around on SC. From an accounting perspective, SC is just a different system for your bookkeepers. If anything, VC is far harder for the bean-counters to understand. Trying to explain how Provision for Receivables, debit notes and COOP deductions work on Vendor is not for the faint-hearted. If you’ve used VC for a while, you’ll be used to the extra time needed in your meeting to explain these things to your Finance Director, and how you need multiple colours of whiteboard marker to hand. SC has the edge on accounts simplicity as ‘normal rules apply’, given your direct relationship with the buyer, but it’s just different to VC which is an extra consideration when migrating.


The Bottom Line

Instead of ‘buying for X and selling for Y’ (minus the dreaded COOP and random fines of course) on VC, with SC you must calculate a whole host of extra numbers to make sure you are selling at the right price including; Amazon’s fees, return costs, shipping and pick and pack fees. Each shipping method you use (FBA, SFP, FBM, SNL, H&L) will have its own fee calculations and you may wish to employ a hybrid of each depending on your strategy. For example, if you use Fulfilment By Amazon (FBA) you should add in transport to Amazon’s warehouses into your calculations, but also run a separate SKU that you fulfil from your own warehouse should FBA stock sell out. Percy Group also run a service to check if refunds are done properly by FBA. It is an issue and needs to be done to avoid losing unnecessary revenue to badly processed refunds.


Competing with Amazon

In Feedvisor’s report Brands & Amazon: Insights, Opportunities, and Challenges in the Age of E-Commerce, more than 500 brands were polled regarding their evolving relationships with Amazon. The report concluded that more than three-fifths of brands (66%) cited competition with Amazon’s private label items — which range from apparel and office supplies to grocery and electronic items — is one of the biggest pain points about selling on Amazon.

There are two solutions here; try to compete with Amazon head to head or consider supplying a range to Amazon Private Brands yourself. At Percy Group we help manufacturers with the set up and running of manufacturing for Amazon Private Label.

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The Final Rundown

Marketplaces are here to stay and are becoming the dominant purchasing resource for shoppers everywhere with over 52% of global eCommerce sales. Last year half of the products purchased on Amazon came from 3P sellers. The business is out there and growing.

At Percy Group, we take a ‘Whole of Amazon’ approach and ensure our Brand Partners do not get lost in the ongoing 1P/3P hybrid debacle. Sadly, in the UK, many smaller brands and distributing firms have been signed up to 1P Accounts when their business model and margins do not support it, with often no knowledge of how 3P works at all. The long-anticipated Vendor Central accounts purge is looking like ‘Christmas-come-early’ for Seller Central users, and ‘Brexit-part-deux’ for those on Vendor Central. The good news for those panicking about opening a Seller Central Account is, there exists a better, more future-proof, more-profitable, all-in-one solution in our Brand Partnership Scheme. The time for VC brands to act is now as procrastination could kill your Amazon business forever.

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Things to Consider Before Jumping Ship to 3P


Key Points

  • Do you have a trademark and is it registered with Brand Registry?
  • How can you lock your content down in VC, and then improve it later?
  • Does your distribution model allow you to sell direct or do you need a third party?
  • Are you concerned about counterfeits or people passing off white goods as your own?
  • Do you know how to calculate revenues accurately to analyse pros/cons of both platforms on an account or sku by sku basis?
  • Would you like to know about what products should sell more and how big the potential is for sales/revenue on each line?
  • How can you deal with trademark infringements and violations?
  • What fulfilment options are available if you must ship yourself on an order-by-order basis?
  • Could your customer services team start to handle the direct relationship queries such as invoice requests, where’s my stuff queries, and product defaults?
  • Do you have anyone in-house who can manage your Amazon PPC and focus on ACOS for each individual line?
  • Can your design team create optimised pages, infographics, brand stores and video?
  • How do you collect Amazon buyer data safely?
  • Would manufacturing for Amazon Private Label be of interest to you?

For answers to these questions and how to migrate from VC, please contact Percy Group and one of our Brand Managers will discuss your needs for free in confidence.