Guaranteed distribution and customer trust: top reasons to be a Vendor on Amazon

We’ve done a lot of stuff over the past few months about the ‘hidden gems’ of the Vendor Program — but not all of its gems are so well hidden.

Here’s a basic guide to what the Vendor Program is and why it might be best for your brand.

What is the Vendor Program?

Brands selling on Amazon have three types of account to choose from: sell TO Amazon (the Vendor or 1P option), sell ON Amazon (the Seller or 2P option), or find a partner to sell for you on Amazon (the 3P option).

The 1P option basically makes Amazon your distributor. Amazon buys your products, and sells them at whatever price it likes.

The main requirement is that you have good, local warehousing facilities, so you can deliver products in bulk to Amazon within five days.

Why become a Vendor?

It’s usually a very good guarantee that your products will sell: Amazon often gives its own products the buy box, and consumers like to buy the stuff Amazon is selling itself, thanks to both Amazon Prime and trust in the Amazon brand.

Continental set-up is much easier for Vendors than for Sellers. You don’t have to worry about paying VAT in lots of different countries, for example.

Any other benefits?

Yes, lots — protection against account suspension; being able to join Special Programs, like Amazon Showroom and Amazon Pantry; sending samples with the new Sampling Program. For more on all those, see our Hidden Gems blog.

Are there any risks?

Sometimes Amazon labels Vendor products as ‘CRaP’ — not very polite, but it stands for ‘Can’t Realise any Profit’, and it’s their term for when products are not profitable.

This isn’t necessarily your fault — it’s based on the market prices, so it may be because the buy box is too low, and/or logistic costs are too high. But if it happens, Amazon will reduce or stop their orders of your products. There are ways to prevent it, though.

How do I become a Vendor?

Like all the best parties, it’s invitation only. But talk to us, because we might be friends with the doorman.