Marketplaces Mike Shapaker By Mike Shapaker

Making Sense of Amazon’s New Restrictions for Wholesalers in Vendor Central

Amazon made waves across the e-commerce industry this week after news emerged that it changed certain policies regarding manufacturers and how they can sell products to and through the retail giant.

In short, many wholesale vendors were encouraged by Amazon this week to start selling direct to consumers via Seller Central while other vendors were encouraged to drop their direct-to-consumer operations altogether.

Here’s how it started. As reported by Digiday, thousands of Amazon vendors failed to receive their regular purchase orders from Amazon on Monday. After inquiring about the issue, the vendors received a variety of responses from Amazon that ranged from apologies for the technical glitch to news that all of their Vendor Central listings would be deactivated.

A few of the most common responses (compiled by Ideoclick):

  • A huge set of vendor codes belonging with Amazon are being deactivated as the products listed under such Vendor Central accounts have more potential sales if associated to the Seller platform of sales on the Amazon website.
  • At this time, we are not placing any purchase orders on your products. To preserve the customer experience, the featured offer will be disabled when the product is out of stock. We will notify you if we choose to place any purchase orders.
  • We had vendor central issues that affected several vendor’s purchase order transmissions this Monday. We sincerely apologize for the inconvenience caused.

At the same time, Digiday also reported that other large vendors have been encouraged to limit or cease their direct-to-consumer selling operations via Seller Central.

Though Amazon has not made any official statement regarding the change, many agency executives speculate that Amazon is sorting brands into a specific classifications (e.g., supplier, vendor, seller) based on several factors, potentially including revenue, profitability, sales velocity and others.

Hybrid selling — leveraging a wholesale relationship with Amazon while also listing some products as a retailer in Seller Central — has been an increasingly popular strategy for brands in recent years. But with Amazon apparently drawing more distinct lines between which vendors it will buy wholesale from and which vendors must sell on the marketplace, this strategy seems likely to become increasingly rare in the years to come.

So what does this development mean for you?

This decision by Amazon seems to have been building for a couple years but has still caught many brands by surprise. There’s obviously a lot of speculation about what this move means for the future of manufacturers/vendors on Amazon and whether these notifications represent a big shift in strategy.

Regardless, if you’re a vendor impacted by the issues outlined above, or you haven’t had clear communication about your vendor status with Amazon, you should consider opening a Seller Central account immediately.

ChannelAdvisor helps thousands of customers, including hundreds of leading brands, navigate Amazon and other e-commerce channels. If you have questions or need assistance with Seller Central, please reach out to one of our e-commerce consultants.

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