Today, Amazon offers 2 platforms for sellers to launch and manage their products: Seller Central and Vendor Central. This system has essentially divided wholesale (first-party or 1P) and marketplace accounts (third-party or 3P). But recently, there have been signs that Amazon is streamlining to a single platform: ‘One Vendor.’
One Vendor won’t allow brands to distinguish between 1P or 3P and will essentially force all sellers to use the same platform. One Vendor may determine whether each product is sold 1P or 3P, but this choice won’t be left to the sellers anymore. Let’s analyze recent signs that Amazon could be initiating this change.
Signs that One Vendor Is Coming Soon
There have been several red flags in recent weeks that indicate a change might be coming. Here are just a few.
- Reduced Amazon Orders: Early last week, many brands were surprised to see that Amazon didn’t place their usual order. Some sellers received notifications that it was just a technical error, but others were informed that Amazon just didn’t want to make the purchase.
These sellers, however, were doing $10 million annually or less selling products that have a high shipping cost. Additionally, many of them didn’t have assigned Amazon vendor managers. If your business falls into this category and you didn’t receive a notice from Amazon, be prepared because you might be seeing a similar message.
- Zero Inventory: A number of brands using the Direct Fulfillment model saw their inventory drop to zero. These sellers ship orders directly to customers instead of routing them through Amazon warehouses. This reset of inventory left them without the ability to receive and fulfill their orders.
- Dictating 1P or 3P: It’s also been noted that Amazon is also notifying Vendor Central accounts that they should move to Seller Central. This change has made some 1P sellers very happy because 3p sellers experience more freedom when it comes to branding and prices.
Additionally, Amazon has been shutting down businesses that sell simultaneously on 1P and 3P platforms. These businesses were forced to eliminate their 3P listings.
The most alarming part about these changes is that Amazon didn’t give brands any notice. Because any change in Amazon accounts can result in changes in sales, this could be alarming for many sellers. But perhaps these changes would be more welcomed if sellers were given a head’s up.
Implications of Launching One Vendor
While these signs do point toward One Vendor, sellers may still have some time before the new system is launched. However, if Amazon does launch One Vendor, how will that affect sellers?
Here are some potential implications of launching the new system.
Moving to a single seller platform would obviously be more efficient. By streamlining 2 essentially identical platforms to 1 system, there would be less human overhead to manage the suppliers, resulting in big savings for Amazon.
Amazon could potentially get a clearer idea of what customers are doing on the platform. RIght now, it tracks data for Seller Central and Vendor Central, but aligning the separate systems could provide insight that Amazon hasn’t had before.
Currently, sellers have the ability to dictate whether their product is sold as 1P or 3P, but soon Amazon may be taking over that responsibility. That takes some freedom from the seller and gives it back to Amazon.
Tensions have been rising over the past few years between e-commerce giants and resellers. One Vendor may help to reduce this tension as it decides what ASINs can be sold and how.
At the end of the day, Amazon is a business, and businesses want to make money. One Vendor may charge fees to 3P sellers, undercutting profit margins for sellers and exercising more control over prices.
Sellers should expect to see more signs that One Vendor is on its way. For information on how your Amazon business can prepare for the change, reach out to our Amazon experts!