Amazon’s marketplace offers two primary sales channels: Seller Central (for third-party or 3P sellers) and Vendor Central (for first-party or 1P sellers). In the 3P model (Seller Central), businesses list products directly on Amazon’s site and sell them to consumers. They manage pricing, inventory, and fulfillment (or use FBA), while Amazon provides the platform and charges referral fees.
In contrast, the 1P model (Vendor Central) is invite-only: manufacturers/distributors sell wholesale to Amazon, and Amazon becomes the retailer. Amazon purchases items via purchase orders (POs) and then sells them under “Sold by Amazon”.
Amazon Seller Central (3P) Overview
Seller Central is Amazon’s open marketplace platform for third-party sellers. Anyone can sign up and sell (subject to Amazon’s policies). Sellers create an account (choosing either an Individual or Professional plan) and use Amazon’s Seller Dashboard to manage listings, inventory, orders and performance.
Seller accounts offer full control over product listings, pricing, and fulfillment strategy. Sellers can use Fulfillment by Amazon (FBA) where Amazon picks, packs, ships and handles returns or Fulfillment by Merchant (FBM), where the seller ships items themselves. They can also qualify for Seller Fulfilled Prime (SFP) to get the Prime badge while self-fulfilling orders, and use Multi-Channel Fulfillment (MCF) to have Amazon ship orders from other sales channels (e.g. a seller’s own website) using FBA inventory.
1. Seller Account Types
Amazon offers two Seller Central plans based on sales volume. Individual accounts (no monthly fee) are meant for sellers moving fewer than ~40 items per month , while Professional accounts (flat $39.99/month) suit higher-volume sellers.
Individual sellers pay $0.99 per item sold (in addition to referral fees), whereas Professional sellers pay no per-item fee.
| Account Type | Target Seller | Fees (USD) | Key Features |
|---|---|---|---|
| Individual (Basic) | Sellers <40 units/month | $0/month, $0.99 per sale | Basic listing tools; 20 category limit; no advertising access |
| Professional (Advanced) | Sellers ≥40 units/month | $39.99/month, no per-item fee | Expanded categories; Buy Box eligibility; bulk uploads; advertising; API & inventory feeds |
2. Seller Registration Process
Signing up for Seller Central is straightforward. Start on Amazon’s seller site by clicking Sign Up, then enter your business/personal details, tax ID, and payment and banking information. Amazon requires verification of identity and bank information. Once approved, select the Individual or Professional plan and you’re ready to list products.
3. Fees and Pricing (Seller Central)
Third-party sellers encounter several types of fees:
- Referral Fee: A percentage of each sale (typically 8–20% depending on category) that Amazon retains.
- Subscription Fee: Professional sellers pay a flat $39.99/month; Individual plans have no monthly fee but incur a $0.99 transaction fee per sale.
- FBA Fees: If using Fulfillment by Amazon (FBA), sellers pay fulfillment fees for picking, packing, and shipping, as well as storage fees. FBA costs are presented as simple, predictable charges.
Referral and FBA fees can significantly affect net margins. Unlike Vendor Central, there are no hidden marketing allowances or slotting fees; all fees are published on Amazon’s fee schedule.
4. Fulfillment Options
Third-party sellers on seller central have following fulfillment options.
Fulfillment by Amazon (FBA): Send inventory to Amazon’s fulfillment centers. Amazon handles picking, packing, shipping, and returns. FBA orders are Prime-eligible by default, boosting visibility.
Fulfilled by Merchant (FBM): Store and ship products directly to customers. Sellers set their own shipping rates and manage logistics. FBM items do not automatically receive a Prime badge.
- Seller Fulfilled Prime (SFP): You fulfill orders yourself (or through 3PL) but meet Amazon’s Prime delivery standards, earning the Prime badge on your listings. Qualification requirements are strict (fast shipping, buy shipping labels through Amazon’s system, etc.).
- Multi-Channel Fulfillment (MCF): You can use your Amazon FBA inventory to fulfill orders from other sales channels (e.g. your own website). Amazon ships those orders (often in 2–3 days) as part of its logistics network
5. Branding and Marketing (Seller Central)
Sellers maintain full branding control under Seller Central. With a registered brand, you can enroll in Amazon Brand Registry to create rich A+ Content (formerly EBC), customize your Amazon Storefront, and access advanced analytics. You control product titles, bullet points, images, and descriptions, which directly impact SEO and sales.
Key marketing tools include:
Amazon Advertising: Professional sellers can run Sponsored Products, Sponsored Brands, and Sponsored Display campaigns with keyword targeting. Individual plans cannot advertise.
Promotions: Coupons, Lightning Deals, Subscribe & Save (if eligible), and the Vine program for getting product reviews on new products.
Sellers also manage customer reviews, build brand trust and customer confidence. Seller Central gives sellers greater control over your brand and enables them greater control over their product prices.
6. Pros and Cons of Seller Central
Selling through Seller Central comes with clear advantages and trade-offs. It gives you control over pricing, fulfillment, and marketing, but also requires managing operational responsibilities and navigating marketplace competition. Evaluating these pros and cons helps determine if Seller Central fits your business strategy.
Pros:
These are the main benefits that make Seller Central appealing for third-party sellers:
- Full pricing control: set your own retail prices.
- Higher net margins compared to wholesale.
- Flexible fulfillment options: FBA, FBM, SFP, MCF.
- Access to Amazon marketing and branding tools: Brand Registry, A+/EBC, Stores, PPC.
- Fast payment cycles.
- Easier international expansion via unified accounts (sell on Amazon.com, .ca, .mx, EU under one Seller Central login).
Cons:
The following limitations and challenges should be considered before committing:
- Operational workload: inventory forecasting, listing optimization, advertising campaigns.
- Amazon fees apply: referral, subscription, fulfillment.
- Heavy marketplace competition requiring strong SEO and promotions.
- FBM sellers handle all logistics themselves.
- No automatic “Ships from and Sold by Amazon” trust badge; brand recognition depends on reviews and seller feedback ratings.
Amazon Vendor Central (1P) Overview
Vendor Central is Amazon’s invite-only portal for first-party wholesale selling. It is not publicly accessible; Amazon’s Vendor Recruitment team invites established brands and manufacturers it wants on its shelves.
Vendors act as wholesale suppliers: they receive Purchase Orders (POs) from Amazon and sell products in bulk. Once Amazon accepts a vendor’s offer, it sends POs through Vendor Central for restocking.
The vendor ships the ordered inventory to Amazon’s fulfillment centers and transfers title to Amazon. On the product pages, these items will carry “Ships from and Sold by Amazon.com” (or “Sold by Amazon”) labels.
In short, Amazon becomes the retailer: it owns the inventory, sets the retail price, and is responsible for all customer-facing operations.
1. Vendor Invitation and Requirements
Amazon carefully selects Vendor Central participants. Invitations are typically extended to larger, established businesses and recognizable brands. Key factors Amazon’s Vendor team considers include
- Existing Amazon sales history
- High-demand branded products
- Strong and stable sales velocity
- Good conversion rates, and reliable account health.
To get started, a company usually needs to contact Amazon or meet their outreach, then accept an invite and register the Vendor account. Once approved, you get access to the Vendor Central dashboard and can receive POs.
These criteria mean Vendor Central is effectively a selective wholesale channel. Small sellers typically begin with Seller Central and may later (if performance is good) receive an invitation to Vendor Central.
2. Ordering and Integration
Once a vendor is set up, Amazon issues Purchase Orders for products it wants to buy. Vendors must acknowledge each PO in Vendor Central and prepare the shipment. Shipments must comply with Amazon’s fulfillment requirements (e.g. labeling, carton specs), usually communicated via an Advance Shipment Notice (ASN).
Many vendors integrate Amazon’s system via EDI (Electronic Data Interchange) to automate order acknowledgments and ASNs. In short, Amazon tells you what to send and when, and you send the agreed bulk shipment to Amazon’s warehouses
3. Pricing, Fees and Terms
In Vendor Central, Amazon dictates many commercial terms. Vendors sell to Amazon at a negotiated wholesale price, after which Amazon controls the final retail price on its site.
This means vendors lose direct pricing control; if other retailers undercut the price, Amazon’s pricing algorithms may force price cuts, potentially violating a vendor’s MAP (Minimum Advertised Price) policy. Amazon may also request marketing allowances or slotting fees (often 4–10%) to promote the vendor’s products.
There is no referral fee on Vendor Central sales (unlike Seller Central), but Amazon can deduct charges for co-op promotions or stock issues (so-called chargebacks).
For example, Amazon reserves the right to impose chargebacks if packaging, labeling, or timing requirements are not met. Payment terms are typically Net 30, Net 60, or Net 90 days, meaning Amazon pays the vendor weeks or months after purchase.
Some vendors negotiate terms like 2% Net 30. These longer payment cycles can strain cash flow for smaller businesses, whereas Seller Central pays much faster (weekly or biweekly). Vendors should prepare for delayed payments and factor this into financial planning.
4. Fulfillment and Inventory
When Amazon buys from a vendor, it handles fulfillment. Vendors ship bulk pallets into Amazon’s distribution network, and Amazon stores inventory across its fulfillment centers. Amazon then picks, packs, and ships individual customer orders, with returns managed by Amazon’s customer service.
Unlike Seller Central, restocking on demand is not possible; vendors rely on Amazon’s purchase order cadence. Unexpected demand spikes can cause stockouts, and Amazon may let items go out of stock without proactive alerts, harming sales and search ranking. Vendors must maintain close communication and quickly fulfill POs.
5. Branding, Advertising and Promotions
Products appear under Amazon’s retail listing, benefiting from Amazon’s brand trust (“Ship and Sold By Amazon” label), which can increase consumer confidence. Amazon’s merchandising team often enriches product detail pages for 1P items using A+ Content and curated images.
Vendors can enroll products in programs like Amazon Vine and Subscribe & Save, improving conversion rate and recurring sales.
While vendors relinquish direct control over listing details, Amazon account managers can suggest marketing strategies. Vendors can also use Amazon Advertising (AMS) to run Sponsored Products or Sponsored Brands, with additional opportunities through Vine or certified releases.
6. Vendor Compliance and Penalties
Vendors must meet Amazon’s supply chain standards. Noncompliance can result in penalties such as chargebacks for late shipments or mis-picks. Vendors must adhere to strict EDI guidelines and sometimes accept contractual deductibles for promotional marketing, such as paying slotting allowances. Vendor Central can be lucrative but is demanding, often treated as a wholesale distribution agreement by large brands.
7. Vendor Payments and Support
Payments follow negotiated net terms (e.g., Net 60). Amazon is rigorous with invoice verification, and vendors may need to prove delivery before payment. Delays or withheld payments for co-op fees can create cash flow risks.
Customer inquiries and issues for 1P sales are handled by Amazon, a major advantage. However, vendor support experiences vary; smaller vendors report minimal proactive support unless they are top-tier brands. Large vendors may get dedicated account managers, while others navigate Vendor Central mostly through the self-service portal.
Vendor vs Seller Central: Key Differences
Choosing between Seller Central and Vendor Central depends on your business goals, desired control over pricing and branding, and willingness to manage operational responsibilities. Seller Central gives autonomy and direct consumer access, while Vendor Central offers wholesale convenience with Amazon handling fulfillment and sales.
| Feature | Seller Central (3P) | Vendor Central (1P) |
|---|---|---|
| Account Setup | Anyone can self-register and start selling. | Invite-only by Amazon; must be approved to use Vendor Central. |
| Sales Model | You sell directly to consumers on Amazon’s marketplace. | You sell wholesale to Amazon; Amazon sells to consumers. |
| Pricing Control | You set retail prices; can implement pricing strategies or MAP compliance. | Amazon sets retail prices after buying wholesale; vendor must accept wholesale pricing and allowances. |
| Fees | Referral fee (8–20% of sale); Professional $39.99/month; FBA fees if used. | No referral fees, but Amazon may charge marketing allowances, slotting fees, or chargebacks; vendor receives bulk payment on net terms. |
| Fulfillment | Choose FBA, FBM, SFP, or MCF; sellers can split strategies. | Amazon buys products, then fully handles fulfillment and shipping; vendors ship bulk to Amazon’s warehouses. |
| Inventory & Supply | Seller (or FBA) controls stock and reorder levels; subject to FBA storage limits. | Amazon controls inventory distribution; vendor ships to Amazon on PO schedule; stockouts occur if POs aren’t met. |
| Payment Terms | Disbursed every 7–14 days (minus Amazon fees). | Paid on Amazon’s terms (e.g., Net 30/60/90 days), often slower. |
| Brand & Marketing | Full control over listings, A+/EBC, Amazon Storefront; use Amazon Ads and promotions. | “Sold by Amazon” branding; limited control over listings; access to programs like Vine and Subscribe & Save. |
| Support | Dedicated Seller Support; manage product content and ads. | Amazon handles all customer service; vendor support is minimal for smaller brands. |
| International Sales | A single Seller account can list in multiple marketplaces (US, Canada, EU, etc.). | Typically limited to Amazon.com unless new vendor accounts are established. |
This comparison highlights that Seller Central (3P) offers autonomy and retail control, while Vendor Central (1P) provides wholesale convenience at the expense of flexibility. Hybrid selling is possible if Amazon permits.
Choosing the Right Platform
The best platform depends on your business goals, size, and resources. Each option offers different levels of control, operational responsibility, and growth potential.
1. Vendor Central
Vendor Central typically suits large, established brands or manufacturers, especially those invited by Amazon.
- Premium Programs: Invitation-only access unlocks exclusive Amazon programs and benefits.
- Hands-off Fulfillment: Amazon manages picking, packing, shipping, and customer service.
- Wholesale Focus: Vendors sell in bulk to Amazon, which then sets retail pricing.
- Operational Requirements: Works best for businesses that can reliably meet purchase orders and handle delayed payments.
- Brand Credibility: Products carry the “Sold by Amazon” branding, adding consumer trust.
Vendor Central is ideal for vendors who want to partner with Amazon and focus on wholesale, leveraging Amazon’s scale and support while giving up some control over pricing and branding.
Seller Central
Seller Central is generally preferred by smaller brands or entrepreneurs.
- Full Control: Manage listings, inventory, pricing, and advertising campaigns.
- Flexible Fulfillment: Options include FBA, FBM, SFP, or MCF, allowing strategic fulfillment decisions.
- Faster Cash Flow: Payments are disbursed every 7–14 days, improving liquidity.
- International Expansion: Single accounts can list across multiple marketplaces, such as the US, Canada, and EU.
- Brand Presence: Sellers retain control over product listings, A+/EBC content, and Amazon Storefront.
It is more accessible, requires more active management, but offers flexibility and higher margin potential. Most businesses are recommended to start with Seller Central.
3. Hybrid Strategy
Many brands use both platforms to diversify Amazon sales. Small to mid-sized sellers often prefer Seller Central for control and margins, while large brands may benefit from Vendor Central’s scalability and the “A” backing of Amazon. Consider your volume, margins, and desired level of control when choosing a strategy.
Frequently Asked Questions
Can I Switch From Vendor Central to Seller Central (or Vice Versa)?
Yes, but it’s not like flipping a switch. It’s a process, and the direction you’re heading makes a big difference.
Moving from Seller to Vendor Central is the smoother route. It starts with an invitation from Amazon, and if you accept, you’ll gradually wind down your 3P operations as Amazon starts sending you purchase orders.
Going the other way, from Vendor to Seller Central, is a whole different ballgame. This usually happens when a brand wants to reclaim control over pricing and branding. You’ll need to formally end your 1P relationship with your Vendor Manager and then get your Seller Central account up and running. The trickiest part? Managing the inventory handoff to make sure you don’t go out of stock during the transition.
Are There Hidden Costs With Vendor Central?
You bet. The Vendor Central fee structure isn’t nearly as transparent as the straightforward referral fees in Seller Central. You’re not paying a percentage per sale, but your profits get chipped away in other ways.
Keep an eye out for these common expenses:
- Chargebacks: These are penalties for all sorts of compliance slips, from incorrect labeling to late shipments. They can easily slice 2-8% off your gross sales.
- Co-op Fees: Think of these as mandatory marketing fees. Amazon often requires you to pay into their promotional programs as a cost of doing business.
- Payment Terms: Getting paid in 60 or 90 days instead of every two weeks hits your cash flow hard. In essence, you’re giving Amazon a sizable, interest-free loan.
These costs are typically baked into your vendor agreement, but they add up fast and can seriously shrink your margins if you’re not careful.
What’s the Real Difference Between FBA and Being a Vendor?
This is a huge point of confusion, so let’s clear it up. Both paths involve sending your products to an Amazon warehouse, but the ownership model is fundamentally different.
In Vendor Central, you sell your products in bulk to Amazon. Once they accept that shipment, it’s their inventory. They own it. They set the price, handle fulfillment, and manage customer service because they are the retailer of record.
When you use FBA (Fulfillment by Amazon) through Seller Central, you always own the inventory. You’re just paying Amazon a fee to act as your third-party logistics (3PL) partner. They store your products and handle the pick, pack, and ship process for you, but you remain in full control of the price and the product listing. It’s a service relationship, not a wholesale one.
