Vendors (or 1Ps) selling on Amazon have employed an array of strategies in an effort to maximize their presence on the channel. On the other hand, many have instead followed a path of least resistance, thereby overlooking an opportunity to evaluate the channel on a foundational level. After decades of working within a standard vendor-retailer relationship, many national brands and large manufacturers have followed a similar approach with Amazon simply due to efficiency and familiarity. Ultimately, though, there are many more considerations in the Vendor/Seller landscape, and with this lies significant opportunity. Each avenue has a myriad of pros and cons that affect how a brand fulfills, markets, and profits from its products. This webinar outline's many of the factors a Vendor should consider when evaluating Seller Central and the best ways to maximize profitability and increase sales through a Hybrid Model.

2. ABOUT MPS
• Full-service Amazon agency, taking a proactive, strategic
approach focused foremost on sales acceleration
• Clients include Fortune 50 companies, mid-sized
organizations, and startups
• Brands ranging from grocery, personal care, home
improvement, home & kitchen, gifts & novelties, electronics,
apparel, accessories, furniture, books, and more
• Team includes strategists, designers, writers, and advertising
specialists focused exclusively on Amazon
• Managed more than $125 million in Amazon revenue in 2017
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marketplacestrategy.com /company/marketplace-strategy

3. marketplacestrategy.com
HOUSEKEEPING
• Session recording & slides will be sent out as a
follow up
• Submit questions to our strategists using the
question window
• Email me for any additional resources or
questions following the webinar
• Vendor Central vs. Seller Central Calculator

4. Sam Jennings
Lead Amazon Strategist,
Marketplace Strategy
TODAY’S SPEAKERS
Curtis Rummel
Lead Client Strategist,
Marketplace Strategy

5. 1. Overview of Vendor Central and Seller Central
2. Vendor vs. Seller Marketing Considerations
3. Vendor vs. Seller Cost Analysis
4. Why the Hybrid Model?
5. Questions
TODAY’S AGENDA
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6. • Amazon proposing unreasonable term increases
• Constant emails from Amazon requesting funding & asking for lower costs
• ASINs CRAP’ing out unexpectedly
• Ongoing, confusing and incorrect chargebacks
• Amazon breaking MAP or channel pricing issues
• Amazon not ordering enough, leading to frequent stockouts
• Slow product launches
DO ANY OF THESE SOUND FAMILIAR?
marketplacestrategy.com

7. The Hybrid Model is a strategic approach to
Amazon.com, which consists of employing both
Vendor Central and Seller Central to maximize sales,
profitability, and versatility on the channel.
WHAT IS THE HYBRID MODEL, ANYWAY?
marketplacestrategy.com

8. VENDOR CENTRAL VS. SELLER CENTRAL
OVERVIEW

9. Amazon.com
Vendor Central
(1P)
Purchase
Orders
(PO)
Direct
Fulfillment
(DF)
Seller Central
(3P)
Fulfillment by
Amazon
(FBA)
Fulfillment by
Merchant
(FBM)
marketplacestrategy.com

10. • Vendor Central
o Amazon Retail purchases product from brand and sells to end consumer
o Paid up front as Amazon takes ownership of product
o ‘1P’, ‘Direct’, ‘Retail’, ‘Vendor’
• Seller Central
o Brand sells direct to the end consumer
o Paid on consignment every 14 days
o ‘3P’, ‘Seller’, ‘Merchant’
INTRO & JARGON
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11. • Vendor Central
o Heavily reliant on case ticket system and the Retail Business Service (RBS) team
o May have contact with Buyer or VM, depending on size relative to category
o Transitioning to be more self-service
• Seller Central
o Platform is more self-service and provides case system/various support teams
o Sales/customer data is much more in-depth
PLATFORM &
RELATIONSHIP
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12. • Vendor Central
o Purchase Orders (placed by Amazon, based on forecasted demand)
o Direct Fulfillment (DF) – Vendor ships direct to end consumer
• Seller Central
o Fulfilled By Amazon (FBA) - Amazon stores inventory and handles pick, pack, & ship
o Fulfilled By Merchant (FBM) - Seller ships directly to end consumer
FULFILLMENT
OPTIONS
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13. • Vendor Central
o All methods (POs and DF) show the Prime badge in search and on listings
o DF reads, “Usually ships within x to y days”
• Seller Central
o FBA is always Prime
o FBM is not, unless the Seller is enrolled in Seller Fulfilled Prime (SFP)
PRIME
DESIGNATION
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14. • Vendor Central
o Amazon handles inventory forecasting and management
o Vendor has minimal influence over PO timing, frequency, or order quantity
• Seller Central
o Seller responsible for forecasting and managing inventory
o Seller sends in FBA inventory, based on forecasts and desired coverage
INVENTORY
MANAGEMENT
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15. • Vendor Central
o Amazon controls the retail price and will fluctuate above or below MSRP to maintain
Buy Box ownership, price match, and to optimize for sales
• Seller Central
o Seller has full control over price and can update at any time
PRICING
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16. MARKETING
CONSIDERATIONS
SELLER CENTRAL
• Limited promotions (only have access
to recommended Lightning Deals)
• More coupon variety, not visible in SERP
• Advertising: SPAs and HSAs
• Enhanced Brand Content
• Early Reviewers Program
• Customer communication
• Stronger detail page analytics
VENDOR CENTRAL
• More promotion types and freedom in
creation
• Coupons display in search results
• Advertising: SPAs, HSAs and PDAs
• A+ Pages (premium A+ coming soon)
• Vine Program
• Detail page videos
• Additional programs: PrimeNow,
Sampling, Pantry, etc.

17. VENDOR CENTRAL VS. SELLER CENTRAL:
COST ANALYSIS

18. Vendor Central Terms (off Cost Price)
Terms Discount 2%
Co-Op (MDF) 10%
Freight Allowance 5%
Damage Allowance 2%
Chargebacks 1%
Seller Central FBA Fees (off Retail Price)
Referral Fee 15%
Monthly Storage Based on Size of Product
Fulfillment Fee Based on Size/Weight of
Product
Ship to Amazon Based on shipment
Monthly Fee $40
marketplacestrategy.com
COST BREAKDOWN
Terms can range significantly based on product & category

19. 30% Terms
Seller Central FBA Cost Calculator
marketplacestrategy.com
PROFITABILITY ANALYSIS

20. 20% Terms
Seller Central FBA Cost Calculator
marketplacestrategy.com
PROFITABILITY ANALYSIS

21. WHY USE THE HYBRID MODEL?

22. 1. CONTROL AND
MAXIMIZE PROFITABILITY
CHALLENGE:
• Vendor Central items may be less profitable
and costs are continuing to increase
• Vendor chargebacks are a recurring and
growing cost
ACTION:
• Evaluate catalog to understand profitability
• Move less profitable or high-chargeback
ASINs to SC
marketplacestrategy.com

23. 2. OVERCOME PRICING &
CRAP ISSUES
CHALLENGE:
• Amazon Retail has an increased focus on
profitability
• Amazon fluctuating price points due to 3P
competition or price matching, causing
channel conflict or MAP issues
ACTION:
• Analyze Vendor catalog Fast Track Buy Box
ownership to identify potential CRAP ASINs
• Move CRAP’d out ASINs to SC
marketplacestrategy.com

24. 3. AVOID STOCK OUTS
CHALLENGE:
• Amazon frequently not ordering enough
• Stock outs causing long-term negative impact on
sales
• Examples include: Products with unstable supply
chains, high seasonality, and/or off-Amazon
promotion
ACTION:
• Utilize FBA “Safety Net” strategy for high velocity or
frequent stock-out ASINs
marketplacestrategy.com

25. 4. ACCESS ADDITIONAL
MARKETING & TROUBLESHOOTING
TOOLS
CHALLENGE:
• Vendors are not maximizing their marketing
potential when utilizing only the VC platform
• Lack of sales insights on VC
• Vendors have less control over 3P listing content
ACTION:
• Utilize SC to access additional marketing tools that
aid product launches and sales acceleration
• Access two avenues to troubleshoot issues and
more specialized support
marketplacestrategy.com

26. 5. NEW PRODUCT
LAUNCHES
CHALLENGE:
• Creating products and receiving initial POs in
Vendor Central is extremely slow and not
conducive to a successful product launch
• There are typically multiple stock outs during
product launches through VC
ACTION:
• Create items quickly in Seller Central with
complete inventory control and access to
additional launch marketing tools
marketplacestrategy.com

27. TAKING THE NEXT (FIRST) STEP

28. TAKING THE
NEXT (FIRST) STEP
1. Create an account (there’s no reason not to!)
2. Analyze catalog for best opportunities
• Conduct a profitability analysis
• Conduct a CRAP analysis
• Any upcoming product launches?
3. Apply for Brand Registry for all brands
4. Crawl… walk… run!
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29. QUESTIONS

30. THANK YOU
More questions or interested or talking about the hybrid model?
Contact:
Sam Jennings- sam@marketplacestrategy.com
Curtis Rummel- curtis@marketplacestrategy.com
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