A lot of small suppliers vendors made tons of money on Amazon’s Vendor Central (also known as 1P or AVC) program. The 1P program is an invite-only platform that gives you the opportunity to make Amazon your brand’s full-time distributor. Amazon buys your inventory, stores it, and distributes it to their customers. The retail giant will take care of everything from pricing to shipping and handling returns. You just have to produce the products and you don’t have to worry about selling them.
Being an Amazon vendor guarantees consistent revenue. In addition, the ease of shopping and great customer service that Amazon provides can significantly increase your brand equity and reputation.
On March 2019, Amazon Vendors got the surprise of their life – the purchase orders (PO) from Amazon stopped. The retail giant explained that they are having technical issues. But, some suppliers receive a message that suggested that they should not expect future orders.
Brands who used the “direct fulfillment” (shipping the orders directly) noticed that their inventory was reset to zero. Many experts believe that Amazon is doing this as the first step to merging their two different selling platforms – the Seller Central and the PO-based Vendor Central. This rumor has been going on for a while and a significant number of vendors believe that their worst nightmare is turning into a reality.
If you’re one of the small suppliers who got kicked out of Amazon, don’t panic. It’s time to sit down and think about “what’s next” for your brand. It’s time to create a game plan to protect your brand if you ever get kicked out of Vendor Central.
To achieve great success even after you got pushed out of Amazon Vendor Central, your game plan must have the following action plans:
Register your brand in Amazon’s Brand Registry program.
Choose the right distribution strategy.
Preserve and control your retail prices.
Get to know your customers a little closely.
Protect your advertising and marketing efforts.
When you carry out these action plans, you’ll protect your brand reputation and sales revenue. You also get to preserve your brand equity on and off Amazon.
Strategy #1: Register your brand in the Brand Registry Program and Take Advantage of Special Amazon Seller Services
The Amazon Brand Registry (ABR) program enables brand owners to control their product listings and create content-rich product descriptions.
When you were a vendor, you just submit the content for your wholesale products and you don’t have full control of what Amazon’s going to use it.
ABR gives you full control of your branding content. It even allows you to manage and monitor the product listings created by third party sellers.
Registering your brand in ABR has many other benefits, including:
1. It allows you to add and manage branded products.
2. It helps you ensure that your product information is accurate and up to date. You can be sure that all the listings of your content can meet a certain standard.
3. It helps you eliminate counterfeit products. Once you upload your brand information and logo, Amazon would start scanning for suspected counterfeits and remove them.
4. ABR gives you access to powerful reports and search tools like:
Global search – This allows you to search for products and contents in various Amazon stores around the world.
Bulk ASIN search – This helps you search for ASINs in bulk to search for and report lifted content and pirated products.
Image search – This helps you find product listings that use your product and logos.
5. Being registered on ABR also allows you to join the Amazon Zero waitlist. Project Zero allows you to assign unique serial numbers to your products, so it’s easier for Amazon to identify counterfeits.
Registering your brand in Amazon’s Brand Registry also allows you to run “sponsor brand ads”. These ads are placed at the top part of the search engine results page (SERP).
Strategy #2: Create an Amazon Seller Account
Most people open a seller account first before they register their brand in ABR. This is a wrong strategy because when your brand is pushed out of the 1P program, Amazon may also close your vendor account. This means that you can no longer change the content you submitted previously.
Should Amazon decide to maintain content you have previously submitted to Vendor Central, that content will continue to be in the Amazon catalog. But, you can no longer change it. This is why you should register your brand in ABR first before creating a seller account.
You don’t have to use this account to sell anything. You can simply use this account to load content on all your brand listings in the Amazon catalog.
As a registered brand owner, you can create a brand store and build enhanced brand content (EBC).
You can also use your seller account to replace the existing brand store content that you have created through 1P. To do this, you have to file a ticket in the Seller Support asking to remove “retail contribution” from your listing and brand store so you can now easily load your own content without asking for Amazon’s permission. This can give you full control of your brand content and can save you a lot of time.
Strategy #3: Pick the Right Distribution Model
When you’re a vendor, Amazon is your main distributor. So, you do not have to worry about your product distribution.
But, after you get pushed out of the Vendor Central, you must start finding the right distribution model for your business.
You can use the following distribution strategies:
1. Encourage your brick-and-mortar retailers to sell your products online as Amazon 3rd party sellers.
Let’s say that you are a T-shirt supplier. Your brand got kicked out from Vendor Central and you want to make up for the lost revenues from Amazon purchase orders. Let’s just say that you are also supplying T-shirts to a few local retailers and boutiques. You can encourage these retailers to sell your products on Amazon as third-party resellers.
2. Choose one 3rd party seller to be your exclusive reseller.
Transitioning from B2B (business to business) to B2C (business to consumer) can be extremely challenging. So, if you want to continue being a B2B brand, it’s best to give exclusive product distribution rights to one third party seller.
3. Sell your branded products via Amazon Seller Central.
You can sell via the Amazon Seller Central as a third party seller of your own products. This distribution strategy requires you to shift to B2C model. This is challenging because there are a lot of things that you need to do, including:
Advertising campaign management
You’re going to need to hire experts in these fields if you want to build a successful online business.
Selling your own brand on Amazon comes with a lot of perks. You can run the high-conversion “sponsored brands” ads. You can also create rich content through EBC, create your own brand store, and protect your brand using Amazon Zero.
4. Be a third party Amazon seller of your own brand, but hire an agency to run your seller account.
The B2C distribution model is labor-extensive. It takes so much of your time. So, if you want to focus on your production operation, you can hire an agency to manage your seller account and take care of inventory management, SEO, advertising, and trend analysis.
Strategy #4: Protect Your Brand Integrity and Pricing Levels
When you’re a vendor, unauthorized seller is not your problem, but Amazon’s. But, now that you got pushed out of the 1P program, you have to do something about unauthorized sellers.
If you don’t have strong control over wholesale distribution, unauthorized sellers would inevitably get a huge sales share. And most of these resellers do not follow your suggested retail price. The MSRP or manufacturer suggested retail price policy is not strong enough to protect you.
Amazon will not help you remove unauthorized sellers. Also, most of these sellers know their legal rights. They know that they are protected by the ‘first sale doctrine’ which allows virtually anyone to resell the product.
But, there’s something you can do to protect your retail pricing levels and brand integrity. You can hire lawyers to develop a tight online reseller policy. This legal tool allows you to legally remove sellers that are not following the terms of the policy.
Once you have your online reseller policy, you must have a tight screening process for potential resellers to ensure that your products are sold in the right channels at the right price.
Strategy #5 – Hire Buy Box Experts
Buy Box is that area at the right side of the Amazon product page that contains the “add to cart” button.
But, here’s the thing, not all product pages have a buy box. It rotates amongst competitive sellers. Not one seller always has the buy box unless they’re the only person selling that item.
Amazon’s algorithm usually favors sellers with competitive prices, so you have to avoid overpricing your product. But, you have to know that the product with the lowest price does not always have the buy box. The algorithm also considers your feedback scores and the length of experience that you have as an Amazon seller.
If you want to be one step ahead of your competitors, it’s wise to hire a buy box expert.
Strategy #6 – Get to Know Your Customers A Little Bit More
It’s important to gather customer data so you’d know what your target market’s preferences are. Assign someone in your team to collect consumer data and study the reviews of your product as well as your competitor’s. This will help you understand your customer’s sentiments.
Getting pushed out of Amazon Vendor Central can be devastating and disappointing. But try to look at it on the bright side as well. This situation gives you the opportunity to evaluate your options, optimize your profits, and expedite your brand’s growth. Now if you have the right game plan in place, you can successfully turn this setback into a huge opportunity.