When you are an Amazon Vendor (1st party seller), you simply invoice Amazon directly for your products, and they pay you on whatever terms you have negotiated with them. Amazon then takes charge of listing creation & promotion.

When you are a 3rd Party seller, you aren’t selling “to” Amazon. Instead,  you are selling “on” Amazon. That means that you (or us) must create and promote your product listings – and there are a LOT of “moving parts” that need to be managed to get the most out of Amazon.

Now here’s the BIG difference between 1st and 3rd Party Seller:

With 1st Party, Amazon will not agree to honor your MAP pricing and whenever their price drops below MAP, which it often will, your brick and mortar retail partners will waste no time telling you how much they don’t appreciate this.

As a 3rd Party seller, you can set your own pricing as long as you have registered your Brand on Amazon:

• Register your brand with Amazon
• Implement a MAP Policy for companies who sell your products on Amazon
• Implement a Reseller Agreement for all buyers of your products to follow

1st Party: Vendor Central
Amazon’s Vendor Central is where companies act as a wholesaler and have a direct relationship with Amazon Retail. Amazon issues purchase orders to these vendors, the vendors fulfill those purchase orders and ship their products directly to Amazon’s fulfillment warehouses, where Amazon stockpile all the goods and distribute.

You can tell which items on Amazon are provided by Vendor Central partners because there’s usually a blurb in the description that reads “Ships from and sold by Amazon”.

Below are a summary of advantages and disadvantages.

Advantages:

• Economies of scale – bulk purchase orders from a retail giant i.e. Amazon
• Amazon A+ content – multiple product images, product videos, product review videos, but it comes at a cost
• ASIN (listing) optimisation – listing priority since Amazon is incentivised to sell your inventory
• Amazon Prime – access “free” 48-hour shipping incentivises buyers to purchase those products
• Credibility – for your brand among skeptical and careful consumers since your products are sold directly by Amazon
• Support – dedicated access to Amazon’s customer service staff, but only if you are a big client
• Amazon Retail takes the burden of forecasting and creating replenishment orders for wholesale suppliers
• Vendor Central – access to marketing and seller promotions as well as control over listings and shipping options
• Customer challenges – no need to ship directly to customers and deal with customer returns
• Amazon takes care of fraudulent customer or competitor situations

Disadvantages:

• Loss of control – Amazon set sales targets, but if sales aren’t making target you need to spend more on incremental merchandising or you will get less attention from Amazon to drive sales
• Loss of pricing control – Amazon has the right to sell at whatever price their automated system decides – can be below your minimum advertised price (MAP) policy
• Reduced margins – your margins are reduced since you’re selling at wholesale prices, not retail prices. Amazon will negotiate hard and ask payment of 4-10% to help cover marketing costs and other ‘chargeback’ costs
• Paid support – you need to spend to gain attention from Amazon Retail – they may also increase fees at any time for ongoing costs
• Inflexible content – all images and content need to be approved by Amazon, which is often a lot more conservative in what it allows
• Longer payment terms – Amazon typically offers 2% Net 30 day, Net 60 day, or Net 90 day terms
• Paid Analytics – now that you’re making more money you need to pay for your data
• Packaging Requirements – shipping to Amazon warehouses are your responsibility & may not be accepted if incorrect
• Location – US sales only, but you can gain separate approval to sell into Mexico and Canadian markets

3rd Party: Seller Central
You’ll probably be a third-party (3P) seller and you’ll use Seller Central, which is open for anyone if you’re first setting up. You can still choose to use Fulfillment by Amazon (FBA) so that Amazon processes and ships all your orders. Alternatively, you can handle shipping all by yourself. Or you can work closely with an existing trusted 3P seller.

When you set up as a 3P seller you can choose between an “Individual” (listing under 40 items per month)  or “Professional” (list over 40 items) seller, which will impact your selling fees and Amazon tools available.

Here are some more specific advantages and disadvantages you should be aware of.

Advantages:

• Control – you decide what you are selling, when, and for how much
• Brand control – you can list your products accurately and ensure products are represented the way you want
• Flexibility updating product images, titles, bullet points, description
• Greater profit margin for retail – up to you what you want your pricing to be and adhering to your own MAP policy
• Free analytics – but not as in depth as you really need it to be if you want your business to grow
• Seller support – responds and fix problems with your listings and inventory and payments
• Costs – cheaper than the 1P option. Fixed by category as a percentage of the selling price (typically between 8%-20%), and there are no additional selling fees to consider (unless using FBA)
• Quick payments – you get paid within 14 days
• Fulfillment By Amazon – you don’t need to worry about shipping, returns, or customer service. Pricing is also competitive with the costs a seller might incur themselves fulfilling an order
• Paid advertising available – Sponsored Product Ads and Headline Search Ads using campaign management tools
• International access – everyone who has internet access can buy your products

Disadvantages:

• Lack of brand awareness – unless you’re using content marketing, product ads, or social media strategies your customers may not find your product
• Smaller volumes – this may be a positive at first, because you will be selling less product and making a profit, but might change over time
• Enhanced Brand Content (EBC) – only permitted for sellers who have setup on Brand Registry plus approval required
• FBA Shipping Fees – Shipping to the Amazon Warehouse is your responsibility and if you do not sell your items quick enough you may have to pay Amazon storage fees
• Variability on customer service, the onus is on the seller to deal with customer complaints plus fraudulent customers and competition

No. Absolutely Not. We do NOT require exclusivity. In fact, we continually buy products from suppliers to accomplish three main goals:

1. Achieve our own margin, profitability, and growth objectives
2. Prove to you that we are an excellent customer and show you our capabilities
3. Broaden our partnership built on excellence and trust.

We love working with our suppliers, and our aim is to make them happy, increase their revenue / brand awareness, as well as total end consumer satisfaction.

We are convinced that in the future, you will have enough trust in us that you’ll want to give us some level of exclusivity, as a preferred Amazon FBA seller.

Should exclusivity be warranted in some way, it certainly doesn’t have to be for all your products. In fact, we seek to do a market test with you in the initial stages. For example, we could partner with each other on perhaps just 1, 2 or three products/listings right from the outset. Once you are comfortable in the relationship, the number of products we partner on can grow as appropriate.

We have many years of experience in international trading and have long been an online retailer of various physical products.

We are constantly buying from our suppliers and selling on top eCommerce platforms (e.g. Amazon). However, our priority is not only to sell your products, but to implement strategies to increase your market share.

When WE sell your products online, we seek to ensure that your brand is protected, as well as MAP prices are secured.
When we succeed, you succeed. It’s a Win-Win scenario for you, us, and the customer!

LXA.ch “FBA Select” is simply the term we use to describe our relationship whereby you, the brand owner/supplier chooses us to be your preferred Amazon FBA seller. We purchase your branded products directly from you and have them shipped to Amazon warehouses. In your listings, Amazon Prime shoppers will always see the Amazon Prime button, which means that they can now buy your products from us and have them fulfilled by Amazon within 1-2 days. That’s Fulfillment by Amazon (FBA).

LXA.ch “FBA Select Services” are offered at no charge. We perform these services because it serves both of us, supplier and reseller, to maximize sales and customer satisfaction of your products on Amazon.

Note: In order to perform these services free of charge, we do ask that our suppliers help us to take the steps necessary to protect their brand listings on Amazon.

If you really care about your brand, you should be taking such actions anyway:

• Register your brand with Amazon
• Implement a MAP Policy for companies who sell your products on Amazon
• Implement a Reseller Agreement for all buyers of your products to follow
• Authorize us to sell your products on Amazon.com (even if for select few products at first).