Back in March, wholesale orders from Amazon came to a sudden stop. The standstill lasted several days, and it was a wake-up call for vendors. To justify it, Amazon said it was trying to get rid of counterfeiters. But not everyone was convinced.
To help merchants cope with a potential vendor purge, we wrote a post titled From Vendor Central to Seller Central. In it, we talked about the fact that vendors need a fallback plan. And we urged everyone to start switching to Seller Central. Now it looks like that purge is imminent.
The Vendor Purge
According to Bloomberg, Amazon hired fewer vendor managers this season. It asked existing ones to make a case for keeping their clients. It renegotiated with far fewer vendors this spring. And it set a minimum threshold of $10 million in yearly sales. Why? A storm is brewing.
Amazon denies there’s going to be a supplier shakeup. And it says Amazon One Vendor doesn’t exist. But it needs to compete with the likes of Walmart in an increasingly inhospitable market. It’s only a matter of time before it gives into this urge to purge. When it does, small suppliers will be sidelined.
Let’s face it, it’s only logical. A purge means fewer vendor managers to pay, less inventory, fewer problem sellers, happier buyers, and more FBA fees contributing to its bottom line. Will it put an end to counterfeiting, though? Probably not.
Amazon Trends to Look Out For
Ecommercetimes claims the top 10 influencer channels on YouTube drive a fifth of all purchases on Amazon. That’s not likely to stop if a purge happens. In fact, as more vendors switch to Seller Central and learn to market their products themselves, they’ll probably invest more in social media ads.
Also, if vendors choose to go to eBay or focus on their own websites rather than switch to Seller Central, product variety will be affected. Over time, buyers will have fewer options and they may need to pay more.
But there are some positives here. If Amazon kicks vendors out and it stops selling their products, there’s going to be a more level playing field. Sellers won’t be competing with Amazon for the Buy Box anymore.
Tips for Ex-Vendors on Amazon
Unfortunately, as vendor managers stop safeguarding some brands, sellers could start to apply more aggressive selling tactics. As an ex-vendor, you will need to take extra measures to protect your sales. To minimize the disruption and keep sales steady, you should:
- Sign up to Brand Registry or transfer your listings with your existing credential.
- Use Brand Analytics to understand your customer base.
- Check customer demographics data for orders from your competition.
- Monitor your listings on Amazon and report unauthorized sellers.
- Read up on the first-sale doctrine and how foreign sellers could abuse it.
- Develop your reseller policy with the help of a specialized attorney.
- Outsource your day-to-day tasks to Amazon experts, if needed.
- Beat sellers at their own game with a real-time repricer like Sellery.
- If all else fails, give a seasoned seller exclusive rights to sell your product on Amazon.
Even with a top brand team and the best technology at your disposal, switching from Vendor Central to Seller Central takes time. It may not take 120 days, like Bloomberg says. But you’ll need at least a few weeks for Amazon to lift all the listing and storage limits for new sellers.
Hopefully, there won’t be any vendor purges before Prime Day 2019. And Amazon One Vendor is nothing but a rumor. But if you want a fallback plan, your seller account should be up and running before Q3. So, now’s the time to get the ball rolling.
Our Business Coaching team can help you sort out every aspect of selling on Amazon. They can help you with Brand Registry, real-time repricing, and everything in between. Our Account Monitoring can take over the tedious tasks for you. And we even have a dedicated team to help you switch to Seller Central. Get in touch and let’s get started.